EVEN IF SHAYA BOYMELGREEN CAN MAKE IT THERE, HE WON’T BE BUILDING TOWERS HERE In his first interview with a reporter in 3 years, international developer-in-distress Shaya Boymelgreen tells the New York Observer he’s back in Manhattan, scouting for “new development opportunities,” and singing an old movie tune: “Unless I get an offer I can’t refuse, I would like to concentrate now in Manhattan. I believe this is now the opportunity and the time. If I cannot make it in Manhattan, I don’t know where else I can make it.” Translation: His long-threatened twin condo tower development planned for San Felipe at the end of Woodway in Houston is officially toast. [New York Observer; previously on Swamplot]
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Tag: Development Strategies
COMMENT OF THE DAY: THE CREEPING SOCIALIST MENACE THAT LURKS WITHIN “It’s horrifying to think that a business would have to actually have to work with neighbors who will be living with their presence for a long, long time. The next thing you know, people will start thinking that as citizens they have some stake in the city they live in, and a right to participate and influence its future! What kind of crazy society would we be then?” [John, commenting on Mayor Parker to Walmart: Start Talking]
MAKING THE TITLE INSURANCE PAY A Harris County district court has ordered Stewart Title Guaranty to pay $2.8 million to a Sugar Land developer after the title company failed to pay out on a title policy. Back in 2007, Ponderosa Land Development was hoping to build a Chase Bank branch at the corner of Settlers Way and Highway 6. AmeriPoint Title, the title company for the transaction, had obtained title insurance from Stewart Title to cover its work. But AmeriPoint’s title search failed to uncover a deed restriction on the property that specifically prohibited banks from being built on that site: “Stewart Title only offered to pay $200,000 of the $1.83 million title policy, arguing that the land was not worth that much. [Ponderosa’s James] Chang says the purchase price was dictated by the value of the property with the ground lease to JP Morgan and planned sale of the bank to an investor upon completion. Ponderosa is now free to sell the vacant property. Houston Suds has had a contract to buy the site for $953,000 since November 2008, but could not close the transaction and build a car wash until the legal matter was resolved.” [Houston Business Journal; previously on Swamplot]
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]
COMMENT OF THE DAY: 104-ACRE VACANT FORMER ASTROWORLD SITE IS A DEVELOPER’S DREAM “Can’t wait to see the giant box rolled in and opened to reveal a strip center with: 1) Starbucks on the corner 2) Bed, Bath & Beyond 3) Borders|Barnes and Noble (choose one) 4) High-end Dentistry office not covered under any mere mortal’s dental plan 5) Wine bar 6) $6 ice cream place 7) vitamin/supplement retailer 8) standard set of strip center restaurants (Chinese, Italian, Tex-Mex deli, etc.) 9) if the place is classy enough, may graduate to having Next Tier of ethnic-themed restaurants (Thai, Vietnamese, Indian, Greek, etc.) 10) Starbucks on the opposite corner” [SL, commenting on Fort Worth Developer Buys Himself an Empty AstroWorld]
A CONDO OWNERS FAN SITE FOR SHAYA BOYMELGREEN Still waiting for the developer of the twin-tower condo development proposed for San Felipe near the end of Woodway to provide an update on the project? Some New Yorkers would like a word with him too. The residents of the Newswalk Condominium in Brooklyn have created a website called Shame on Shaya, documenting in Russian, Hebrew, and English the “extraordinary number of construction defects” in developer Shaya Boymelgreen’s first high-profile development, constructed in 2002: “The building is now undergoing a two-year, $7 million construction remediation project. Newswalk residents are currently in legal action against Boymelgreen with a suit seeking no less than $10 million in damages.” Spokesman Michael Rogers explains: “Many of us got to know Shaya in the early days of Newswalk, and found him friendly and likeable. He may not fully understand what the residents of Newswalk are suffering, and this campaign is a way to bring him up-to-date.†[Previously on Swamplot]
COMMENT OF THE DAY: WHAT I LEARNED EARLY IN THE HOUSTON REAL ESTATE BIZ “In 1993, I was with a firm that looked at buying many of the run down apartment complexes in Greenspoint. Our intent was to renovate them, thinking that the many class A office buildings contained many potential residents. Greenspoint was an enigma: awful multi-family and beautiful office development. You don’t often see the two side by side like this. When we got into town and started touring the area, we immediately saw the two critical falacies of our plan: 1. we needed to own and renovate all of the multi-family to turn the neighborhood. One holdout property would serve as a sanctuary for all that was bad about Greenspoint. Unfortunately, not every property was available for purchase. 2. Some of the properties, in particular those developed by Fred Rizk, were functionally obsolete. For example, sliding glass doors opening directly into parking lots–no way to easily dress this up. We never spent much time on the deals after that. On a more positive note, my boss at the time corrupted my by taking me to the St. James Club, and since that time I have considered it the best strip club ever.” [LandMan, commenting on Waiting for the Renaissance: What Could $32 Million Buy at Greenspoint Mall?]
Always on the lookout for striking images, art blogger Robert Boyd discovers an intriguing pattern in the map included in the listing of the nearby Fabulous Flea property discussed a couple of days ago on Swamplot. He asks:
Do you think the property lines of of those houses were deliberately designed to look like a man? (Sort of like the Vitruvian Man, don’t you think?)
Boyd dubs the pattern — found on the lower portion of the Upper Kirby blocks surrounded by Elbert, Bammel, and Sackett — “Elbert Street Man.”
But there’s a more direct reference. The anatomical property lines are the mark in Houston’s real-estate landscape of a much more well-known figure:
Allen R. Stanford.
COMMENT OF THE DAY: LOT SIZE AND THE ROAD TO DEMOLITION 
“. . . The owners of the above pictured house realized a LONG time ago that the value of their 10,000 SF lot was the same with or without the existing structure. THAT is the point when maintaining the structure becomes uneconomical. THAT is when repairs stop. THAT is the starting point on the path to real decay and eventual demolition.
Interestingly, the economics of a townhouse give their owners MORE incentive to keep up with repairs. Their ratio of structure-value to land-value is higher meaning that going forward they should have MORE economic incentive to keep their structures maintained.
Even a $100,000 structural repair on a townhouse on a 1,800 SF lot isn’t likely to push it into teardown status. Making the repair is still economically rational. You’d be far less likely to affect a similar repair on a single family home on 5,000 SF lot in the same neighborood.” [Bernard, commenting on Up and Down in Hyde Park] Photo of former property at 1212 Hyde Park Blvd.: fortbendtomontrose
COMMENT OF THE DAY: HOUSTON HOMEBUILDING TALES, ABBREVIATED “Once upon a time we knew how to build homes to take advantage of [things] like prevailing winds, natural shade, the position of the sun at different times of the day and year. Then we started just smacking them down in a line after clear cutting the entire sub-development and relying on being able to chuck in a bigger AC unit to take the load.” [Jimbo, commenting on Factory-Built Green Homes for Houston]
WHEN ALL THOSE CORNERS WERE ITCHING FOR BANKS Coming soon to a courthouse near you: Ponderosa Land Development Co. and the bank corner that got away: “Ponderosa bought nearly an acre in Sugar Land three years ago from Gateway Financial for a price of $1.8 million. The land at the corner of State Highway 6 and Settlers Way was purchased for development of a JP Morgan Chase Bank branch. Over the past five years, Ponderosa has built about 50 bank branches in Texas for Chase Bank. [Ponderosa’s James] Chang says Ponderosa had already secured a long-term ground lease with the bank, and an investor was lined up to buy the property once the building was complete. Shortly after the land acquisition closed in April 2007, Ponderosa demolished a gas station that was operating on the site to prepare for construction of the bank branch. In the process, Ponderosa learned that the Sugar Land site carries a deed restriction prohibiting construction of a financial institution. The alleged oversight on the part of AmeriPoint [Title] in conducting a title search put the brakes on development. ‘Missing the restriction was kind of an important miss,’ says Chang. Stewart Title wrote a title insurance policy based on AmeriPoint’s work. . . . Ponderosa filed suit in July 2008 to recover the $1.8 million land purchase price. The firm is also seeking $1.6 million for three years of lost profits. Ponderosa tried to collect on the firm’s $1.8 million title insurance policy, but Chang says Stewart Title claims the diminished value of the land is $200,000.” [Houston Business Journal]
ASHBY HIGHRISE DEVELOPERS DROP NAMES, MOVE TO DISTRICT COURT 
What do the Fairmont Museum District, La Maison on Revere, Millennium Greenway, and 2121 Mid Lane apartments, the Medical Clinic of Houston, and the trigger-happy Sonoma development in the Rice Village have in common? They all make cameo appearances in the latest version of Buckhead Investment Partners’ lawsuit against the city of Houston. The claim: that none of those projects were subjected to the same traffic restrictions as Buckhead’s proposed 23-story tower on the corner of Bissonnet and Ashby, next to Southampton: “The Ashby high-rise developers re-filed their lawsuit April 7 in state district court, where it will focus more heavily on claims the project was denied permits for its original design because it was subjected to ‘capricious and unreasonable’ standards.
Court documents submitted by attorneys for the Buckhead Development Partners, show the suit against Houston continues to center on the city’s application of the driveway ordinance as a basis to refuse a final building permit.
The city has said it is correct in its application of the ordinance and the inclusion of ‘trip-count’ standards to guarantee safety and ensure streets in the neighborhood remain passable.” [River Oaks Examiner; previously on Swamplot] Rendering: Buckhead Investment Partners
COMMENT OF THE DAY: CHIN UP, WEINGARTEN! “I don’t totally understand Weingarten’s defensiveness here. After all, they totally earned the wrath of people in the community who would like to see older, architecturally significant buildings preserved in some fashion when they tore down the north side of the shopping center at Shepherd and Gray. They made a calculation then that peoples’ upset feelings would not outweigh the financial benefit. Given this, why do they care what people think now? Did the negative publicity before actually hurt them in any material way? (I’ve made a point of not shopping at the new B&N even though I am a compulsive book-buyer, but I have no illusions that me and people like me have any impact on their bottom line.)” [RWB, commenting on Weingarten Exec Blames Those Alabama Theater Demolition Drawings on Staples]
Intrepid River Oaks Examiner reporter Michael Reed tries to get answers to that nagging question on the mind of every person who’s walked or driven by the vacant site of the former Wilshire Village Apartments on Dunlavy near West Alabama in the last month: What’s the deal with that little square of land in the back of the site that’s been taped off with a handwritten address sign?
Since the yellow tape was not in the shape of a fallen body, our first guess was the little cordoned-off area had something to do with some “truly odd†city code. . . . Perhaps it involved an obscure extremely minimum lot size ordinance, an idea we soon discarded because it almost made sense.
Carefully attuned to Wilshire Village’s well-documented vortex of absurdity, and being careful — professional journalist that he is — not to trespass on the site, Reed takes a photo of the city green tag on the sign while standing on the public sidewalk. Then, all David Hemmings-like, takes it home to enlarge it and read what it says:
COMMENT OF THE DAY: THE WILSHIRE VILLAGE CURSE “. . . I think we can officially call this site cursed as everyone who has anything to do with it seems to begin making insane decisions about what to do with it. A grocery store?? Really?!?” [mstark, commenting on H-E-B: Yes, We’re Buying the Wilshire Village Site]