How Hakeem Olajuwon Sold Metro $5.6 Million of Swampland for Just $15 Million

In 2005, Houston’s transportation agency agreed to pay $15 million for 17.3 acres of flood-prone land along the northern bank of White Oak Bayou just north of Downtown, reports the West University Examiner‘s Michael Reed. Former Houston Rockets and UH basketball star Hakeem Olajuwon had purchased the property from the Union Pacific Railroad for an estimated $2 million six years earlier. But even more eye-popping than Olajuwon’s roughly estimated $13 million profit on the sale is this little nugget: A separate appraisal — conducted the same year as the sale — valued the property at only $2.6 million.


Just a year after he bought the vacant property, which sits just across Main St. from the University of Houston-Downtown campus, Olajuwon negotiated a contract to sell it to Trammell Crow Residential for $10 million, Reed reports. But the deal fell through because of the buyer’s concerns about flooding on the site. Five years later, an appraisal ordered by Todd Mason, Metro’s VP of real-estate services at the time, supported a $15 million valuation for the property, but included a note saying drainage and environmental issues connected to the property had not been considered. “In other words,” Reed deadpans, “the impact of having been in the proximity of a large rail yard, a paint spraying warehouse, a mirror manufacturer and a wholesale rubber, plastic and foam producer was not taken into account. Neither was the likelihood of flooding.”

But a separate appraisal conducted a few weeks earlier for UH-Downtown, which Metro had tried to interest in a land-swap deal, concluded that the same land was only worth $2.6 million. Included in the reasoning: the fact that 12.1 acres of the property was within the 100-year flood plain, and an additional 4.1 acres was in the actual floodway. Metro hadn’t provided the UH appraisers any environmental assessments of the property, either.

HCAD currently values the still-vacant property at $5.6 million. A hike-and-bike trail along the former UP rail line now cuts along it, close to the bayou. Though the site is near the beginning of the North Line extension to Houston’s sole existing light-rail line, Metro doesn’t appear to have any plans for it. According to Reed, the manner in which the agency completed the purchase — as the 99.9 percent owner of a joint venture with a company called Wellington Development — means Metro has been on the hook for more than two-thirds of a million dollars in property taxes from 2006 through 2010. (Land held in the government agency’s own name is ordinarily exempt from property tax.)

Photo: Michael Reed/The Examiner. Map: UH-Downtown

27 Comment

  • That’s some strong negotiating there. I bet when they worked him down from 30 million to a mere 15 million, they were mighty proud of themselves.

  • Good lord. Let’s have the Feds look at this once they’re done with Jerry Eversole.

  • I am sure the land price was pumped up based on speculation that land values would go way up if the pie in the sky proposed Hardy Yards development had become a reality. I bet that was the basis for Trammel Crowe’s interest. But that doesn’t get you to 15 mil.

  • Has Metro ever made a good?

  • ooops! Make that ‘good deal.’

  • These people are ANIMALS.

  • When does limitations start to accrue on this one?

  • Hmmm…let’s think about this. METRO is an organization whose leadership can fully expect to transition about once per every mayoral term limit, pretty much regardless of how good or bad a job it does. Its leadership is not and cannot be compensated for financial or operating performance by any meaningful metric.

    The only performance incentive is to be careful to provide plausible deniability to a charge of negligence.

    When that’s what “success” means to an organization’s leadership, you know it’s time to reform that organization legislatively. A benevolent dictator (Grenias) does no good without a viable succession plan.

  • Metro’s own appraiser doesn’t consider flood zone in its lofty valuation? Were the refs looking the other way while Hakeem slam dunked?

  • Maybe the City should historically zone the weeds, and thereby substaintially increase the value and attractiveness of the land.

  • Just sell it to UH downtown even at a loss just to avoid the taxes.

  • METRO is trash. Just like what our Healthcare system will become. Animals.

  • If Metro overpaid so much for this practically worthless land, then this is a disgrace and should be considered a major scandal! Was the decision makers at metro big NBA fans and were dazzled by Hakeem’s star power in the meetings? Was this corruption or incompetence or both?

    Why is this news not even mentioned in the Houston Chronicle and instead buried in the Swamplot blog? Maybe it’ll make the news now that Swamplot has unearthed the story.

    What a bummer for the city…

  • Just wait, when Metro develops it into the next Riverwalk, you doubters will be eating Trammell Crow.

    BTW, aren’t we overdue for news of another rail project catastrophe?

  • I made a TPIA request after the sale for tworeasons. FIRST, I knew the environmental report for Trammel Crow found Mercury contamination where voluntary remediation was recommended. The second reason, was to discover the seller and price. There was a straw man who flipped it. The second ESA disclosed the contamination, yet since METREAUX planned to cover it with concrete or asphalt (acceptable for EPA) they could get away with it. What I found most disturbing was the METREAUX VP for Real Estate, Todd Mason, was one of the agents with David Cook at Cushman & Wakefield who listed it at the time of the discovery of site contamination. He then did the deal for METREAUX.

  • Another example of Animals acting like trash. Metro is THE ZOO.

  • Sounds like even more Organized Crime.

  • I always thought the city should buy that an call it a park.

  • Tom, Todd Mason was with McDade Smith, not Cushman.

  • Gee…I wonder how we ever get into budget shortfalls with smart investing like this?

  • Thanks for the memories, Hakeem!

  • How else do you think Todd Mason helps support the local archdiocese?

  • Where is Frank Wilson hiding now? This guy was a complete idiot. From taking lavish trips on Metro’s bill, allegedly having an affair with his secretary, shredding documents, bungling Metro’s rail plans by buying Spanish trains, and now this.

  • From JL:
    Why is this news not even mentioned in the Houston Chronicle and instead buried in the Swamplot blog? Maybe it’ll make the news now that Swamplot has unearthed the story.


    One of the editors at the Chronicle probably called City Hall and asked if they could run the story. And were told no. There are probably a lot of stories about Metro they are told they can’t run. Stories aout the “old” Metro. Stories about the “new” Metro.

  • Matt…this story is a feature Mike Reed put in the West U Examiner earlier this week and Swamplot pulled it from there. Mike Reed must have been working on it for a while, as there is no real new news to the story. And alot of the details are slightly, um, twisted to make a better story for publication. Some of the comments in this chain are based on the popular dislike of METRO, old or new, and spout many facts that are not true, but rumours that have grown bigger and bigger over the months and taken as truth. Everyone loves to hate Metro!

  • If the flood control district does the channel cut from White Oak to Buffalo may see an off peak period bus parking barn at this location.

  • animals!