Metro's trying to emulate Dallas with new development
Nancy Sarnoff has more details on Metro's foray into real estate development:
The city's transit authority has selected Houston-based Transwestern Commercial Services to build the project, which could include condominiums, a hotel, office and retail space in the Texas Medical Center.
The $105 million development will be built above the transit center at Fannin and Pressler. Transwestern will pay Metro $1 million a year for 99 years for the right to build on its property.
This will mark the first time Metro has partnered with a private developer on a real estate project of this scale.
Since the Main Street rail line began running in early 2004, no major developments have been built along the 7.5-mile corridor.
[snip]
The development plan calls for a 175-room hotel, 30 condominiums, 35,000 square feet of shops 168,000 square feet of medical office space and a 15,000-square-foot wellness center. Architecture firm Kirksey designed the plan.
Transwestern and Metro will spend the next year looking for a hotel operator and tenants to fill the space.
Chip Clarke, president of Transwestern's southern region, said the project details are "fluid" and that its ultimate uses will be driven by the market. "We believe a need exists for all those elements," Clarke said. "But we could decide there's a smaller demand for medical offices and a larger demand for more rooms in the hotel, potentially."
Construction, which could take three years to complete, is expected to begin in the second half of 2006.
Rail and bus service won't be interrupted by the construction, according to Metro spokesman Ken Connaughton.
And then there's this:
Houstonians have been hoping to see a development similar to Dallas' Mockingbird Station, where shops, restaurants and residential units are clustered around a rail stop, said Richard Zigler, director of research for O'Connor & Associates.
"I know more people would like to see more projects like that in Houston," he said.
Metro hopes the project will increase ridership, create a neighborhood-friendly sense of place and generate revenue from its real estate assets.
Yup, Metro can't generate revenue from transit, so it is looking for revenue in other areas.
Now, what about the assertion that Houstonians have been dying for a development similar to Dallas' Mockingbird Station -- does anyone know someone who's been saying he or she just can't wait until Metro builds a Mockingbird-like Station here in Houston?
Two more things to keep in mind: we have a glut of hotel rooms in Houston, thanks to the city-owned Hilton Americas, and private developers are cautious right now about building downtown condominiums, due to the current weakness in the downtown residential market.
Will any of that give Metro pause? Of course not.
UPDATE: Tom Kirkendall weighs in. He's skeptical as well:
We already know that Metro does not perform particularly well at that which it is chartered to do. In view of that, it's not a good idea for Metro to be getting into the notoriously speculative real estate development business, where it can lose even more money. Indeed, our local government already has a dubious record of boondoggles in that area. Finally, given Metro's governmental subsidy for this project, how on earth are private developers -- who risk their investment based on market conditions -- supposed to compete with such projects when they must rely on higher-cost private financing?
Posted by Anne Linehan @ 10/21/05 07:25 AM | Print |
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