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The Stables

Will the Ashby highrise ever get built?

Who knows?

Sue me!

Penelope Loughhead’s house in the leafy neighborhood near Rice University abuts the land where, nearly a decade ago, a proposed high-rise sparked a land-use battle that resonated citywide and throughout the local development community.

This week marks two years since a judge ruled the proposed Ashby tower could go forward after a monthlong trial and jury verdict that agreed with residents that the 21-story tower would be a nuisance to surrounding property owners. The judge agreed to some of the roughly $1 million in damages jurors assessed against Houston-based Buckhead Investment Partners but denied residents the permanent injunction they were seeking to halt the project.

Yet the 1.6-acre lot sits empty as both sides await a decision on their appeals.

“It feels like we’re in limbo,” Loughhead said. “We’re in the dark. We know they are allowed to build, but no ground has been broken.”

The developers declined to comment, citing the ongoing appeals process. They did not answer questions about the status of the project, although they previously told the Chronicle that the construction was moving along despite the appeal.

[…]

Attorneys for both sides made their cases during an appellate hearing in September. A decision could come down any day, attorneys say.

In documents filed with the 14th Court of Appeals, the attorney for the developers, Raymond Viada, argued against the damages that jurors awarded 20 residents who live near the Ashby project’s 1717 Bissonnet address. He wrote, in part, that the developers altered plans for the project after the jury’s decision and before the injunction hearing. Therefore, the project discussed in trial, which was ruled by the jury to be a nuisance, was no longer what his clients were proposing.

Viada wrote that the developers, who have already invested $14 million in the project, changed plans to reduce lighting from the garage, place planters on the amenity deck to add privacy and reconstruct its foundation to limit the impact of damage to surrounding homes. He wrote that the developers expect to net $72 million in profit if the project is not stopped.

See here for all the Ashby blogging you can stand. As I said the last time, it really boggles the mind to realize how long some lots in extremely desirable parts of town have been empty. The old Robinson Warehouse, Allen House, The Stables, and Ashby sites have been fallow for going on ten years. They remained unbuilt through a multi-year real estate boom that was especially hungry for inside-the-Loop properties. Now, in the midst of a low-oil-price downturn, it’s hard to imagine any of them changing status any time soon, and that’s without taking the Ashby lawsuit appeals process into account. I keep thinking that one of these days something will change, but all I’ve gotten for my trouble is that much older.

Want to buy a big piece of land near the Medical Center?

Here’s your chance.

A single tract of land large enough to hold multiple office towers, high-rise residential buildings and a hotel doesn’t often come available inside Loop 610. One near the Texas Medical Center is even more uncommon.

After 45 years, Shell Oil Co. is selling 21 acres it owns at the southwest corner of Old Spanish Trail and Greenbriar, just south of the Medical Center’s main campus and directly west of the Woman’s Hospital of Texas.

The site houses a midrise office building, a parking garage and several warehouse structures.

As far as most people in real estate development would be concerned, they’re all teardowns. The value of the property is in the land, which is likely worth tens of millions of dollars.

The land is next to a giant parking lot owned by the Medical Center that is the proposed location of a medical research project to be called the TMC3 Innovation Campus.

The facility would bring together several Medical Center institutions and for-profit commercial components, such as hotels, shops and restaurants. It would have a large plaza shaped like a double helix, a nod to intertwining strands of DNA.

The Shell property is along the light-rail line and represents the largest contiguous redevelopment site in the Texas Medical Center area, according to Cushman & Wakefield, which has the listing.

I used to work out that way, and I can tell you, the stretch of Old Spanish Trail from 288 to where it meets up with Main Street, just to the west of this property, used to be mostly run down and vacant lots but is now packed with new Medical Center complexes and residences. The “giant parking lot owned by the Medical Center” referenced is in front of the Smithlands light rail station, which is two blocks from the main entrance to the for-sale tract. That lot is always full – there was a dedicated traffic light put in for it on OST between Greenbriar and Stadium – so I have no idea what will happen when it gets developed as well. I would also note that the large tract of land at Main and Greenbriar where The Stables once was is still a vacant lot after just shy of a decade has passed. In other words, just because a large tract of land is coming on the market, doesn’t mean something will get built on it any time soon. Anyway, if you have a few million bucks lying around, this might be a nice piece of land to pick up.

Your one-minute real estate update

I just have one mostly tangential thing to say about this.

Houston will see a modest and steady growth in retail activity in 2013, according to Ed Wulfe’s annual retail forecast.

And the following year should be much better, said Wulfe, who is chairman and CEO of Wulfe & Co., a retail development, brokerage and property management firm.

The amount of new shopping center space to be built and opened in 2013 will be slightly greater than this year’s, while 2014 should be “very strong based on what’s underway,” Wulfe said.

I note that story mostly because it seems like as good an excuse as any to wonder once again about the status of all those long-dormant projects whose empty lots serve as a daily reminder of their lack of activity. I speak of course of the Stables and the Robinson Warehouse, now celebrating its sixth anniversary of vacantness. At last report the Sonoma site was being redeveloped; I can’t personally confirm this, as I generally avoid the area. Regent Square was supposed to have commenced construction in October, but I haven’t seen anything on the Allen Parkway part of the property. And one property that I generally forget about but was in the news recently, the old Astroworld site, also continues to lay fallow. I know this story is about retail development, and most of the sites I’m talking about were intended to be residential or mixed-use, but I feel like the Houston real estate market won’t truly be healthy again until something is happening with all of them.

Apartment boom coming

I have many things to say about this.

High occupancies and rising rents for apartments are driving a new wave of development in Houston’s high-end urban neighborhoods.

More than 3,500 units in a dozen complexes are under construction primarily inside the 610 Loop and around the Galleria. Nearly 8,700 more are proposed, according to Houston-based Apartment Data Services. Most, if not all, are being planned with top-notch finishes and high-dollar rents.

The flurry of activity is meaningful after a period where construction was virtually nonexistent. Amid the nation’s economic crisis, developers couldn’t get loans to start new construction and the appetite for apartments soured as renters moved in with relatives or doubled up in units.

But with the local job market beginning to recover, demand has been ramping back up, and the numbers of available units are dwindling. Few are concerned about a glut.

“If we ever needed construction, we need it now and need it soon,” said Bruce McClenny, president of Apartment Data Services.

Most of the units won’t be ready until late 2012 at the earliest.

The print edition of this story, which ran on Sunday, included a completely inaccurate map that among other things confused Weslayan with Shepherd and Richmond with both Bissonnet and Allen Parkway. I eventually gave up trying to make sense of it.

Among the projects listed were several of the longstanding vacant lots that I’ve noted from time to time. One that is actually under construction is the Ashton Rice Village, formerly the hippie bohemian attorney Sonoma development. Two others that are listed as “proposed” are Regent Square, home of the former Allen House apartments, which claimed last year that it would break ground in 2012, and the infamous Ashby Highrise, which may have lawsuit issues of its own to deal with. Not included: The site that used to house The Stables restaurant, which was torn down nearly five years ago. I have absolutely no idea what is going on with that site and when if ever something will be built there. At the time, one of the buyers said “We’ve acquired a crucial one-acre parcel in the Med Center area, which is hard to do”. You’d think by now someone would want to do something with it.

About two thirds of the 37 properties shown on the crappy map are in the rectangle bounded by the West Loop, I-10, the Southwest Freeway, and I-45. In other words, basically Montrose, Rice U/Med Center, Upper Kirby, West U, and River Oaks. If all of these projects get built, and all of the apartments get leased (I know, not going to happen) you’re talking 20 to 25 thousand more people in the area. As these are mostly high-end places, you have to wonder what effect this will have on the demographics and the politics; most of this territory is in the court-drawn HD134, and in the new City Council District C. Greg often talks about the re-honkification of the Heights. This isn’t the Heights, and this area was pretty Anglo to begin with, but there’s likely to be an effect nonetheless.

(Alta Heights, at 141 Heights Blvd, is the closest project listed to the Heights proper. This is basically across the street from the Ainbinder Wal-Mart site, and used to be a low-income apartment complex.)

With all this dense construction taking place in an already crowded part of town, you would hope that the need for more and better transit would be seen as increasingly urgent. Some of these projects will be close to the Universities rail line when it finally gets built, but a lot more than that is going to be needed to handle this and to allow for future projects like them. I’ll say again how nice it would be if the county, instead of spending gazillions of dollars on a road to nowhere to accommodate people that might live there 20 years from now, spent a few dollars helping to improve mobility where people are right now.

What if they built it someplace else?

For better or worse, the argument against the Washington Heights Wal-Mart mostly boils down to the fact that it’s an inappropriate location for a suburban-style big-box store. There are also concerns about traffic, and about the nature of Wal-Mart, both in terms of its business practices and its 24/7 operations, all of which have helped generate the pushback from residents in the area. The argument for Wal-Mart, beyond the basic belief that developers should be mostly free to develop what they want where they want, is that the city and the immediate area would benefit economically from its presence, as a provider of jobs and of affordable merchandise. The vacant lot sitting there now isn’t doing anyone any good, and there are people nearby who would like to shop and work there. There are nuances and variations and whatnot to each argument, but that’s more or less what they come down to.

If you agree that these are the main points, then you might observe that the Yale/Koehler property isn’t the only vacant lot in this part of town. What if Ainbinder or some other developer had picked a different location for a Wal-Mart? I got to wondering about that. Here’s the result of that little thought experiment:

Empty lot #1: Sonoma/Bolsover

Of the places I have in mind, this is the hardest to imagine being proposed as a Wal-Mart site, never mind one actually being built there. None of the streets that surround it are capable of handling the kind of traffic a Wal-Mart generates. There are many large retailers nearby – high-end grocers Rice Epicurean at Holcombe and Buffalo Speedway, Kroger Signature and HEB on Buffalo Speedway between Bissonnet and Westpark; CVS stores on Kirby in the Rice Village and at 59, and on Greenbriar at Holcombe. The immediate area is relatively wealthy, so both the customer base and the pool of potential employees is smaller. They would likely be at least as hostile to the idea of a Wal-Mart as they were to the Sonoma project and to the Ashby highrise. Other than it being a vacant lot, I can’t think of a good reason why a Wal-Mart would ever be proposed there.

Empty lot #2: The Stables

Conversely, this seems like the best fit. With access from Main and Greenbriar, traffic would be much less of an issue. Lots of apartments nearby, in the mid- and lower-income ranges, so there should be a solid customer and employee base. Extra points for being close to the light rail line, making it easier for employees to get there via transit. It’s mostly surrounded by Medical Center structures (more potential customers), with the only adjoining neighborhood being north of Main Street, so there would likely be little political pushback. There are similar retailers nearby – the Fiesta at Old Spanish Trail and Kirby, the CVS at Main and Kirby, and the Target at Main just west of Kirby are all within walking distance – but Wal-Mart didn’t get where it is by shrinking from a little competition. Whatever traffic issues there are would annoy me – I’m mostly thinking of people turning left on Greenbriar as they pass Main heading south – but beyond that I can’t think of a strong reason against it. This location just makes sense.

Empty lot #3: Allen House/Regent Square

Possibly the largest lot on my list, though it’s split by West Dallas, so that would present some challenges. Mostly good access from Dallas and Dunlavy, plus eastbound on Allen Parkway; entering from or exiting to the west on Allen Parkway would almost certainly require adding a traffic light, which is of course an abomination. There’s some nearby retail – a Kroger Signature at Gray and Woodhead, the future Whole Foods at Dallas and Waugh, just across the street from a CVS – but not that much. There’s a fair amount of low-income housing in the immediate area, and I’d bet The Center would be interested in possible employment opportunities for the people they serve. On the other hand, this location is also right next door to River Oaks, and they might not be too hot to have a Wal-Mart right there.

Empty lot #4: Robinson Warehouse

The only lot among the four that wasn’t originally intended to be some kind of high rise/mixed use development. About a half mile away from Empty Lot #3, so all of the same things apply to it, though it’s farther from River Oaks and closer to many apartments and lower income housing east of Montrose/Studemont. Easier access, from Dallas, Montrose, and the existing intersection/traffic light at Montrose and Allen Parkway, but possibly the largest impact on traffic, as both Montrose and Dallas get mighty busy at rush hour.

So there you have it. Obviously, none of these sites were bought (and none of the then-existing structures demolished) with the idea of putting up a big-box store. But with all of them being fallow for three years or more, possibly much more as things stand, who knows what might happen. The question is, whatever your opinion may be of the Washington Heights Wal-Mart proposal or the now-approved 380 agreement, what would your reaction be if that same project were to be suddenly relocated to one of these places? Discuss in the comments.

Astroworld empty lot update

Last week, we got word that the old Astroworld site, which has been empty since the last of the old rides were auctioned off in January of 2006, has a new owner – it had previously changed hands back in 2007 – and the Chron’s Nancy Sarnoff spoke to the new owners about their plans for the site.

It’s Mallick’s first major investment in Houston. The boutique real estate firm developed the Horseshoe Bay Resort Marriott in the Hill Country and has been involved in public/private inner-city redevelopments in the Dallas/Fort Worth metroplex.

“We feel like Houston is probably one of the stronger economies in Texas right now,” Mallick said.

The calls he’s received since buying the property are proof that others agree.

It leaves open the chance that something could happen to the property sooner rather than later.

“Given the tidal wave of phone calls I’ve received since we purchased it, I really don’t know at this point,” Mallick said. “There’s a huge amount of interest in the entire tract and portions of the tract.”

Before anyone gets too excited about that, here are a couple of points of comparison. The Robinson Warehouse site has been fallow since January of 2007. Unlike the Astroworld land, its owner (at the time, at least – I have no idea if it’s the same folks or not) had a specific plan for the land, and seemed to be raring to go on it. It hasn’t happened, that’s all I know. Also at that time, the old Stables Restaurant was torn down, with the land underneath it being acquired by a group that now owned a “crucial one-acre parcel in the Med Center area”. They didn’t have any specific project in mind, as far as I knew, however, and as with the Robinson Warehouse site, it’s still dormant today. Point being, don’t be surprised if a couple of years from now you read another story about another sale of the Astroworld site to another real estate group, with nothing else to indicate that something will finally be built there.

At long last, the Ashby Highrise Lawsuit

The Ashby Highrise developers have filed suit against the city.

The developers of the Ashby high-rise sued the city of Houston today seeking more than $40 million in compensation after repeated denials of their permit application.

“The city must learn that it cannot misapply the law to please a select few or to achieve de factor zoning regulations that our community has consistently rejected,” said Kevin Kirton, the chief executive of Buckhead Investment Partners Inc., the company that sought to build the 23-story tower at 1717 Bissonnet near Rice University.

I presume “de factor” is a typo in the statement they sent out about this, but as I am not on their press release distribution list, I cannot confirm that. I will simply note that both the neighborhood and the developers have threatened to sue at one time or another, and it actually feels a bit like relief that one of them finally went ahead and did it. As you know, I do think the original project, with the mixed-use component, is a better overall idea than what was eventually approved, but it remains the case that this is the wrong location for that project. We’ll see what a judge and/or jury makes of it.

On a side note, think about all the grand projects that were going to happen in recent years, for which things were torn down, and whose sites now lie fallow for who knows how much longer thanks to the crappy economic and financial environment. I’m talking about sites like the Robinson Warehouse, Allen House, The Stables, and of course Sonoma. Is is just me, or is anyone else amazed that Morgan and Kirton are so secure in their financing position that they keep bulling ahead like this? You have to wonder what their secret is.