TRYING TO PRESERVE PRESERVE LAND A year and a half after Hurricane Ike, what’s going on with Marquette Investments’ “The Preserve at West Beach” development plan for a huge chunk of Galveston’s West End? Here’s an update on a piece of it: “Last year, the environmental group Artist Boat applied for $11 million in federal Hazard Mitigation Grant Program money to buy 343 acres of bay-front land from developer Marquette Land Investments. Gov. Rick Perry rejected the application, even though island leaders and environmentalists flooded his office with e-mails, letters and faxes urging him to save one of the island’s most ecologically diverse tracts. . . . Now, Artist Boat and the city of Galveston are working together to secure a $3 million Coastal and Estuarine Land Conservation Program grant, administered by the National Oceanic and Atmospheric Association. The grant application was submitted Thursday. . . . [Artist Boat Executive Director Karla]Klay said the National Oceanic and Atmospheric Association will announce the winners of the grant within six to nine months. Darren Sloniger and his partners at Marquette agreed to provide $3 million in matching land value if Klay and the city get the grant. If that happens, the city would hold the title to one-third of the 343-acre site, which sits east of 11 Mile Road and north of Settegast Road. Marquette intended to turn the site into a 35-acre marina and residential subdivision. The property is part of a 1,058-acre development that will include a 15-story resort hotel, 4,000 condominiums and houses and an 18-hole golf course.” [Galveston County Daily News]
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Buying and Selling
How cheaply did the Ponderosa Land Development Co. pick up the 1.3 acres of land under Otto’s Bar B Que on Memorial Dr.?
“I won’t be able to ride off into the sunset with what I’m getting,†Otto’s co-owner June Sofka tells Jennifer Dawson of the Houston Business Journal. And that’s our only clue. Well, that and the fact that the shopping-center developers still had enough money left over to buy the property next door.
A new 2-story building on the 1.8-acre site between Asbury and Reinicke, on the southern border of Rice Military, is being designed by Kirksey.
The portion with Memorial frontage that will also be torn down to make way for the new project is owned by two sisters, one of whom is Wanda Greb. Their property contains Bibas Greek Pizza, M-T Nails, Memorial Barber Shop, Rich Cleaners and the hamburger restaurant segment of Otto’s, which is leased by the Sofkas.
Ponderosa intends to scrape the entire site and develop a 22,000-square-foot center with retail, restaurant and possibly some boutique office space. The project is expected to cost $6 million to $8 million, not including the land cost.
But wait, maybe not all of those businesses are disappearing from that location!
From the Twitter feed of KHOU reporter Alex Sanz, Swamplot hears news that Houston’s city council has postponed a vote on a proposal to sell the former Compaq Center at 3700 Southwest Fwy. in Greenway Plaza to Lakewood Church, for an-appraised-but way-below-assessed-value price of $7.5 million. As Swamplot explained yesterday, the church has more than 20 years left on a prepaid lease for the property and an option to extend the lease for an additional 30 years after that for a little more than $22 million — both of which significantly affect the present value of the property to the city.
Is the postponement of the sale a setback for Lakewood? Why should it be!? Followers of church pastor Joel Osteen, who’s now written 3 books filled with real-estate investment advice, know that he advocates patience — especially in complicated sale or purchase situations. Why wouldn’t he want councilmembers to feel entirely comfortable with the decision they come to?
Here’s how Osteen explains it in a relevant passage from his latest book, It’s Your Time:
A reader writes in to share the exciting news that one of those Northgate Custom Homes townhouses on Heights Blvd. that’s snuggled up next to the train tracks and just behind the recycling center on Center St. is now listed as “option pending” on MLS. Readers chose the complex as the city’s Best Vacancy in the Swamplot Awards for Houston Real Estate just a few months ago. Is someone buying right next to the tracks?
Well, not exactly. 114 Heights Blvd. Unit B, priced at $309,000, is the one that’s now listed as option pending. It’s shielded from those noisy trains by the full 20-or-so-ft. width of the adjacent townhome, Unit A. And here’s the featured view from one of its balconies:
COMMENT OF THE DAY: ISLANDS OF VALUE “I have come to believe that what is nearby means nothing at all to a lot of people. The Heights just east of Shepherd was, just a few years ago, mostly shotgun shacks and run down rentals. That stopped nobody from building half million dollar plus homes. Now- that doesn’t mean this place isn’t overpriced – a comp is a comp. I’m just saying that there are apparently many people who love being the castle surrounded by the serfs.” [finness, commenting on Swamplot Price Adjuster: Brookesmith in the 200s]
A representative of H-E-B confirms to the River Oaks Examiner‘s Mike Reed that the grocery company is buying the 7.68-acre site on West Alabama in Montrose — across Dunlavy from Fiesta — where the Wilshire Village Apartments once stood:
H-E-B spokeswoman Cyndy Garza-Roberts said she could not disclose a proposed purchase price.
“Right now, we are doing our due diligence,†she said. “We are in the very early stages.â€
One part of Swamplot’s due diligence, of course, might be figuring out who H-E-B is actually buying the property from. Some sort of transaction related to the property appears to have already taken place. We’ll have more details on that later.
Update: A few details from the Chronicle.
- H-E-B confirms effort to buy Wilshire Village property [River Oaks Examiner]
- Wilshire Village coverage [Swamplot]
Photo of Wilshire Village Site from Dunlavy St., South of West Alabama: Carl Guderian [license]
The demolished Wilshire Village Apartments appear to have been rescued from threatened foreclosure. A source tells Swamplot that the $13 million the owners owed to Wedge Real Estate Finance has been paid off in full — within days of a scheduled trustee sale. Where’d all that money come from?
If this Wilshire Village rescued owner-in-distress situation sounds familiar to you, you aren’t alone. Jay Cohen, the longtime sole owner of the apartments that stood at the corner of West Alabama and Dunlavy until last summer, faced foreclosure on the property back in 2002, according to a Houston Business Journal article written at the time by Nancy Sarnoff. Details of what happened next have never been published, but within a few years the 7.68-acre property had a new ownership structure, and apartment developer and former director of real estate for Landry’s Restaurants Matthew Dilick was its general partner. (Jay Cohen is likely a limited partner.)
So . . . who’s Dilicking Dilick, now that his own rescue efforts have flopped? Does the Wilshire Village site have a new owner?
When last we looked in on the stalled Dynamo Stadium deal for East Downtown, Commissioner El Franco Lee was holding the ball. Today, the HBJ‘s Ford Gunter provides a few clues about the dealmaking behind the scenes:
Lee has steadfastly refused to comment on the issue, and did not respond to interview requests. Speaking in Lee’s place during several recent interviews, [Harris County Community Services Dept. Director David] Turkel has become more guarded, citing the delicate situation and his desire to avoid hampering a possible agreement. In a nutshell, though, Lee wants concessions from the city and the team that he has not yet received.
“Lee is not comfortable putting it on the agenda as is, because it will get voted down,†Turkel says.
For one, the county is looking at who will own the stadium after the lease runs out in about 30 years, and how that would affect a deal in which the city would buy out the county’s share. Precinct 2 Commissioner Sylvia Garcia wants Dynamo family ticket packs priced comparably to movie tickets, which has been more or less agreed upon.
What is Lee really after?
Two months ago, a group out of San Antonio bought up the $32 million and somewhat-tattered note owed by the owners of the Metropole Apartments at 3616 Richmond (between Edloe and Buffalo Speedway). But Lynd Residential Properties and McCombs Enterprises weren’t interested in collecting payments — they foreclosed on the property right away. And now they’re hoping to sell the 289-unit property — for more than $40 million. Globe St.‘s Amy Wolff Sorter explains politely how it came to this:
Metropole’s story begins in 2005, when Cambridge Development acquired a vacant office building with plans to convert it into living space. Cambridge Development finished its work in 2007, creating a luxury high-rise multifamily complex right around the time fundamentals began to weaken. Cambridge Development brought the asset to market in late winter 2008. Metropole was under contract several times but never made it out of escrow.
. . . and the new owners swooped in at the end of last year. They tell Sorter they’ve already brought the occupancy rate up from 75 percent to “the low 80s,” with rental rates of approximately $1.50 per sq. ft.
- 289-Unit Metropole Comes to Market [Globe St.]
Photo: Metropole
COMMENT OF THE DAY: CONFESSIONS OF A CURIOUS HOMESELLER “I used the baby monitor to listen to the showings of my house. Just hung out at the neighbors. Not because I thought our realtor needed monitoring but because I was just so, so curious about what folks would say about my house. No real surprises. But I was amazed how many people brought small children to the showing–they spent a lot of time telling their kids to leave our coasters alone.” [Merrie, commenting on Spying on the Homebuyers]
Leon’s Lounge owner Scarlett Yarborough “has made it clear to everyone involved that no major changes will be made” when she sells turns over operation of the 57-year-old Midtown bar on McGowen near Main St. to Under the Volcano owner Pete Mitchell, the Houston Press‘s Craig Hlavaty reports. But Hlavaty also writes that Mitchell will be shutting Leon’s down “at least for a few months while [he] overhauls and renovates the establishment.”
Photo: Michelle Calabretta [license]
COMMENT OF THE DAY: 77019 FIXER UPPERS “I have a property in the 77019 area. I am undecided on what to do with it. I expect the property value is in the land rather then house in this instance above. $525K sounds about the going rate in that area for the house above. For the land alone my house sits on I could easily take half a million for it. It raises real questions, since anything I did to the property would not add to its value, if that makes sense. Just recently for instance I noticed that Croix are building on a lot which previously had a fabulous little bungalow on, which was in excellent condition and well restored, sadly Croix demolished it because the value was in the land itself. Sadly also the seller looks to have let it go for less than the land was worth. The house value becomes confusing in the whole value thing. I’ve noticed that builders even the ‘build on your own lot’ people are reluctant to help, give any advice, or take on the work – they want the land, it’s as simple as that. Rather than give it to those people I will probably end up restoring the property and living in it, but whatever is spent on it, it will not add anything to the value of the property which is a sad thing.” [David, commenting on Redo, Rinse, Repeat: Brun Bungalow, Makeover Magnet]
MORE OF THE STORY OF THOSE DISAPPEARING OAK FOREST OAKS 
“My neighbor lived in what you would consider a ‘tear down.’ For several years she struggled with selling and moving or rebuilding on the lot. A big factor in the decision was finding a builder that would keep the integrity of the lot and not cut down the gem – a 100 year old tree that is 4′ in diameter. She thought that she found the builder that respected the tree and had the same vision while simultaneous[ly] she found her dream home over in Garden Oaks. . . . Shortly after the transition, a family bought the lot and are ready to build . . . I have 2 neighbors including myself that would take this tree. I have till Friday to find an association that would underwrite this project and be interested in saving this tree.” [Kat Alan Madison + Austin; previously on Swamplot] Photo: HAR
A Swamplot reader sends in photos from the construction site at the corner of Arlington and 10th St. in the Heights, where 7677 Homes has apparently been busy transforming a much-talked-about 1,048-sq.-ft. bungalow into a 3,128-sq.-ft. home for a new buyer. Reports our site snoop:
The back of the house came off several weeks ago, leaving between 600 – 700 SF of the original structure.
Now the forms for the new piers are in.
“Welcome to the ideal property for train lovers, its located near a semi-active train tract,” begins the listing for this 5-bedroom, 4,164-sq.-ft. home backing up to the tracks on Community Dr. in College Court, the far western edge of West U. Writes the reader who sent it in:
I give them points for having the guts to address the issue head on (may be limiting the pool of buyers by focusing on such a niche though!)
Not mentioned in the $799K listing: the high-voltage power lines that run parallel to the tracks. Also, there’s the bad feng shui: The front door faces onto the end of Judson St.
- 5636 Community Dr. [HAR]
