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tangledwoods

New Chevron Tower for Downtown Houston - 58 stories at 1600 Louisiana

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http://www.bizjournals.com/houston/news/2015/07/28/chevron-axes-houston-jobs.html

The article says "as early as next year".

As others have stated, there's no way this tower is happening anytime soon.

 

 

Of course the article says that. Again, that was in March when things were looking better. It looked like the price was improving then. Am I the only person following the staggering amount of supply? Texas is going to hit record production this year since the 70s and the demand just still isn't there. The global economy just doesn't need this amount of supply right now so the price is obviously going to go lower, thus affecting the oil industry more in this city.

 

Are lay offs and budgets cuts not obvious that this tower will not be built even close to a year from now? I still think this tower will get built but I think this forum needs to start getting more realistic. Months ago people on this forum criticized swtsig, me and others when we said it's obvious that these projects are going to get delayed. What do we see more often now? Delay after delay, with very few starts compared to 2013 and 2014. We'll still see new projects but nothing close to the rate we saw those years.

 

I'm sorry for sounding so negative. I love this city and it's future is so bright.... but I truly believe we need to be realistic here.

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It may be a sign that the HQ may move. That'd save money and may even be a reason to expand here. Perhaps not with this tower...but you have to think that this is now a more realistic possibility.

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Of course the article says that. Again, that was in March when things were looking better. It looked like the price was improving then. Am I the only person following the staggering amount of supply? Texas is going to hit record production this year since the 70s and the demand just still isn't there. The global economy just doesn't need this amount of supply right now so the price is obviously going to go lower, thus affecting the oil industry more in this city.

Are lay offs and budgets cuts not obvious that this tower will not be built even close to a year from now? I still think this tower will get built but I think this forum needs to start getting more realistic. Months ago people on this forum criticized swtsig, me and others when we said it's obvious that these projects are going to get delayed. What do we see more often now? Delay after delay, with very few starts compared to 2013 and 2014. We'll still see new projects but nothing close to the rate we saw those years.

I'm sorry for sounding so negative. I love this city and it's future is so bright.... but I truly believe we need to be realistic here.

Triton, I value your contributions to this site as much as swtsig. So let me ask you this. Would constructing this tower during the price slump, and lowered construction costs (future), not be beneficial and make more sense in the long run? I know entire industries exist off of the big oil companies. Leasing space, leasing equipment, leasing land, even leasing head counts.

What kind of numbers are we looking at? What is the current price of the space leased versus the price of owning the building? How long is the lease for? Do these companies experience less overall costs when renting? Are those savings short term or long term? Would building this tower after the market has cooled be more cost effective than renting space in an inflated, and deflated market?

Does Chevron plan to move all operations out of California and into Texas (we may not know for a while), but how much less taxes/expenses are they paying here than on the west coast? Do those numbers factor in building a new skyscraper to accommodate the necessary office space?

I know you may not have the direct answer to all, if any of those questions... But know that my curiosity comes from wanting to know facts rather than a dreamt up fantasy of wanting a shiny new tower, and short term oil prices.

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Iranian production will be coming to the market soon with a lift of sanctions. The Saudis show no sign of slowing their oil production (and probably wouldn't want to benefit the Iranians anyways).

The HQ move has been often discussed, but current leadership at Chevron has shown no desire to move from San Ramon. With profits falling and shareholders unhappy, Chevron leadership would have a harder time justifying this project right now. Two or three years from now we might see higher prices again (hopefully in response to more robust demand). And we also just might get new decisionmakers at the top of Chevron who might be more amenable to dumping the Bay Area.

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Triton, I value your contributions to this site as much as swtsig. So let me ask you this. Would constructing this tower during the price slump, and lowered construction costs (future), not be beneficial and make more sense in the long run? I know entire industries exist off of the big oil companies. Leasing space, leasing equipment, leasing land, even leasing head counts.

What kind of numbers are we looking at? What is the current price of the space leased versus the price of owning the building? How long is the lease for? Do these companies experience less overall costs when renting? Are those savings short term or long term? Would building this tower after the market has cooled be more cost effective than renting space in an inflated, and deflated market?

Does Chevron plan to move all operations out of California and into Texas (we may not know for a while), but how much less taxes/expenses are they paying here than on the west coast? Do those numbers factor in building a new skyscraper to accommodate the necessary office space?

I know you may not have the direct answer to all, if any of those questions... But know that my curiosity comes from wanting to know facts rather than a dreamt up fantasy of wanting a shiny new tower, and short term oil prices.

 

You raise good points. There's so many factors into what the company's next move is. Let me just say this... it doesn't make sense for them to spend billions of dollars when they are trying to save billions of dollars. Companies are like people... do most people spend a significant amount of money when there's a slump or do they wait it out until the market improves? Perhaps that all depends on how much Chevron is willing to risk in building it sooner. But anyway, the writing on the wall cannot be any clearer. Chevron was hoping the market would improve, it didn't. It had to make a tough decision and it laid off hundreds of contractors, regular employees, etc. Montrose1100, I would be absolutely glad if I was wrong and this tower started early next year. But we're talking about massive budget cuts here... there's no room for a multi-billion dollar tower.

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The decision to build or delay this tower will occur in the summer of 2016. It has been that way since early 2015 after 6 months of sliding oil prices. Some can hope for the best and others can think the worst but the decision regardless won't be made for almost a year from now.

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http://fuelfix.com/blog/2015/07/28/chevron-to-cut-1500-jobs-including-almost-1000-in-houston/#34195101=0

 

Chevron to cut 950 jobs in Houston, 1,500 companywide

 

Chevron previously had nixed employee growth plans for Houston and halted plans in late 2013 to build a 50-story downtown office tower. Chevron had previously said the tower was being delayed until at least 2016.

 

“Chevron does not anticipate final approvals for a new office building in Houston in the near term,” Ritchie added. “We remain committed to the new building, however we continue to exercise strong capital discipline when assessing and prioritizing investments.

 

Edited by DrLan34

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How about we just wait for 12 months, see what the health of the oil industry is and stop speculating on something we have almost no real knowledge over. 

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I think we should step back a bit and remember that the delay of this tower started December 2013, in the midst of a very strong oil market.

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We have to have patience.

 

I think the latest boom we had kind of spoiled us.

 

 

Back in 2013/2014, we were getting wind of new projects nearly every week. We were checking the downtown development maps for something new every month. Was the boom we saw in the late 70s to early 80s even like that? (Question to older HAIFers). I'll say the samething I said late last year when oil was dropping.... I still think a lot of these projects will move forward, just on a slower time frame.

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I know everyone realizes that since the late 70's early 80's boom we have developed the galleria uptown, The Woodlands, and the energy

corridor, not to mention many other areas like Westchase and greens point. All of this construction is so widespread it doesn't seem

like the boom that mostly occurred downtown back in the last big boom.

Just imagine if Houston wasn't so spread out and you put all of that office construction into downtown.

Think about what that would look like.

The med center and Downtown would more than likely be continuous with Herman Park in the middle.

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I think the latest boom we had kind of spoiled us.

Back in 2013/2014, we were getting wind of new projects nearly every week. We were checking the downtown development maps for something new every month. Was the boom we saw in the late 70s to early 80s even like that? (Question to older HAIFers). I'll say the samething I said late last year when oil was dropping.... I still think a lot of these projects will move forward, just on a slower time frame.

I bet it was. I think that time still stands as the biggest boom for downtown. It wasn't as easy then to hear/see or gain access to plans as it is today, but I'm sure just seeing so many large buildings going up was very exciting. Below is two maps of what was proposed during the 80's. Just as much, if not more was in development -- but much larger, and mostly office space. Many projects listed that most never heard of before.

81Map.jpg

82Map.jpg

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80 million square feet in that boom, we had up to 17 million square feet under construction at the height this time, over 3-5 years maybe it did approach the 80, plus much is multifamily not 100 percent office anymore.

I read recently that the total Houston area office construction 2010-2016 was 27 million SF, as compared with 80 million in the 80's. Go downtown and look at the buildings that went up then. We are standing on the shoulders of giants.

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I don't believe the article says all the cuts will be downtown. It would make a lot of sense for them to try to consolidate smaller locations around the city into their larger buildings. That's what we're doing. We've already cut two buildings, not only do we reduce payroll, we also reduce real estate costs significantly.

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I don't believe the article says all the cuts will be downtown. It would make a lot of sense for them to try to consolidate smaller locations around the city into their larger buildings. That's what we're doing. We've already cut two buildings, not only do we reduce payroll, we also reduce real estate costs significantly.

Not all downtown. Most not downtown actually.

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No doubt this is dead. What will be interesting is to look back at this thread years from now and see how the development changed if something goes up years from now. It may have missed this boom but it *may* resurrect in the future. The same for Capitol Tower and International Tower.

It's not always the case but look at 609 Main site. 10 years ago, that was the failed Shamrock Tower. It may have took 10 years but the city got something better in the end thankfully.

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No doubt this is dead. What will be interesting is to look back at this thread years from now and see how the development changed if something goes up years from now. It may have missed this boom but it *may* resurrect in the future. The same for Capitol Tower and International Tower.

It's not always the case but look at 609 Main site. 10 years ago, that was the failed Shamrock Tower. It may have took 10 years but the city got something better in the end thankfully.

Capital tower is not dead. They are pouring the foundation are in lease discussions.

Not a good idea to speculate.

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Capitol Tower is a whole different type of critter, in part because Skanska is an integrated operation, and in part because of its location.  Also, while there certainly are a lot of cranes downtown, there isn't really that much office space being built - it's mostly residential.  The only two big ones that are going up now are 1111 Travis, which Hilcorp is building for itself, and 609 Main.  Of the other four commercial sites announced but yet to start on the July map, Chevron is toast for the time being, as is 6 Houston (again), and 800 Bell is going to take a very special type of anchor tenant because of its distance from pretty much everything except Chevron, residential, and the remnants of the Parking District... leaving Capitol Tower. 

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Capital tower is not dead. They are pouring the foundation are in lease discussions.

Not a good idea to speculate.

Wasn't speculating - just didn't know they were in discussions with anyone.

I'm honestly rooting for it as it cuts off my tunnel access to Chase Tower.

Edited by tigereye
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No way this project is getting out of the ground by then. Oil prices aren't expected to recover in 2016 and even if they DID, they're not going to move dirt the moment oil tops $70 or $80 a barrel. I suspect this project is either DOA or still 5+ years away and will likely be reduced in size. I'm talking out my a $ $ currently, I admit, but I suspect that's what will happen.

Edited by wxman
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No way this project is getting out of the ground by then. Oil prices aren't expected to recover in 2016 and even if they DID, they're not going to move dirt the moment oil tops $70 or $80 a barrel. I suspect this project is either DOA or still 5+ years away and will likely be reduced in size. I'm talking out my a $ $ currently, I admit, but I suspect that's what will happen.

I mean, they did submit the extension June 29, 2015. Maybe you're right but it just caught my eye.

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No way this project is getting out of the ground by then. Oil prices aren't expected to recover in 2016 and even if they DID, they're not going to move dirt the moment oil tops $70 or $80 a barrel. I suspect this project is either DOA or still 5+ years away and will likely be reduced in size. I'm talking out my a $ $ currently, I admit, but I suspect that's what will happen.

 

 

I mean, they did submit the extension June 29, 2015. Maybe you're right but it just caught my eye.

 

As H-TownChris2 suggested, it seems pretty obvious that the project is not DOA.  If it were DOA, they would not be wasting their time filing for extensions with the FAA.  Also noteworthy:  they are only allowed one extension.  If they don't start construction by September 2016, they will have to start over with the FAA.

Edited by Houston19514
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My guess is that Chevron saw the cheap oil days coming. Cheap oil means increased downstream opportunities. Chevron builds new refineries to capitalize on cheap oil and gas (temporarily redirecting capital spending). Hence, delay in non-income producing sunk cost projects.

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I like the current park.  Chevron keeps it nicely mowed, and they haven't put up any signs (that I've seen) to keep off the grass

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EDITED

At the risk of being warned for feeding the trolls, all of these projects were financed before the oil slump, whether there was dirt moved or not is irrelevant.

Sure a few projects will get off the ground moving forward, but the rich tend to stay and continue getter more rich regardless of the economy. That and along with foreign investors buying and funding condos left and right.

The developments that "got off the ground" after the prices sank were already years in the pipeline.

I know about this process as much as you, but I've been paying attention to what those who do know have had to say.

If Chevron moves forward with this tower, it would likely be completed when prices are better. They could also take advantage of cheaper construction prices as more and more buildings get completed and no longer need crews.

Chevron bought the YMCA years ago. They will plan something here eventually.

Edited by Montrose1100
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tumblr_o36xu2wQdF1rolcooo1_540.jpg

 

 

To compare with the HSPVA site. If you don't have a ready to go plan yet, at least make it clean and neat.

 

Which is what we are likely to see for a few more years yet.  

 

Nice lawn.  :ph34r:

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