THE METRO LAND COMMISSION DEAL Real estate brokerage firm McDade Smith Gould Johnston Mason + Co. is slated to earn as much as $7 million in consulting fees and commissions from land transactions related to the construction of 5 new rail lines, the West University Examiner‘s Michael Reed reports. Last year’s hiring of Kristen M. McDade as associate vice president of real estate services means 2 out of Metro’s 7 real estate division employees are also McDade Smith brokers. The 3-year deal approved by the outgoing Metro board last December outlines that payments are to be made “even though the land to be used has already been predetermined by the route and could be taken through eminent domain, if need be,” Reed explains: “As stated in the contract, ‘Consultant (McDade Smith) shall receive commissions on every transaction closed by Metro, including but not limited to all right of way acquisitions, calculated on the basis of 6 percent of the “sales price.‒ Metro, however, receives a credit of rebate equal to 40 percent of that payment, according to the contract. Since, legally, a buyer — in this case, Metro — cannot force a seller to pay commissions to a broker, Metro’s true price for land acquisition for five lines, including the University route, would likely be bumped up by $6.25 million in buyer paid commissions as well.” [West University Examiner]
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Tag: Buying and Selling
COMMENT OF THE DAY: THE UCHI HOUSTON PARKING PLAN “They have the whole 40,000 sf under contract, which includes the Prive building and the 12,000 sf lot across the street. The Prive building probably wont be leased to a bar or restaurant, thus freeing up more parking for the peak hours.” [Adam Brackman, commenting on Montrose Uchi To Be an Uchi; No Plans To Crush Felix]
Austin sushi dude Tyson Cole is planning to name the new restaurant he’s eyeing for the longtime location of Felix Mexican Restaurant at Westheimer and Grant “Uchi” — just like his Austin original. The new owners “do not intend” to tear down the building (if they did, current development regulations might make it difficult to rebuild so close to the street). Cole’s publicist confirms to Swamplot that Austin restaurant designer Michael Hsu “will be involved” in the project, but notes that the sale of the building hasn’t been finalized. The restaurant wouldn’t open until late 2011.
ASTROWORLD IN PIECES Want to know what new owner Michael Mallick might do with the former AstroWorld site across the South Loop from Reliant Park? It’s none of your business: “As head of a small private real estate investment group based in Forth Worth, Mallick emphasizes the word ‘private’ and won’t even say if he owns any other properties in Houston. . . . Mallick says he would be just fine if nobody ever knew his group acquired the Astroworld site. But word got out and his phone has been ringing for the past two weeks since the deal was completed. ‘We have a few groups that have come to us that have proposals that want portions of it,’ says Mallick. . . . He’s not sure what will become of the land, but says a decision will probably be made around the end of the year. The group might hold the property for three to five years. Or perhaps sell the entire parcel once the market turns around. Or maybe sell off the defunct theme park in pieces.” [Houston Business Journal; previously on Swamplot]
The 104-acre site of the former AstroWorld amusement park has a new owner: the Mallick Group, a development company out of Fort Worth. But unlike the previous owners, Conroe’s Angel/McIver Interests, Michael Mallick doesn’t appear to have a grand vision for the long-vacant lot. He tells Wall Street Journal reporter Kris Hudson that his company is looking into building “a number of things” on the site — perhaps medical facilities, offices, or apartments.
Angel/McIver bought the property from Six Flags in 2005, shortly after the amusement park across the freeway from the Astrodome parking lot was torn down.
- Astroworld Redux [W$J]
- Previously on Swamplot: Even Better Than Greenspoint: New AstroWorld Festival Office Park!, The AstroLot: Houston’s Newest Transit Hub, New Development Announced for Former AstroWorld Site
Photo: Click2Houston
The price Missouri City is paying to purchase the former Quail Valley Country Club from golf-course speculator Mark Voltmann’s Renaissance Golf Group was adjusted from $3.1 million up to $7.4 million last week — 2 years after the city acquired the 390-acre property by eminent domain, and one day before a dispute over the price was set to go to trial. Renaissance claimed the property was worth about $14 million, but at the time of the sale it was listed for $6.59 million by the appraisal district.
Renaissance’s plans to rezone a 17.5-acre portion of the site to allow for a development of 54 Ryland Homes homesites were rejected by the city’s planning and zoning commission in 2006.
MICHAEL B. SMUCK IS GOING TO JAIL Longtime Louisiana and Texas real-estate investor Michael B. Smuck pled guilty this week to one count of mail fraud in connection with the sale of the Briar Meadows Apartments on Dairy Ashford, just north of Briar Forest Dr. An investment company controlled by Smuck purchased the complex in 2004. Smuck sold the property in 2007, according to federal prosecutors, but didn’t tell his investors. Instead, he used the almost $3.5 million in proceeds to pay debts owed by other business entities he controlled: “Smuck continued to send documentation to investors in Briar Meadows in order to give the fictitious appearance that the investment property was still active. Pursuant to the plea agreement entered into by the parties, Smuck faces a term of imprisonment of 30 months and a $250,000.00 fine. In an effort to make the victims of this crime whole, the United States has secured from the defendant an agreement to pay a minimum of $3,299,480 in restitution to investors in both Briar Meadows and Yellowstone Ranch, which are apartment communities in Houston, TX.” [U.S. Attorney’s Office; background; previously on Swamplot]
COMMENT OF THE DAY: PRICED OUT OF THE CONVERSATION “The fact that ‘many’ people think the Heights is overpriced is meaningless – if other people besides yourself think that home prices in the Heights are spot on and actually buy the homes, it doesn’t matter what everyone else thinks. For the record, the way you feel about the Heights is how I feel about West U. I think the neighborhood is completely overpriced and I would never pay the going rate for West U. But – clearly, many people disagree with me, as those houses continue to fetch what I consider to be ridiculous prices. I can argue as long as I want that West U is overpriced and I can take my money elsewhere, but all that means is that I’m clearly out of step with hundreds of people who feel differently.” [LT, commenting on Swamplot Price Adjuster: The Heights of 2-2ness]
COMMENT OF THE DAY: LOCAL EXPERTS “Wow, these comments are amazing…quite obviously you aren’t the target audience for a renovated Heights bungalow. Not to sound like Jeff Foxworthy but if you don’t like subway tiles, craftsman style, small (to Houston) homes or high prices per square foot you aren’t a good person to guess on the price of a house in the Heights. Similarly I wouldn’t make a guess on a Katy home because I wouldn’t ever have the desire to live there. . . .” [Wannabe, commenting on Swamplot Price Adjuster: The Heights of 2-2ness]
COMMERCIAL BREAK The dollar volume of Houston-area commercial property sales for the 12 months through March was $2.36 billion, almost exactly half the figure for the previous 12-month period, reports LoopNet: “In the Houston office market, only $830 million worth of deals closed in the period ending in March 2010 compared to $1.37 billion a year earlier, while the price per square foot dropped to an average of $110 compared to $172 a year earlier. The square footage price in the Houston retail market has dropped the most precipitously, down to $69 in the most recent period from $143 a square foot for the year ending March 2009.” [Houston Business Journal]
AT RISK ON RUSK 
Earlier this month Cameron Management lost the 2000 St. James Place office building to foreclosure; now CEO Dougal Cameron is trying hard not to lose the Houston Club Building Downtown. So the Cameron-controlled limited partnership that owns the 18-story 62-year-old office building at 811 Rusk is declaring bankruptcy. Cameron had visions of converting the building into a hotel or high-end apartments when his investment group bought it from JPMorgan Chase in 2007; more recently the company hired PageSoutherlandPage to plan an “educational facility” to take over several floors. The building has 5 levels of parking. The Houston Club, which counts George Bush as one of its members (and as the name of one of its rooms), has a low-cost lease on four floors that expires in five years. [Houston Chronicle] Photo: Silberman Properties
STUCK IN THOSE NEIGHBORHOOD SAND TRAPS The Ohio investor who bought up 3 Houston community golf courses over the last decade, then sold the one in Quail Valley to Missouri City a couple of years ago, is running into a few obstacles in his attempts to sell the other 2 to developers: “The latest roadblock came with a jury verdict late last year that would prohibit the use of the land that once served as the Inwood Forest Country Club for any purpose other than a golf course. . . . The Harris County jury found that the Inwood Forest golf property contained an ‘implied reciprocal negative easement,’ [Inwood Forest homeowners association member Julie] Grothues said. In plain English, that means that an owner of the course is bound to keep it as a course even though the original deed has no such restrictive covenant. The lawyer for the homeowners association argued that the course was an essential component of the neighborhood, and that allowing it to be cut up for development would irrevocably change the character of the community and the value of the homes.†Is Mark Voltmann’s game going any better at the shuttered Clear Lake Golf Club? “The deed for the Clear Lake property contains a restriction preventing owners from using it for anything but a golf course or recreational facility until 2021. Voltmann has filed suit to try to bust the deed restrictions. In theory, success could translate into a big payday, as a portion of the property has good commercial potential. But the Inwood verdict is looming. If it stands up, homeowners could use the same argument to stymie him again.” [Houston Chronicle; listing]
Remember the swingin’ days of a couple of years ago, when InnerLoopCondos bought Bistro Vino and got ready to tear down the 24-year-old Montrose restaurant at the corner of West Alabama and Roseland? And then the company put out that goofy little internet survey asking us to vote on which type of condo-building cliche you’d like to see shoved onto the site? If you’re one of the lucky participants who somehow managed to write in “Give it up,” congratulations! Your choice has been selected!
Mexico City natives Jorge and Isaac Alvarez have since secured a lease-purchase of the former restaurant property from its would-be redevelopers. Jorge Alvarez, a custom-home developer himself, had a crew from his Alvgar Construction company renovate the 1930’s Tudor-style home and patio.
The brothers’ “modern Mexican” restaurant, Ocean’s Ceviche, isn’t expected to open officially until May 21st, but intrepid Swamplot photographer Candace Garcia brings you this little preview of the spiffed-up grounds:
CASH FOR KASHMERE GARDENS A few residents of Kashmere Gardens are fighting Harris County Flood Control District plans to buy and demolish 40 homes in the upper Fifth Ward neighborhood: “The $175 million Project Hunting will widen and deepen a half-mile stretch of the bayou and create a 75-acre stormwater detention basin. The district plan purports to remove 5,000 homes from a 100-year flood plain. The engineer-speak means those homes currently face a 1 percent chance of flooding each year. The 1 percent happened to at least some neighborhood homes during Allison and Hurricane Ike. It also happened, according to district information, in 1979. And 1980. Again in 1983. And again in 1989, 1993, 1994, 1997, 1998, 2006 and 2007. But a group of holdouts does not believe that. Their homes flooded only during Allison, they said. The real numbers the district is acting on have dollar signs in front of them, residents said. Houses in their neighborhood can sell for as little as $30,000. ‘(The district) wants to go cheap because they consider Kashmere Gardens as poor, poor people,’ neighborhood resident Deborah Butler said. District officials insist the buyouts are about protecting residents, not cutting corners.” [Houston Chronicle; map]
SOME VERY LARGE BUILDINGS NOW OWNED BY THE BANK Oh, but this time it’s the Houston Food Bank, announcing it has finally acquired restaurant distribution giant Sysco Foods’ former warehouse facilities at 535 Portwall St., just northeast of the intersection of I-10 East and the Loop. Officials of the nonprofit organization are set to announce plans today for renovating the property into the largest food bank in the country. The Houston Food Bank paid $17 million for the complex, down from the $22 million quoted when the deal was first announced: “The acquisition included a 272,711-square foot warehouse, a 153,341 square-foot freezer building and a 15,870 square-foot truck center. . . . This deal had been in the works since 2007 when Sysco announced it was selling its storage warehouse to build a new one on the north side of town.” [Prime Property]