Vishal and I were driving into Houston and staying at a friends house when I called to see if he wanted to meet us somewhere for dinner and drinks and he said yes, meet me at the old Town and Country Mall at I-10 and Beltway 8 at Yardhouse, its a cool new development that was recently built..so we did. When we arrived and looking for Yardhouse we drove around and I was amazed at what they had done. Being from Houston, I only remembered the mall and what a transformation!!! My friend said the only thing they did not demolish was the parking garages. So the next morning I told Dr. Forgey we should check out this place we met my friend last night, it's a vibrant new redevelopment of a Regional Mall. Low and behold, this was on the itinerary and I just didn't know it...great minds think alike!!
City Centre was developed by Midway Companies whose roots were actually from Dallas...does Midway sound familiar? Well of course it does...Midway Road just off of 635 in Dallas. They developed industrial office parks just off Midway and had offices there back in 1968. In 1983 they opened a Houston office and in 1994 they relocated their corporate office to Houston under the leadership of Brad Freels, Chairman and CEO. Anyway, City Centre is a 1.8 million square foot mixed use project on 38 acres of which they developed 28 acres. There is approximately 425,000 sf of retail, 450,000 sf of offices, 224,000 sf hotel with 22 condos, and 525,000 sf of residential. All in it is a $500 million dollar re-development project with Michigan State Teachers providing 60% of the institutional equity. Here is a little tidbit that makes this deal happen...they were able to quietly purchase the old mall (off market) for $30 million in 2005 with only 6 months to close the deal. Why is this significant? Had it gone to market it probably would have brought $100 million or more and equally as important, if you were to figure it costs between $10,000 - $12,000 dollars per parking space to construct parking garages... at $10,000 per space with 3,500 spaces already constructed on site that's $35 million!!! That math works all day long. They created a LP that bought all the property and created sever other LP's to sell of thus creating several parcels independent of one another yet all controlled by Midway Companies to form City Centre five years later.
Brandon Houston, a Texas A&M graduate and a Masters from Rice University (needless to say, he's a pretty smart guy) and the Director of Development for Midway met with us and gave us the VIP tour. Brandon was great, he shared a plethora of information and was just fun to be around. The development is in a TIRF's district and while they used there own capital initially, one of the lessons learned was to use the TIRF's money upfront. He also stated they took no incentives from the City of Houston and they did not dedicate any of the streets to the City so the could close them down whenever they wanted to when the were heaving concerts of other forms of community entertainment. Below are some of the pictures I took for you to see this cool re-development..Enjoy:
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