Brooks Authority Preps Default Notice After Unauthorized ICE Sublease

The Brooks Development Authority is preparing to declare Preston Hollow Community Capital in default over an unauthorized sublease to federal immigration officials.

In October 2026, the Express-News reported that Immigration and Customs Enforcement sought to lease 75,000 square feet across two buildings at the WatersEdge office complex. The proposed arrangement called for a 15-year term with a total cost of $51 million. Dallas-based Preston Hollow Community Capital attempted to sublease its existing space to ICE. The transaction proceeded without the permission or notification of the Brooks Development Authority. Local officials state the move breaches the terms of their current agreement. Since identifying the violation, the authority has directed its legal counsel to issue a formal notice of default to the developer.

This dispute emerges as the city pauses construction on a separate federal facility. San Antonio Mayor Gina Ortiz Jones told Texas Public Radio that work on the proposed East Side ICE facility is on hold. The Department of Homeland Security is currently conducting an environmental review of that project. The pause provides a window for local leaders to reassess federal presence in the city.

City leaders are also reviewing local law enforcement protocols. Mayor Ortiz Jones and three City Council members plan to examine San Antonio Police Department cooperation with ICE after the 2026 midterms. Democrats gained control of the Texas House and major statewide executive offices in those elections. Two San Antonio-area lawmakers filed legislation on Monday to end state-mandated cooperation between local agencies and ICE under 287(g) agreements.

State Sen. Jose Menéndez, who filed one of the bills, said the current session offers a chance to implement meaningful changes for the community. The mayor emphasized that police should focus on their core safety mission rather than taking on responsibilities for which they are not trained. She noted that these additional duties can make communities less safe when residents fear calling for help.

The next step for the Brooks project is the formal delivery of the legal notice to Preston Hollow. The authority expects the sublease to be contested until the developer cures the breach or the parties reach a new agreement. The $51 million in potential rental income remains tied to the resolution of this contractual dispute.