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Question For All HAIF Experts


ToryGattis

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Does anybody know the story behind the abandoned mid-rise(s) in Midtown bounded by Gray-Travis-Webster-Milam? History? Who used to be in there? When did it close down? Owner? Plans? Any obstacles to renovation or tear-down? (asbestos? something else?) Current state of the building inside?

Part of the reason I ask: there's been some buzz in the Houston entrepreneurship community about needing a more concentrated district of startups, and I think that building could be an interesting opportunity, especially since it has a giant parking garage and is just 3 blocks from the Houston Technology Center and the walkable Bagby-Gray area, not to mention on the LRT to Rice, TMC, and eventually UH. Wouldn't have to be a complete redevelopment - maybe, to start, just fixing up a floor or two to be usable, climate controlled open-plan low-cost/retro office/co-working/incubator space.

Insights appreciated.

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The main hold up is they have yet to green-light Ocean's 14. When they do I'm sure this building will fulfill its best and highest use as an imploding Mid-century Vegas casino.

The building has some issues, however rumour has it that there is a few bottles of Louis XVIII stashed somewhere in the building so it may be worth a site visit. Just watch out for the occasional hole in the deteriorating floor...

Edited by TGM
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Another thought: The hot thing in Silicon Valley is shared houses with techies doing startups - sort of a live-in incubator/co-working space. Here, Rice forces ~1,000 undergrads (and all the grad students) to live off campus every year because of a lack of on-campus dorm space. What if that Central Square building (or another) was converted into a mix of small apartments and shared living areas aimed at Rice students plus co-working/incubator/office space open to anyone? I think it would be incredibly popular, and win-win both for the students and the startups to be exposed to each other. Something along the light rail line would be ideal for easy back-and-forth to campus. The old Days Inn/Holiday Inn tower would be another option. I think it could be a pretty amazing entrepreneurial environment...

Edited by ToryGattis
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The ideas are great, the reality of putting them into place is not. Asbestos abatement and subsequent liability are the major deal killers. I think the building is pretty swanky, and would love to see a mid-century mod office-plex. All that is needed is to convince the owner to come down $12 mil and the gov to grant a 30 year tax waiver.

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If there's any single impediment to the redevelopment or tearing down of this structure, it is the current owner's unwillingness to accept reasonable offers. To his credit, I'd suppose that asshole property owners are par for the course up in Bronxville, NY. Then there's the asbestos and the physical condition; every building system requires major repair. But those things are curable, and in the grand scheme of things this building isn't in as bad a shape as some of the other abandoned highrises.

The biggest obstacle is that the floorplans are bizarre, narrow in some places and deep in others, resulting in a high ratio of common area to rentable area. Views to the east, south, and west are encumbered by massive concrete walls and the building's parking garage. When natural sunlight is at a premium inside of a highrise, then there's limited aesthetic benefit of it even being a highrise.

At one point in time, Morris Architects had gotten very far along in planning to make this their corporate headquarters. They would've modified portions of the structure in ways that cured the incurable. The plans were really something to behold. But again...the building owner was reticent to accept a reasonable offer. Morris leased space in First City Tower instead.

To address the issue of the building's highest and best use, I agree that some kind of specialized use would probably be best. (I'd like to see a second design center, like exists off of Woodway, but with the Cork Club restored on top.) I'm hesitant to endorse the idea of it being dormitories because to the extent that Rice or UH are going to build new dorms, it should be on their campuses. Business incubator space seems like an interesting idea, and if students want to start a business in such a facility, then they should be welcomed to; but the focus should not be on students.

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The biggest obstacle is that the floorplans are bizarre, narrow in some places and deep in others, resulting in a high ratio of common area to rentable area.

This would actually be a feature for the co-working space. Also shared common areas for any dorms/apartments.

To address the issue of the building's highest and best use, I agree that some kind of specialized use would probably be best. (I'd like to see a second design center, like exists off of Woodway, but with the Cork Club restored on top.) I'm hesitant to endorse the idea of it being dormitories because to the extent that Rice or UH are going to build new dorms, it should be on their campuses. Business incubator space seems like an interesting idea, and if students want to start a business in such a facility, then they should be welcomed to; but the focus should not be on students.

I think that makes sense about the Universities putting dorms on their own campuses first. But there are master campus plan issues - is the highest-best use of campus space for dorms or academic buildings? Rice chose to put its Grad House off campus and run a shuttle bus. Rice also has a bit of a different model for undergrads because of the college system (think on-campus co-ed fraternities with cafeterias that everybody gets assigned to - no rush). Assuming it hasn't changed since the 90s, the model has always been to assign about 1/4 to 1/3 more students to a college than it can hold at any one time, forcing some students off campus, usually for just one of their years (and some want to be off campus). So, bottom line, as long as Rice keeps that model, no matter how many dorms they build, around 25% of the undergrads will be off campus in any given year. Any new dorms will go to overall student body growth, not increasing the percentage on-campus.

As far as UH goes, no matter how many dorms they build, the majority of students will almost certainly always be off campus.

In Austin, there seem to be apartment complexes that specialize in UT students, including matching up roommates in multi-bedroom units and offering leases based on the academic year (I think). This might be something like that too. I wonder if the old Days Inn/Holiday Inn would be a particularly good fit for that model? It wouldn't require as extensive a remodeling if a kitchen weren't required in each unit, instead having a common kitchen on each floor (my dorm at Rice was like this). And most students would be perfectly happy with an efficiency unit the size of a hotel room.

Part of the reason for mixing the residential and incubator space is simply that these buildings are far too large to fill with startups in any reasonable time frame. The residential can also create a predictable baseline of rent revenue to support the building, and subsidize the incubator space. I also think there's a great talent match there too if students are chosen for an interest in entrepreneurship and technology. Some will start their own tech startups, of course, but I think most startups are founded by older professionals. They would love to have access to very affordable or equity-compensated talent in the early days when funding is tight - and students (or recent graduates) are a perfect fit for that. Like I said, it could be a very fertile entrepreneurial environment.

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I'm just dying to see what other MCM stuff is inside. Maybe I should get Redscare on retainer just in case.... Anyone up for a site visit?

The photo you just linked to of the MCM bannister was one that I took about five years ago. It is the awesomest thing about the entire building, hands down. (I was there with permission, btw. The building isn't worth a breaking and entry charge.)

This would actually be a feature for the co-working space. Also shared common areas for any dorms/apartments.

You know a lot more about dorm life, business incubation, and hip things like that than I do. I only know about this building and real estate development and being a business owner and being a student. I'm not with it at all. So I'll defer to you on what's cool. You obviously know better than I.

Rice chose to put its Grad House off campus and run a shuttle bus. Rice also has a bit of a different model for undergrads because of the college system (think on-campus co-ed fraternities with cafeterias that everybody gets assigned to - no rush). Assuming it hasn't changed since the 90s, the model has always been to assign about 1/4 to 1/3 more students to a college than it can hold at any one time, forcing some students off campus, usually for just one of their years (and some want to be off campus). So, bottom line, as long as Rice keeps that model, no matter how many dorms they build, around 25% of the undergrads will be off campus in any given year. Any new dorms will go to overall student body growth, not increasing the percentage on-campus.

As far as UH goes, no matter how many dorms they build, the majority of students will almost certainly always be off campus.

The Rice Graduate Apartments are within walking distance of the campus and also connected by shuttles, just like many of UH's dorms. This system makes sense to me as a mechanism to balance cost, the student experience, and the potential for growth of both the student body and the academic facilities. Placing dorms miles apart from the campus and in a completely different neighborhood with a completely different character seems nonsensical to me unless they're going for some kind of satellite campus or research annex.

[bite my tongue!]

Sorry, I keep forgetting that you're the expert.

In Austin, there seem to be apartment complexes that specialize in UT students, including matching up roommates in multi-bedroom units and offering leases based on the academic year (I think). This might be something like that too. I wonder if the old Days Inn/Holiday Inn would be a particularly good fit for that model? It wouldn't require as extensive a remodeling if a kitchen weren't required in each unit, instead having a common kitchen on each floor (my dorm at Rice was like this). And most students would be perfectly happy with an efficiency unit the size of a hotel room.

The apartment complexes in Austin that you're talking about--I've secretly-shopped most of them--they're appealing to a small proportion of UT students. Whose numbers are greater. Who reside in a smaller city. Who aren't as geographically dispersed within that smaller city. Who received more scholarships. Who came from higher-earning families. Whose parents gave a damn, worked the system for their kids, and saved for their kids' college funds. Who were by-and-large in the top 10% of their high school graduating class, who bumped peons like myself into second- and third-tier institutions, most of them in their hometown and close to family.

The demographics are different, and so the apartment market dynamics are too. An apartment operator that has a lot of small spaces in Houston's downtown or midtown area should concentrate their efforts on young professionals, recent college graduates. It should operate like an upscale for-profit co-ed frat house...and if they want to get creative, then they might very well should be marketing heavily in Austin, because that's where the UT grad will move into when the UT grad figures out that Austin has a crappy labor market.

Part of the reason for mixing the residential and incubator space is simply that these buildings are far too large to fill with startups in any reasonable time frame. The residential can also create a predictable baseline of rent revenue to support the building, and subsidize the incubator space. I also think there's a great talent match there too if students are chosen for an interest in entrepreneurship and technology. Some will start their own tech startups, of course, but I think most startups are founded by older professionals. They would love to have access to very affordable or equity-compensated talent in the early days when funding is tight - and students (or recent graduates) are a perfect fit for that. Like I said, it could be a very fertile entrepreneurial environment.

Cheap talent can catch the bus.

When I was at UH and talking with a future business partner about starting a creative business...which we ended up actually getting bank financing and doing (regrettably), our incubator was One's A Meal on West Gray. We just drove there and talked and ate and drank coffee. It wasn't very close to where either of us lived, but it was open 24 hours without being a Denny's and wasn't too expensive. In general, Houston isn't expensive. It's wonderful like that. Poor people own cars and drive them, and they rent what they need because the rent is affordable. Maybe we're so inexpensive that we don't need incubators like they have in Silicon Valley. Maybe we're so engineering-heavy and devoid of coastal venture capital, that we don't want it either...except as some sort of a fashion statement.

[bite my tongue!]

Sorry, I keep forgetting that you're the expert.

Well, anyway. Just a thought...but, you might check into Boxer Property's business model. They basically serve the need for business incubation in Houston such as I perceive it to exist.

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[bite my tongue!]

Sorry, I keep forgetting that you're the expert.

Not necessary. Definitely not an expert. Just an idea for discussion. And I appreciate your points/thoughts. I do agree with you that mixing in young professionals that are recent college graduates is a good idea. I also agree with your last points about Houston, and those are a definite advantage, but it doesn't create the serendipitous connections that people need in the entrepreneurial world. This kind of building could spark those.

FYI, the Facebook discussion on this topic is here: http://www.facebook.com/groups/houstonstartups/permalink/349925645091586/

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I don't want to talk about this on Facebook. Facebook sucks. I'm going to talk about it here.

Tell me more about the necessity of serendipitous connections. And tell me how an individual or a building might contrive them. I do not understand.

The Facebook conversation was just for context/background. Not trying to move the conversation.

Serendipity: large open shared work areas and common areas. People mingle. Talk. Ideas meet people who can help implement them. Ideas spark off each other. Technical experts combine their knowledge to work on a problem. Teams self-organize. It's a community. More at the Wikipedia article on coworking.

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So, pretty much artists' studios wherein art is broadly defined to include any variety of creative professional. Sounds good. Someone should develop some of those. It might work as a component in a redeveloped Central Square Building, but such an endeavor could be put in many different structures. Is this the best structure for such an endeavor, or are we only desperately seeking a means to back-fill an obsolete structure?

Edited by TheNiche
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So, pretty much artists' studios wherein art is broadly defined to include any variety of creative professional. Sounds good. Someone should develop some of those. It might work as a component in a redeveloped Central Square Building, but such an endeavor could be put in many different structures. Is this the best structure for such an endeavor, or are we only desperately seeking a means to back-fill an obsolete structure?

I'm running on the assumption that renovating an old abandoned structure is much cheaper than new, keeping costs and rents down.

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I'm running on the assumption that renovating an old abandoned structure is much cheaper than new, keeping costs and rents down.

It depends partly on the extent of repairs that are necessary. Also, if you wouldn't build it the way that it's currently configured in the first place, then there will either be some rent loss or additional operating expenses that reflect functional obsolescence. Sometimes that is curable, other times not.

Other considerations in the outcome of buildings like these that can determine whether they're saved or demolished will be the price of underlying dirt, its configuration, and demolition cost of the structure. So for instance, if it's a tall building on a small parcel of land that is six inches away from another structure, then it probably won't get torn down because the cost of doing so would be prohibitive. (There are exceptions, of course.)

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I'm running on the assumption that renovating an old abandoned structure is much cheaper than new, keeping costs and rents down.

I guess that would depend on how much renovation is going to take place. If it does have asbestos then there is no getting around either containing or removing it. I have no idea what that costs these days.

The other thing to consider is how much $$$ will you have to sink to renovate to meet the minimum standard that is necessary to attract the desired (or any) clientele? The knowledge based businesses that you want to attract want to know all about Eco and sustainable practices, Leed certifications, all that stuff. However the reality is that if it looks like the inside of High Fashion Home, and it's cheap they may just go for it.

If you're on fire about this then start talking to various academic, governmental, quasi-governmental, and private sector benefactors about making it happen.

Step 1 is getting some sort of academic involvement and $$$. (UH small business, bio-med, nano-tech, etc)

Step 2 is finding away to make the purchase more affordable.

A. Get the guy to lower the price enough to make it worth it.

B. Receive some sort of tax break, matching dollars, assistance, grants, EPA funds, whatever to

offset any mandatory cleanup requirements.

Step 3 is proper project execution, controlling costs, managing unforseens, etc.

Step 4 is run in parallel from the beginning and is all about generating significant buzz and interest in the project that turn into signed leases. Media campaigns, fund raisers, startup spotlights, and plenty of open-bar mixers.

Step 5 is swearing that you won't do this again while looking for the next project.

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Just be sure to wear proper protective equipment, air filtration respirator, have a gas monitor on hand for utility areas and below grade, proper lighting etc...

/Safety rant sorry

No doubt. I'm also thinking of bringing an AR15, garlic necklace, wooden stakes, can of Vienna Sausages, and a BASE jumping 'chute just in case. Heck, you never know if you're going to run into Colonel Kurtz or something.

Edited by TGM
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