THE SELLOUT CROWD AT PALISADE PALMS 
A Florida real-estate developer who bought up 17 condos in the Palisade Palms towers on Galveston’s East Beach at low, low pre-construction prices 5 years ago was finally able to unload 10 of them at an auction earlier this month, taking what he describes as “a 40 percent haircut.“ Mark Shapley tells the HBJ‘s Jennifer Dawson he’s “done in Galveston,” even though he’s still stuck with 3 units in the 287-unit development. (He’d already sold 4 others). Only 50 people showed up to Shapley’s sales event — less than one-tenth of the draw of a June auction where the buildings’ original developer was able to get rid of 27 units. And Shapley sold his units for much less too: from $170,500 for a 1,044 sq.-ft. 2-bedroom to $742,500 for a 2,659-sq.-ft. penthouse. [Houston Business Journal] Photo: Palisade Palms
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Tag: Buying and Selling
A 2-story Frost Bank with a drive thru will take over the Kirby side of the former Village Plaza shopping center between Dunstan and Bolsover — once the demo company finishes smashing the Bike Barn, Mattress Giant, and the shells of a few other stores its been chewing on, reports the Village News. Frost bought the 35,000-sq.-ft. leftover portion of the center at 5925 Kirby earlier this month from the Children’s Assessment Center. The CAC plans to expand its Rice Village “campus” (named after attorney John M. O’Quinn) and build a parking garage on the back half of the property.
KTRU SALE: NO NEED FOR SNEAKY VISITS AFTER ALL Texas Watchdog has now released all the emails it collected related to the sale of Rice University radio station KTRU’s FM broadcast license and its not-so-shabby transmitter in Humble to the University of Houston. And for the local-radio-obsessed, there are plenty of repetitive conversations to pore through. A couple of the messages, though, bring a little more clarity to what happened after one of the deal’s brokers, Public Radio Capital director of acquisitions Erik Langner, suggested that Rice invent some pretext to allow a consulting engineer to inspect the station (which is run by students they didn’t want to tip off that a sale was likely to take place). It appears no subterfuge was needed, after all. “They brought the station manager and one or two of the key staff into the loop on the sale,” a colleague of Langner’s wrote to KUHF general manager John Proffitt about a month later. As Texas Watchdog reporter Steve Miller notes, Proffitt later identifies the KTRU staff members as the station’s general manager and chief engineer — both of whom are Rice employees. [Texas Watchdog; previously on Swamplot]
COMMENT OF THE DAY: SELLING OUT FROM UNDER THE KIDS “Would anyone charged with this project done it any differently? If you have to move your family to a new neighborhood, do you seek your kids’ permission first? Yeah, it affects them, but it’s not their decision.” [Carol, commenting on Getting a Good Look at KTRU without Tipping Off Students]
GETTING A GOOD LOOK AT KTRU WITHOUT TIPPING OFF STUDENTS Or: Beware of those “inspectors” the owner brings through. Emails obtained by Texas Watchdog detail a sneaky technique agents acting on behalf of Rice University may have used to put together the sale of student-run radio station KTRU to the University of Houston — without having complete access to the facilities. In an email sent in May of this year to another broker representing the university in the still top-secret transaction, the director of acquisitions of Public Radio Capital suggested a way to put together a complete list of the station’s assets without “tipping off” the students in charge of the station that a sale was being negotiated: “We request that Rice provide a cover story for an independent 3rd party engineering consultant, to be chosen by UH, to perform an inspection of the transmitter building, transmitter equipment, transmission line, tower and antennae. Rice should actually hire the consultant we specify, so there will be no question as to the source of the inspection, which of course will have to be coordinated with the station engineer somehow. Rice can use any reason it chooses, some of which can include change of insurance, inventory needs, or any other plausible explanation.†Other emails indicate Rice officials had wanted to put KTRU up for sale 2 years ago; UH became interested in the station — now slated to broadcast in a classical-music format — early last year. [Texas Watchdog; previously on Swamplot] Late Update: Rice didn’t have to lie.
HERITAGE PLAZA SELLS HIGH 
That vaguely Mayan-looking tower at the northwestern edge of Downtown sporting the popular no-neck stone-top-sinking-into-a-glass-base look will soon have a new owner. Brookfield Office Properties has agreed to buy the 53-story Heritage Plaza for an almost-local-record $325 million — thanks in part to a little 12-year $200 million loan from MetLife negotiated by the seller, Atlanta’s Goddard Investment. Goddard paid $121 million for the building a little more than 5 years ago; the company added a new 1,058-car parking garage catty-corner to the property in 2008. [Real Estate Alert; previously on Swamplot] Photo: Jeff Balke
COMMENT OF THE DAY: WHO’S SITTING ON ALL THOSE VACANT BUILDINGS IN MIDTOWN? “I don’t get why there are so many empty buildings in the area. With such high land values (and tax rates), why don’t they sell them? It seems there are a lot of people that can afford the massive expense of sitting on a property (taxes, insurance, minimal upkeep to keep the city fines away, taxes, etc.) I’m sure a lot of instances it’s someone asking too much for a property. But if it’s still sitting after YEARS on the market (and YEARS of expense), something should tell you that you have it priced too high. I don’t know… I guess I’d just start freaking out if only a few months passed and an empty property of mine was just sitting there. I have had multifamily properties on the market but they’re full and [bringing] in income while on the market so I’ve never been in a rush. But a vacant building? *shudder*” [Cody, commenting on How You Can Help Large-Scale Graffiti in Midtown Get Off the Ground]
Welcome home to Park Memorial! More than 2 years after city officials ordered the entire Memorial Dr. complex evacuated, the coast may now be clear for owners of the Park Memorial Condominiums to move back into their homes! Except, umm . . . some of those sheet-rock, copper-wiring, and AC-unit removal operations that have been going on in the meantime on the locked and officially empty grounds might make moving back in a little rough. 11 News’s Gabe Gutierrez reports that a Harris County district judge has ruled that the city’s order to vacate the property violated the state’s due process rules because there was no prior notice or hearing, and that there was “no evidence that there was any emergency or immediate danger that justified” requiring the residents to leave without one. The city plans to appeal the ruling.
What galls jailed billionaire Allen Stanford even more than having to sit through the court-ordered sell-off of his entire hard-earned real estate portfolio? It’s that it’s all happening in a down market! Stanford’s lawyers have been arguing in court that liquidating the accused huckster’s properties while real-estate prices are depressed isn’t such a smart idea. A good $9 million of the $12.2 million the folks behind the Black Forest Cafe are paying to buy the clunkily ornate former Stanford Financial Group headquarters building at 5050 Westheimer across from the Galleria, for example, will go to pay off the property’s mortgage and back interest. What’s the guy gonna have left to live on once he’s acquitted of all those ridiculous Ponzi scheme charges? But an attorney for the receiver managing the sales says he’s just trying to save money for the estate. Next Stanford property on the block: The former Stanford Aviation hangar (above) at 100 Jim Davidson Dr. near Sugar Land Regional Airport, at an auction this week.
- Selling a ‘Fraud’ Portfolio [WSJ]
- Allen Stanford coverage [Swamplot]
- Also previously on Swamplot: The Black Forest Mix
Photo: Loopnet
Coventry Development’s senior VP Keith Simon wouldn’t answer media questions today concerning the possibility that the new 1,800-acre mixed-use community his company wants to develop just south of The Woodlands might have the newly consolidated headquarters of the largest oil company in the world as its very first neighbor. In January, the Chronicle‘s Nancy Sarnoff reported on plans shown to her — apparently prepared for Exxon Mobil — showing an “elaborate corporate campus, including 20 office buildings with 3 million square feet, a wellness center, laboratory and multiple parking garages” on a 400-acre site near the intersection of I-45 and the Hardy Toll Rd.
Meanwhile, an informant tells Swamplot about a real-estate “study” Exxon Mobil has reportedly been conducting of all the properties it owns and leases in Houston: “the old Humble building at 800 Bell downtown, the Chemicals complex at Katy Fwy. and Eldridge, the lovely Greenspoint campus across from Greenspoint Mall, the research facility on Buffalo Speedway, and others.” The company is considering vacating all these sites — as well as its large and valuable Fairfax, Virginia campus outside Washington, D.C. — and consolidating all employees in the new megacampus just south of The Woodlands. (Baytown refinery employees, don’t worry — you’d get to stay put.)
Writes our informant:
Although the company is telling its understandably concerned employees who happen not to live in Spring or The Woodlands not to worry, that this is still just a study, there is already work being done to prepare the site for building.
Where might have Exxon Mobil have come up with those 400 acres?
Longtime Swamplot readers may remember Richard Maier as the listing agent who advertised his own Talbott Wilson modern as a freebie that just happened to come with the 1.35-acre lot on Glencove St. he was selling. (The pitch was successful, luring buyer David Mincberg and later, a demolition crew.) Michael X. Flynn was the designer and contractor responsible for transforming a small Upper Kirby office building into this little villa of vaguely Corbusian pleasures. (That one’s still on the market.) Now they’ve put their own little uh, white house on the market. The pair moved into 26 Crestwood Dr. a few years ago, though they previously owned the 2 properties that flank it. All 3 mansions share a gated driveway that faces directly into the southern reaches of Memorial Park.
Now’s your chance to peek around what they’re leaving — the scene of that Annise Parker fundraiser you missed:
The new owner of the 2 “infamous” Skylane apartment complexes on West Alabama is already at work making changes. Montrose apartment investor and real-estate agent Cody Lutsch picked up the 2 foreclosed and red-tagged properties from Enterprise Bank earlier this month. For the 25-unit building at 502 West Alabama (on the corner of Garrott), Lutsch has plans to replace the window units with small ductless split A/C systems, fix some structural issues, switch to monthly instead of weekly rentals, and change the name. Also: He’d like to reduce the crime associated with the property, by adding gates, lights, security cameras, larger trash bins, and maintaining the landscaping.
Lutsch has fewer changes planned for the 32-unit Skylane across the street from Spur 527 at 219 West Alabama (above): He says he’s already begun addressing criminal and safety issues at the property, but otherwise plans to let it run “as it’s been running,” as a pay-by-the-week complex. Lutsch says he hadn’t planned to buy that property originally, but decided the property’s land size, rental income, and location might make it attractive to other investors later on.
COMMENT OF THE DAY: MOVING FOR KIDS “. . . You obviously aren’t part of the “younger†generation. As a part of the mid-upper end, I can attest that the allure of townhomes wanes around the time the first child starts walking. [It’s] a pain to haul everything up and down the stairs and keep a kid from tumbling down. Heights and the close in ‘burbs like Oak Forest, Garden Oaks, Braes Heights, Westbury are appealing to many because they are closer in-town. I’m surprised no one has figured out how to clean up Sharpstown yet. No one wants to spend alot of time in their car.” [justguessin, commenting on This Draft of Changes to the Preservation Ordinance Is Different, Somehow]
The launching pad for I-45’s Mount Rush Hour, that presidential muck circle in Pearland, and more outsize sculpture projects has a buyer. David Adickes — creator of the giant Sam Houston of Huntsville and the disembodied cellist in front of the Lyric Center Downtown, and yes, the original owner and projectionist for sixties psychedelic Commerce St. hangout Love Street Light Circus — is selling his SculpturWorx compound off Sawyer St. to Phil Arnett and L.E. “Chap” Chapman. Arnett and Chapman are best known for turning an old staple manufacturing building down the street from the original Goode Co. Bar-B-Q on Kirby into the Bartlett Lofts. Their plan for Adickes’s 78,175 sq. ft. of warehouse space at 2500 Summer St.: keeping the “artist flavor” (and most of the tenants) of the old buildings, while renovating the property and using up to 22,000 sq. ft. of it (Adickes’s first-floor studio, for example) as commercial space — maybe including a restaurant or two.
COMMENT OF THE DAY: MINIMUM LOT SIZE ORDINANCE EXIT STRATEGY “. . . The future of the minimum ordinances will depend on the individual blocks when the ordinances themselves expire. A few of my neighbors are planning for their retirement as soon as their ordinances expire with several options: duplexing their house with a garage apartment for rental income or selling out to condo builders as a last laugh for the looming McMansions next to them. If I don’t think my block will re-up our ordinances, I’ll be sure to sell out before the vultures start circling.” [Studes Second, commenting on Where Houston’s Lot-Size Restrictions Went, Year by Year]