COMMENT OF THE DAY: WHY DON’T SCHOOLS LEASE? “HISD needs to get out of the real estate business and set themselves up as a 40 year build to suit lease with AA credit and 10 year options to the end of time, thus allowing private development to be holding the bag in year 41 if the neighborhood has turned and students have migrated elsewhere. Oh, they haven’t? Still top notch? Great, we renew, and will again in 10 years. Hell, the deal would/could even include mandatory capital infusion from the developer (or assigns, sells) upon exercise of option! Why am I not in charge? I welcome people to explain the downside of this idea, truly. I’ve been unable to see it, myself. Oh, and if the peanut gallery tries saying that there would be a developer on the planet who wouldn’t jump on a 40 year lease commitment build to suit with an HISD guaranty is just lying. If HISD defaults on the rent, first of all we should all be stocking up on shotgun shells and bottle water, but more over IF they default the developer has permanent debt, favorable loan terms, and can easily shop the market to backfill with any number of learning institutions who would be licking their chops to get that deal.” [HTX REZ, commenting on Third Ward Residents Protest HISD Proposal To Close Historic School]
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Leasing
MACY’S DOWNTOWN: WHILE SUPPLIES LAST! 
A Macy’s spokesperson tells Nancy Sarnoff that after 66 years on Main St. the department store will be locking up for good “probably Saturday.” As Kenneth Franzheim’s former Foley’s awaits an expected demolition, Sarnoff reports a rather unglamorous retail experience inside: “Only two floors in the 10-story building were open Monday. The first housed the store’s remaining merchandise. It included everything from dishes to fur coats, but the pickings were slim. . . . The second level had furniture and fixtures. Everything was for sale, including lighted display cabinets, mannequins and cardboard boxes for holding small pieces of jewelry.” [Prime Property; previously on Swamplot] Photo: Jim Parsons
YOU KNOW WHAT THEY SAY ABOUT SOCIAL SECURITY 
Has Midtown become too hip even for the federal government? The Social Security Administration is leaving, having lost its lease at the low-slung building at 3100 Smith (shown at right), reports CultureMap’s Whitney Radley: “Once a sort of wasteland, the surrounding neighborhood teems now with development, restaurants, bars, mixed-use complexes and multifamily units . . . . speculation that the building might be prime space for a restaurant or even torn down to make room for a mid-rise, is rampant.” [CultureMap] Photo: Panoramio user Wolfgang Houston
Rice Epicurean Markets is finally giving up on 4 of its 5 remaining locations, the company announced today. The lone holdout is the company’s store on Fountain View at Inwood, which will remain open for the foreseeable future. Its Holcombe, Weslayan, Tanglewood, and Memorial locations will be leased to The Fresh Market, a chain based in North Carolina.
COMMENT OF THE DAY: THE APARTMENT PAMPHLETEER “Everyone who is a renter or is a landlord should know and read this.” (PDF) [denise, commenting on How Quick To Kick ’Em Out and Tear It Down?]
HOW QUICK TO KICK ’EM OUT AND TEAR IT DOWN? “Can a developer who buys an apartment building (or duplex, four-plex, etc.) simply ignore an existing lease’s terms and give 30 days notice before knocking it down to build something new? Half the real estate developer/lawyer types I know have told me ‘no way.’ They say a contract is a contract and the new owner has to abide by that and let you live out the lease or offer a buyout. But the other half say there’s a loophole in Houston permitting that says if the new owner plans to tear down the building, once they have their variance granted, they can ignore the lease terms and just give 30 days notice to move out. Help! Do you have the definitive answer?” [Swamplot inbox]
SPROUTS FAR OUT 
The Sprouts Farmers Market grocery chain’s long-awaited Houston-area landing will begin with 3 outside the Beltway locations next year. Sprouts scout Ed Page of UCR MoodyRambin Page says leases have already been signed for a 25,300-sq.-ft. spot at the southwest corner of Cinco Ranch Blvd. and Peek Rd.; for a 29,000-sq.-ft. store at FM 529 and Hwy. 6 in the Copperfield Village Shopping Center; and for a 28,000-sq.-ft. location off the Tomball Pkwy. at Spring Cypress Rd. in the Spring Cypress Village shopping center. Page tells reporter Shaina Zucker leases are being negotiated for several other sites. The southwest organic-friendly chain swallowed up competitor Sunflower Farmers Markets earlier this year. [Houston Business Journal; previously on Swamplot] Photo of Colorado store: Sprouts
BEHIND THE GLASS AT THE DOWNTOWN STRIP HOUSE PEEP SHOW 
Peeking through darkened windows into the former Strip House steakhouse on McKinney St. in Houston Center, which abruptly shuttered over the summer, restaurant watcher Eric Sandler spies signs that workers have gone further than simply removing the strip-club-themed decorations that once lined its walls. Ladders and “other signs of construction” reveal designs on the space by the Pappas restaurant group, which Sandler reports is preparing to put a Pappas Bros. Steakhouse in its place. [Eater Houston; previously on Swamplot] Photo: Flickr user jerry1540
A restaurant owned by family members of former Rockets star center Yao Ming has been shut out of the space it leases from the Houston Pavilions — for nonpayment of rent, according to a sign posted on the door by Midway Management. Yao Restaurant and Bar opened in the space near the corner of Dallas and Fannin — a few blocks from the Rockets’ home court at the Toyota Center — more than 2 years ago. A story in the NY Daily News earlier this year had owner Bill Wang saying business had been good since Ming’s retirement from the Rockets in 2011, but also giving a shout out to the Rockets’ latest star: “We want this place to be the home restaurant of Jeremy Lin.†A group headlined by former LA Lakers point guard Magic Johnson bought the 3-block Houston Pavilions complex out of bankruptcy earlier this year.
- Yao’s Locked Out Of Houston Pavillions [Eater Houston]
- At Yao’s place, Linsanity already on menu [NY Daily News]
- New owners hope to bring new life to Houston Pavilions [Houston Chronicle]
- Previously on Swamplot: CityCentre Owner Buying Houston Pavilions
Photo: Wolfgang Houston
The retail tenants at the bottom of the Americana Building at 811 Dallas across Travis St. from Macy’s downtown have just about cleared out, reports a reader: Popeye’s, the Travis Food Store, and Zero’s Sandwich Shop (pictured at right) are already gone. Fast Signs has a sign up saying it’s moving soon. Subway is still open, but the reader reports hearing that its lease has been bought out. When the James Coney Island on the ground floor of the 15-story office block shut down 2 years ago after 35 years in the same location, a spokesperson complained to KHOU 11 News that the restaurant had been forced to close “because their building is falling apart, but the landlord won’t fix it.”
Photos: Boxer Property (top); Swamplot inbox (below)
COMMENT OF THE DAY: THE RENT ISN’T TOO DAMN HIGH “People who think that $3,000 plus for rent in a luxury high-rise in Houston is ‘outrageous’ have not been paying attention for the last 10 years. Museum Tower and several others have been at 95%-plus occupancy for years with similar rates. I think a lot of Houstonians have NO idea just how wealthy hundreds of thousands of their fellow Houstonians actually are today.” [Jon, commenting on Ashby Highrise To Start Rising on Bissonnet This Year]
How long does DiverseWorks plan to stay in the new Midtown location it announced yesterday? A press release put out by the 30-year-old performing and visual arts organization doesn’t say, but DiverseWorks had been listed prominently as one of several groups meant to anchor the proposed Independent Arts Collaborative building planned for a now-vacant block at 3400 Main St. The new DiverseWorks spot in a 5,500-sq.-ft. portion of the former Cleburne Cafeteria building at the corner of Fannin and Cleburne is just 7 blocks south. It’ll open September 7th. With its move out of the warehouse district slot north of Downtown at 1117 East Fwy. it’s occupied for 20 years, the DiverseWorks Artspace will lose its built-in theater as well as its large parking lot and covered dock. It’ll gain a perch closer to the Museum District — and an address first-time visitors will be able to find. (4102 Fannin St.)
- DiverseWorks will move Sept. 7 [Houston Chronicle]
- Diverseworks Reboot: Goodbye Docks! [Glasstire]
Photos: arch-ive.org and Cleburne Cafeteria
COMMENT OF THE DAY: THE SAME BOAT “. . . When talking to people looking for stuff in Montrose, this is what I hear: 1) Nothing available 2) Over priced for what you get 3) By the time you try to take it, someone else already has 4) What you do get will have bad electric, bad roof, bad pipes, sketchy tenants, etc. 5) Was built in the 60′s most likely. Doesn’t have it’s cert of occupancy, no water pressure, low insulation, old windows, etc. Then I like to joke that this is what I hear from people trying to BUY apartments in Montrose. Point being, the challenges you face as a renter are the challenges you face as an investor. And the solutions are often the same: Network with owners, jump on something good if you see it, communicate with the property manager showing if you don’t like the place (this is big), look every day. . . .” [Cody, commenting on Comment of the Day: What’s the Thought Process?]
STRIPPED Has the Strip House — the Shops at Houston Center stripper-themed steak house — closed its doors for good? Or is it just, you know, trying to renegotiate its lease with a landlord’s lockout notice for non-payment of rent taped to its McKinney St. front door? Reported outages of the Strip House’s Facebook page and Twitter feed may turn out to be mere negotiating tactics. “Our goal is to resolve this matter as soon as possible,” a release sent out this morning quotes owner Penny Glazier as saying. Her company, the Glazier Group, declared Chapter 11 bankruptcy in late 2010. The chain owns Strip Houses in 3 other cities. [Eater Houston] Photo: Flickr user jerry1540
WAITING FOR A GALLERIA WHOLE FOODS 
Has Whole Foods Market finally signed a lease for the store on Post Oak Blvd. near San Felipe that the developers of BLVD Place have been promising since 2007? Yesterday Whole Foods announced it had signed leases for new grocery stores averaging 37,500 sq. ft. in 12 cities, including Houston. Whether that means a new location near the Galleria or somewhere else in the city, it could still be a while before it opens: “These stores,” says the press release, “currently are scheduled to open in fiscal year 2014 and beyond.” [MarketWatch; previously on Swamplot] Rendering: Wulfe & Co. Update, 2:50 pm: The new store will be in Champions.
