Metro looks to real estate development for revenue

Image credit: Pixabay

In today’s Chronicle, Nancy Sarnoff tells us that Metro is jumping in to real estate development:

Metro put the word out last week that it’s looking for a developer to collaborate with on a transit-oriented development, which is a project mixing residential and commercial uses near a rail stop.

Metro wants this project built within the next two years at the Texas Medical Center Transit Center on nearly five acres at Fannin and Pressler.

The property would be built atop the existing transit center, which was constructed to accommodate vertical development.

Metro hopes to establish a short list of four to six developers capable of building this sort of project.

It says the development would increase ridership on the transit system, generate economic development through new jobs and support the growth of the Medical Center.

As part owner, it could also provide Metro with a profit.

The Houston Business Journal covered much of this back in January, in greater detail, and in an accompanying article in the Journal we also learned that Metro has the right of eminent domain around light rail stations:

Under a new Metro real estate initiative, owners of land within a 1,500-foot radius of a light rail station could stand a higher chance of having their property condemned by the transit agency.

[snip]

Metro’s eminent domain reach covers a span of five football fields in any direction. The surroundings of a single urban rail station can encompass several square blocks occupied by scores of buildings.

The potential for more property condemnations not directly related to rail has some local property rights groups concerned.

While Metro prepares to implement the plan with an inaugural project in the Texas Medical Center, opponents of the new policy argue that properties blocks away from the rail stations could be potential targets of speculative real estate deals transacted by transit officials.

Sarnoff doesn’t mention the possibility of eminent domain in her column. She does briefly mention Todd Mason, the real estate developer in charge of the project for Metro. Again, we have to go back to the Houston Business Journal to learn more about Mason:

Todd Mason’s initial mission as a recently appointed Metro vice president is to identify private developers who might be interested in constructing a high-rise project for possible retail, restaurant, condo or medical office tenants over the TMC Transit Center at Fannin and Pressler. The Texas Medical Center site doubles as a combination light rail stop and terminal where buses pick up and drop off passengers.

[snip]

Metro gained full-time access to Mason’s services by signing a five-year, $2 million contract with McDade Smith Gould Johnston Mason + Co.

The real estate firm’s name principal and chief financial officer occupies an office in Metro’s new downtown headquarters, where his duties include promoting commercial development on or near Metro properties and handling all of Metro’s real estate holdings.

[snip]

Commercial developer David Wolff came up with the idea of retaining private real estate professionals following his appointment as Metro board chairman in 2004.

Wolff and Metro President Frank Wilson interviewed several firms before hiring McDade Smith, Mason says.

[snip]

For $400,000 a year, Metro gets Mason on a full-time basis, as well as McDade Smith broker Jeff Lindenberger and an administrative person.

[snip]

A big share of the brokerage team’s earnings could come in divesting Metro properties, an activity that has received little attention in the past.

Metro owns some 1,500 sites around Houston, and it’s Mason’s job to help determine the worth of each one.

We had a hint about Metro unloading some real estate when the Alief Park and Ride was recently closed:

In addition to the money METRO will earn on the sale of the property itself, the closure will provide an estimated savings of more than $100,000 in annual operating costs.

And Mason mentions a Park and Ride in the Houston Business Journal story:

Switching to his sales agent hat, Mason says one site that may soon be declared surplus Metro property could attract quite a bit of attention from buyers. The 12-acre tract occupied by an underutilized park-and-ride is located next to a Wal-Mart north of Interstate 10 and west of the Beltway.

It would be especially interesting to learn if any of the properties Metro eventually puts up for sale were obtained through eminent domain, since Metro has been able to exercise that power for almost thirty years.

It sure seems as though Metro is not quite focused on its primary mission of providing transportation for Houston-area citizens, except as it relates to light rail. While Metro has been busy cutting bus routes, 86ing the downtown trolleys, closing Park and Rides, and ending security guard services at existing Park and Rides, a Metro real estate development office is in high gear. According to Sarnoff’s column, Metro expects these developments to provide revenue through leases and increased light rail ridership, and Metro needs that revenue to help pay its share of building the next two light rail lines.

This highlights that Metro’s center of attention is downtown. Wouldn’t it be nice to release Metro from outside-the-loop transit responsibilities, thereby releasing outside-the-loop taxpayers from having to pay for transit services that are increasingly unusable or even unavailable?

(Old) Forum Comments (2)

About Anne Linehan 2323 Articles
Anne Linehan is a co-founder of blogHOUSTON.