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Houston19514

KBR Stays Downtown

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Really good news for downtown. KBR has decided NOT to consolidate into a new campus in West Houston, but will instead expand downtown. They expect to ultimately need 1.2 million square feet of office space downtown. That appears to be about 300,000 square feet more than they currently occupy downtown.

HBJ KBR story

Edited by Houston19514

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Yeah I saw this last night. This is good news. Why they would want to move way out to the middle nowhere is beyond me... Strike another one for Houston! :)

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Why they would want to move way out to the middle nowhere is beyond me...

Cheaper land and they can specify the building designs to meet their specific needs. Plus, ten to one the corporate officers live closer to the middle of nowhere than they do to Downtown. I bet the only reason they decided against it was due to the current cost of money making prohibitive the borrowing to build.

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I bet the only reason they decided against it was due to the current cost of money making prohibitive the borrowing to build.

Nah, that's not it. A big corporation with good credit could've made the deal happen in one form or another. And probably on good terms.

The reason they're staying in Class B space downtown is a simple matter of that they can renew a long term lease at ridiculously good rates right now because the owners of these buildings know that it'll be all but impossible (being undercut in a bad market by Class A competitors) to fill the space for years into the future if KBR leaves. KBR found themselves in an extremely powerful bargaining position and is merely exploiting it to the fullest.

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Yeah I saw this last night. This is good news. Why they would want to move way out to the middle nowhere is beyond me... Strike another one for Houston! :)

Do you ever post anything than even remotely make sense? Sure it's a good thing that KBR is remaining DT, but there are a plethora of reasons why the Katy Address could be positive and since they have already been mentioned here I won't bother explaining. Remember that even the morons that decided to live "in The middle of nowhere" (Katy) still view themselves as a a part of Houston and make it possible for the city to claim it's current metropolitan status, stadia support, retail support, among other accolades. In other words, most of us are on the same team. Grow up!

Edit: removed further, but needed insults.

Edited by Gary

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Didn't this development save the Clinton Drive facility? Or is KBR trying to get rid of it anyway?

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I know vacancy is higher than normal but that does not necessarily mean there is enough space in one building for their expansion, if that's what they want. Is there enough vacancy in one building that they would consider moving into or would someone have to build another building? I'm sure MainPlace is looking good to them.

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Didn't this development save the Clinton Drive facility? Or is KBR trying to get rid of it anyway?

KBR is consolidating the Clinton Drive campus jobs into their downtown towers.

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I know vacancy is higher than normal but that does not necessarily mean there is enough space in one building for their expansion, if that's what they want.

There isn't. They're expanding into two different Class B towers.

And they won't want to relocate into a shiny new building because they'll probably end up paying close to twice as much rent per square foot after taking into consideration that they can keep tenant improvement allowances low at their existing locations and bargain more effectively with their current landlord.

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Do you ever post anything than even remotely make sense? Sure it's a good thing that KBR is remaining DT, but there are a plethora of reasons why the Katy Address could be positive and since they have already been mentioned here I won't bother explaining. Remember that even the morons that decided to live "in The middle of nowhere" (Katy) still view themselves as a a part of Houston and make it possible for the city to claim it's current metropolitan status, stadia support, retail support, among other accolades. In other words, most of us are on the same team. Grow up!

Edit: removed further, but needed insults.

How about we move the stadiums to Katy so you guys can support it more fully and I can stop paying taxes to these dumb things.

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Will someone quote Gary for me please? I cannot see the content of his posts.

Edit: Ah never mind. I missed kylejack's post. Thanks! :)

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How about we move the stadiums to Katy so you guys can support it more fully and I can stop paying taxes to these dumb things.

Look, I am not a Katy booster, but am addressing how rediculous some of the attitudes are regarding DT or nothing. Houston is a sprawling city that is made up of many communities, that's just the way it is. Just because I live in Katy (actually am in the Houston ETJ) doesn't mean I don't support the Houston Stadia with my dollars. Do I pay taxes for those stadiums, etc, No, but that was not the reason I moved here. I still love Houston and consider myself a Houstonian, and support the city almost daily through my retail dollars. If the tax issue is a problem then you might talk with the city about it's decision not to annex the area where I live.

Again, My point was only to emphasize how goofy it is to have the DT or nothing attitude, especially in Houston.

Edit" Can't see anything in my response except for the first line.

Edited by Gary

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How about we move the stadiums to Katy so you guys can support it more fully and I can stop paying taxes to these dumb things.

How many cars do you rent and hotel room-nights do you book in Houston in an average year? The only other way you might be paying for any of "these dumb things" is if you actually attend an event at one of them.

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So BP is building a brand new suburban building for themselves and KBR won't? Is KBR poor?

Edited by N Judah

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So BP is building a brand new suburban building for themselves and KBR won't? Is KBR poor?

Relatively? Perhaps. I'm unsure. KBR made the best decision they could given their place in the marketplace, resources at their disposal, market outlook, and business strategy. Plus, I'm sure the terms of their leases are different than those for BP. But who knows?

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How many cars do you rent and hotel room-nights do you book in Houston in an average year? The only other way you might be paying for any of "these dumb things" is if you actually attend an event at one of them.

False. If the county sports authority defaults on their bonds, those are guaranteed by general funds from Harris County. And, um...it's entirely plausible that that happens in the near future. Also, if you happen to own property in TIRZ #15, tpart of the taxes that you'd otherwise pay to the City of Houston are redirected to the TIRZ, which is financing much of the subsidy for the Dynamo stadium.

Edited by TheNiche

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How many cars do you rent and hotel room-nights do you book in Houston in an average year? The only other way you might be paying for any of "these dumb things" is if you actually attend an event at one of them.

Promise to taxpayers on stadiums may be broken Bond crunch means public funds could be needed after all STADIUM: Former official calls for accounting of funds

Harris County may be forced to pay $4 million or more to the Harris County-Houston Sports Authority due to a cascading series of challenges initiated when $117 million in stadium bonds soured at the peak of the financial crisis last year. The payments indirectly could upend a promise to taxpayers that public money would not be spent on professional sports stadiums.

City, county and stadium authority officials have struggled to avoid that outcome for months as the due date for a balloon debt payment approaches in November.

The sports authority debt ran into trouble about a year ago when MBIA, a financial firm that insured the variable-rate bonds, was downgraded by investor analysts. The city recently experienced similar problems with about $182 million in variable-rate debt. It avoided heavy charges by using the county as an investor of last resort.

Sports authority officials insist they can resolve the problem without drastic steps, but analysts said that will mean walking a fine line.

Paul Bettencourt, former Harris County tax assessor-collector and a critic of the stadium deals, said the idea that the authority will be able to weather the crisis is "preposterous."

"This is a stunningly complex set of interlocking financial instruments, and the problem with any of these 30-year deals is that if you go in the hole early, you cannot get out," Bettencourt said. "It's time for the sports authority to recognize the obvious. Let's get an accounting of what it's really going to cost and take a serious look at shutting it down."

County Judge Ed Emmett said he remained hopeful the sports authority will get time from a major bank to resolve the matter.

Before the county has to contribute funds, he said, "there have got to be a lot of explanations as to why we're in this circumstance, including a lot of public statements … I'm not willing to just accept it."

Emmett expressed frustration that the problem was not created by a revenue shortfall, but by the failure of a third-party participant.

Investors fled from the variable-rate bonds - which represent about 10 percent of the authority's roughly $1 billion in debt sold to finance Reliant Stadium, Minute Maid Park and the Toyota Center - about a year ago when MBIA was downgraded in the heat of the financial downturn.

Bonds become loan

That made it necessary for JP Morgan Chase, the "liquidity provider," to buy the bonds and charge the authority 1 percent interest above prime, according to the financing developed for the stadium projects. JP Morgan's obligation to provide liquidity - essentially act as a temporary holder of the bonds - expires soon. At that point, the 30-year bonds will be converted to a loan that must be paid off in five years, requiring the sports authority to pay $12 million every six months. Emmett and Mayor Bill White were unable to persuade JP Morgan to hold off on requiring payment for a year.

The magnitude of that payment would trigger an obscure provision of the financing arrangement, requiring the county to pay $2 million every six months from parking fees collected at Reliant Stadium. The debt service on the bonds currently is paid from revenues generated by the hotel occupancy tax, motor vehicle rental fees, the Houston Livestock Show and Rodeo, the Houston Texans and other Reliant complex events.

Edwin Harrison, the county's director of financial services, said the county would not use property tax revenues to make the $2 million payments, but he acknowledged the possibility that property taxes may have to be used to cover the $4 million yearly budget gap.

http://www.chron.com/CDA/archives/archive.mpl?id=2009_4788193

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Nah, that's not it. A big corporation with good credit could've made the deal happen in one form or another. And probably on good terms.

The reason they're staying in Class B space downtown is a simple matter of that they can renew a long term lease at ridiculously good rates right now because the owners of these buildings know that it'll be all but impossible (being undercut in a bad market by Class A competitors) to fill the space for years into the future if KBR leaves. KBR found themselves in an extremely powerful bargaining position and is merely exploiting it to the fullest.

I agree Niche. In my search to launch a Texas themed restaurant / club downtown, I was directed to the Downtown Redevelopment Group, who were really agressive with incentives. The GHCVB is very active in these types of projects as well. Mine was a small scope plan, but I can see KBR getting courted heavily, including arm twisting, and ....pthhhh!...Golf!(Puke).

I think it's a good call for the city, as well as KBR. They really need to stay close to the convention center.

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What ever happened to the Brown and Root building out off of West Belt? The one with the weird silo looking things. I thought this location was supposed to be the eventual location of all the post Halliburton/Brown & Root merger remnants.

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False. If the county sports authority defaults on their bonds, those are guaranteed by general funds from Harris County. And, um...it's entirely plausible that that happens in the near future. Also, if you happen to own property in TIRZ #15, tpart of the taxes that you'd otherwise pay to the City of Houston are redirected to the TIRZ, which is financing much of the subsidy for the Dynamo stadium.

So let's all agree to reconvene when any of those things happen. In the meantime, the only "taxpayers" paying for stadia are those renting cars and hotel rooms, just as I said.

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Yes, I do rent cars in Houston, yes I do have a problem with paying taxes to enrich the billionaires that benefit from stadiums.

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Yes, I do rent cars in Houston, yes I do have a problem with paying taxes to enrich the billionaires that benefit from stadiums.

If you indeed have such a problem with "paying taxes to enrich the billionaires that benefit from stadiums" (as if they are the only ones to benefit), it is completely within your control to avoid paying those taxes. Don't rent any cars in Harris County. Simple as that.

(And for what it's worth, back to your original post on this topic, the people in Katy already support the stadia just as fully as you do...for most of Katy, their car rentals and hotel rooms are taxed to the very same extent as yours.)

Edited by Houston19514

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If you indeed have such a problem with "paying taxes to enrich the billionaires that benefit from stadiums" (as if they are the only ones to benefit), it is completely within your control to avoid paying those taxes. Don't rent any cars in Harris County. Simple as that.

Or we could just end the tax and the team owners can GFT.

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What ever happened to the Brown and Root building out off of West Belt? The one with the weird silo looking things. I thought this location was supposed to be the eventual location of all the post Halliburton/Brown & Root merger remnants.

AFAIK Halliburton owns that one.

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My sources tell me that KBR has exposure to a massive project in the middle east which has been delayed and/or severly reduced in scope due to market conditions. This is often a precursor to a cancellation. This project was in the 25-35 billion dollar range. This may have factored into the decision to stay in downtown. Why build a huge new campus in Katy when there is no work? This news is going to cost Houston hundreds of high paying jobs. It will probably affect the Energy Corridor more than downtown though.

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HBJ

Some buzz about the East End KBR site.

A tale of two KBR campuses

Plan for Clinton Drive stirs East End interest

KBR Inc.’s decision to cancel a West Houston campus and consolidate downtown was the real estate buzz last week. This week, the buzz is about a huge existing inner-city campus KBR will vacate when the company consolidates in the Central Business District. The 138-acre Clinton Drive campus is generally regarded as the largest redevelopment site in close proximity to the downtown area of any major U.S. city. The property just east of downtown is bounded by Clinton on the north, extends to Hirsch on the east, spreads to Buffalo Bayou on the south, and stretches almost to Jensen on the west.

The giant engineering and construction company with a total of 3,552 Houston employees is not marketing the property for sale just yet. First KBR will merge the 1,600 employees who work at Clinton Drive with their counterparts downtown. Meanwhile, the company will be conducting an environmental clean-up of the site. Redevelopment may be years away, but anticipation is running high. “It could be a wonderful master-planned residential and commercial development,” says Micheal Palmer, a board member of the Houston East End Chamber of Commerce. He points out that the waterfront site is close to major roadways, has great views of downtown and provides quick access to entertainment and cultural venues. Palmer, a real estate broker with Studley Inc., says land prices in the area have fluctuated from $4 to $13 per square foot over the past five years — making KBR’s site worth anywhere from $24 million to $79 million. He notes that residential development in the area is on hold, which has caused land prices to drop to an unknown level from their peak in 2008. “There are no significant recent sales to point to exact pricing,” Palmer says. “The size of the KBR tract would necessarily suggest a lower value, particularly in light of the change in values related to the former Astroworld site and Union Pacific Hardy Rail Yard.”

Alan Atkinson of AVA Ltd., owner of the Americas Plaza mixed-use development near KBR’s site, puts the potential in broader perspective. Atkinson says the Clinton Drive tract is superior in size to the urban waterfront redevelopment projects touted in national real estate publications, which typically range from 20 to 40 acres. He adds that the portion of Buffalo Bayou east of downtown has cleaner water and is wider and deeper than in other areas of town because of its unique history. The bayou was dredged all the way into downtown to allow ships to navigate to Main Street during the city’s infancy. “Its location on the former Ship Channel, Houston’s largest waterway, is a remarkable development opportunity,” Atkinson says.

Real estate developers such as Frank Liu of Lovett Homes and Ernie Cockrell of Pinto Realty Partners have been acquiring land in the area for the past few years for future projects. Cockrell says the area is definitely on track for redevelopment. Pinto Realty controls an undisclosed amount of land in the area, but is not expected to act as developer on the tracts. “Our focus is buying outdated industrial land and changing its use,” Cockrell says. “Most likely we would either sell or joint venture.”

Reid Wilson, chair of the Urban Land Institute’s Houston District Council, reports positive results from a recent East End bus tour. Wilson say participants were impressed with conditions of the roadways, buildings and atmosphere. “It’s not scary looking,” he says. “There weren’t scary people hanging around.” Adds Wilson: “We went over there and we dispelled a lot of myths.”

Cleaning up CONTAmInANTS

It will be months before the Clinton Drive employees begin moving downtown. The company must conduct space planning and the new square footage must be renovated before the move. KBR is also working on the environmental clean-up of the 4100 Clinton site, with buildings constructed in the 1970s. The site also has some warehouse space that is either vacant or used as storage. Certain contaminants are present on Clinton Drive as a result of more than 100 years of industrial activity dating back to military operations in the early 1900s, KBR reports. Over the last century the site has been used for painting, sand blasting, auto and equipment fueling stations and heavy equipment maintenance. KBR data shows that chemicals found on the site include metals, trace concentrations of volatile organic compounds and gasoline constituents.

KBR — which spun off from oil services giant Halliburton Co. in 2007 — joined the Texas Commission on Environmental Quality Voluntary Cleanup Program in 2004 to enable future redevelopment of the site.

Klaudia Brace, senior vice president in administration, says KBR intends to complete the mitigation process before moving forward.

“It’s ongoing work,” Brace says. “For any future plans that we have, we need to make sure everything is environmentally sound.”

692801-0-0-1.jpg

Edited by 'Strosfan

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Palmer, a real estate broker with Studley Inc...

And here I thought I was the only employee....

Oh well, at least I still have my night jobs at Hunk Co and Strapping, LLC.

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HBJ

Alan Atkinson of AVA Ltd., owner of the Americas Plaza mixed-use development near KBR’s site, puts the potential in broader perspective. Atkinson says the Clinton Drive tract is superior in size to the urban waterfront redevelopment projects touted in national real estate publications, which typically range from 20 to 40 acres. He adds that the portion of Buffalo Bayou east of downtown has cleaner water and is wider and deeper than in other areas of town because of its unique history. The bayou was dredged all the way into downtown to allow ships to navigate to Main Street during the city’s infancy. “Its location on the former Ship Channel, Houston’s largest waterway, is a remarkable development opportunity,” Atkinson says.

692801-0-0-1.jpg

This was a very interesting part of the article to me. I have long thought that if we made the ability to bring yachts and docking them in downtown more attractive that it might help in procuring more superbowl events to the city. Being able to dock yachts downtown, the amenities of the area, and light rail connecting downtown to Reliant I believe might strengthen the appeal of Houston in the selection process. Miami sure seems to get a lot of superbowls and the NFL owners love to be able to show up on their yachts...

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Nah, that's not it. A big corporation with good credit could've made the deal happen in one form or another. And probably on good terms.

The reason they're staying in Class B space downtown is a simple matter of that they can renew a long term lease at ridiculously good rates right now because the owners of these buildings know that it'll be all but impossible (being undercut in a bad market by Class A competitors) to fill the space for years into the future if KBR leaves. KBR found themselves in an extremely powerful bargaining position and is merely exploiting it to the fullest.

this.

although class A space downtown has remained relatively tight despite the economy, class B has taken it on the chin. odds are brookfield bent over backwards to keep KBR in place and it ultimately ended up being too good a deal to pass up.

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I know vacancy is higher than normal but that does not necessarily mean there is enough space in one building for their expansion, if that's what they want. Is there enough vacancy in one building that they would consider moving into or would someone have to build another building? I'm sure MainPlace is looking good to them.

mainplace is most definitely not looking good to them, i assure you that much. the delta between what they'll be paying with a renewal/expansion and what they would get at mainplace (even with a significant discount from hines) would be huge. apples to oranges.

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mainplace is most definitely not looking good to them, i assure you that much. the delta between what they'll be paying with a renewal/expansion and what they would get at mainplace (even with a significant discount from hines) would be huge. apples to oranges.

With regard to mainplace, I kind of think one of the main differences is the image,appeal, and prestige associated to a certain extent of being a tenant located in a Hnz property over other office buildings, especially one that looks like its going to be a real show stopper from an image standpoint...For example, Williams Twr is a great example of a building with perhaps similar allure. They really know how to come out of the ground with awesome looking buildings...

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Although I'm sure everyone has already heard about the news, I don't think I've seen anyone post about KBRs announcement of the sale of the property

http://www.chron.com/business/article/Major-East-End-parcel-up-for-grabs-3643074.php

Granted the site has a lot of potential, how long until a developer thinks the potential should be realized? I mean, if Regent Square can't take off, what makes us think this can on the scale most people want it to?

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Bigger than Astroworld property huh?

how about a theme park on the bayou.

whatever happens, i hope it's not just more town homes.

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Bigger than Astroworld property huh?

how about a theme park on the bayou.

whatever happens, i hope it's not just more town homes.

Ah... a theme park... now that would rock! We would not have to drive 2723yfrfv8s6af w3t35 miles to drive to teh woodlands or 1960 or wherever the heck in the middle of nowhere to get to a theme park. :)

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