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Founders District/The Cannon Mixed-Use At Beltway 8 & I-10


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https://www.houstonchronicle.com/techburger/article/Houston-City-Council-approves-6M-tax-break-for-14898611.php

 



Houston City Council on Wednesday approved a $6 million tax break for the Founders District, a live-work-play entrepreneurial community being built in west Houston.

 

The Founders District is a roughly $150 million project that will sit on 32 acres near the intersection of I-10 and Beltway 8. The proposed development includes 180,000 square feet of modern office space, 60,000 square feet of coworking space, 180,000 square feet of restaurants, retail and commercial space, a community events center and apartment units, according to the City Council agenda.

 

The Founders District is expected to hire at least 105 employees by 2020, and it will hire and retain 404 employees by 2023, according to the City Council agenda. And as part of the tax abatement agreement approved Wednesday, the Founders District has committed to providing 20 percent of its residential units for workforce/affordable housing. It has also committed to collaborating with Houston Community College, Spring Branch Independent School District and Lone Star College.

 

City Council on Wednesday first created a tax abatement reinvestment zone for the Founders District and then approved a tax abatement agreement. The agreement approved a 90 percent abatement rate, which is estimated to result in $6 million over a 10-year period.

 

The Founders District is being funded by Mark Toon, co-founder of Houston venture capital firm Work America Capital, which invested in the Cannon, as well as by some of Toon’s business partners.

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It's outrageous that this development gets a 90% tax abatement for basically providing market rate office facilities in a city that has a 20% + office vacancy rate downtown and nearby in the Energy Corridor.  If this project couldn't make it without a subsidy from you and me, Joe Taxpayer, then it shouldn't get built.  By giving it a tax advantage it hurts the ability of existing owners of taxable property to fill their buildings, which in turn results in  their lower tax valuation, thus a double whammy to the tax base.  Follow the money......how many of those elected reps who voted for this corporate welfare directly or indirectly received campaign funds from the developers, their attorneys and/or other interested parties or cut-outs? 

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16 minutes ago, Skyboxdweller said:

It's outrageous that this development gets a 90% tax abatement for basically providing market rate office facilities in a city that has a 20% + office vacancy rate downtown and nearby in the Energy Corridor.  If this project couldn't make it without a subsidy from you and me, Joe Taxpayer, then it shouldn't get built.  By giving it a tax advantage it hurts the ability of existing owners of taxable property to fill their buildings, which in turn results in  their lower tax valuation, thus a double whammy to the tax base.  Follow the money......how many of those elected reps who voted for this corporate welfare directly or indirectly received campaign funds from the developers, their attorneys and/or other interested parties or cut-outs? 

 

Totally fair question. I would also imagine that the funds help provide the concessions about "workforce or affordable" housing. I'm not sure how much tech companies prefer to have certain types of office space and how that compares to office space in the region. Not sure what portion of their expected tax bill they are having rebated represents, either.  Isn't it like .65%? So, a significant chunk of the expected tax bill with the benefit that their receiving is $600k/year for 10 years. 

 

12 minutes ago, Skyboxdweller said:

The Chronicle statement that the Founder's District is funded by Mark Toon is inaccurate.  At least $6M of the funding has now been provided by the City of Houston.

 

Isn't the six million coming in the form of tax rebates after it opens? I don't think you typically count future tax costs as part of the funding. 

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It's a future subsidy that substitutes for equity.  In order to give the debt capital  the required internal rate of return, if the future cash flow was burdened by a normal tax rate it would limitthe amount of debt that the project could bear. 
The sponsor could have put more equity  in order to deliver the required financial ratios ( cash flow to leverage). But instead, you and me are providing a subsidy in lieu of sponsor equity. What do we get out of it?  A suburban  Disney-land office park that will look and feel dated before the grout on the brick veneer sets. 

This is what drives me mad about "free enterprise" and "entrepreneurship:" in America. We have socialized risk and privatized gain....See financial crisis 2008 for reference.

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12 hours ago, Skyboxdweller said:

It's a future subsidy that substitutes for equity.  In order to give the debt capital  the required internal rate of return, if the future cash flow was burdened by a normal tax rate it would limitthe amount of debt that the project could bear. 
The sponsor could have put more equity  in order to deliver the required financial ratios ( cash flow to leverage). But instead, you and me are providing a subsidy in lieu of sponsor equity. What do we get out of it?  A suburban  Disney-land office park that will look and feel dated before the grout on the brick veneer sets. 

This is what drives me mad about "free enterprise" and "entrepreneurship:" in America. We have socialized risk and privatized gain....See financial crisis 2008 for reference.

 

Gee, and I wonder who was responsible for this "thing" that happened in 2008 hmmmm, I wonder who ?

I personally have no problem with RESPONSIBLE socialized risk as long as it's done fairly and evenly.  Of course, lately that is up for debate, sadly.  But, as far as this privatized gain that happened and still happens at the expense of us lowlife low wage earners, well, that's the main drawback of our economy and that is the main reason we have something known as "regulations" that are in place (or used to be in place) up until a few years ago.  Like everything in life, moderation and fairness is the key.  Not too extreme in one direction or another.  Unfortunately, Houston is at odds with most of the rest of the current trend in this country of deregulating basically EVERYTHING at OUR taxpayers' expense while benefiting the very wealthy and reducing already scare resources.  The trend has to reverse to be fair and before it's too late.  Thank goodness Houston does a pretty decent job of weighing both to it's own benefit, and to the benefit of future Houstonians.  Very commendable in this current polarized climate where one is wrong if they go towards the middle and try to work together, thereby offending the "purists" running executive government in DC and it's unreasonable hard headed following.

But, I digest...

 

We should all be a lot more grateful that wealthy developers are still investing and "bully" on development in Houston in this current economic climate of change and uncertainty and this includes the Founders District right along with all the other improvements that have been made and are being invested in for a great number of years now.  I truly see all this development as a huge plus to our fair city, with very little to complain about, at least in our city and area of the country. Visually, I see the change happening so rapidly now, it is hard to keep up with.  Unless you drive all over the city and our giant metro area each month, or even week, you are likely to miss something new and exciting in just about every zone in town.  This is another great reason that I'm thankful we have the HAIF forum to share our thoughts and updates on what we are able to find out about what is happening and changing every single day.  Thank you HAIF !

 

 

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Everything in moderation, agreed.  When I look at subsidies for any project meant to serve private interests I wonder why the project couldn't make it on its own.  This project is located amid a strip of industrial and light industrial buildings, including a waste transfer station. wedged along Beltway 8.  It's probably  less than two miles east of see-through high rise office buildings that have no tenants. The developers claim that they are constructing a walkable environment. This is pure hype. It's a parcel surrounded by industrial buildings, far from greenspace and far from shopping and anything  of interest to walk to. I walk three to four miles a day in Uptown/Galleria.  I have restaurants,supermarkets, clothing stores, and parks along my route.  There is a McDonalds on the other side for I-10 that is in walking distance from the Cannon, and not much else.  It's clear that this project can't make it on its own without subsidy, that in a city with a large office vacancy situation more office space is not a burning public need and with subdivisions built inside of reservoirs a mile or two west of this development the public would be better served with subsidies directed elsewhere.  Re 2008, which is someone what off subject, how many investment bankers, rating agency personnel, portfolio managers and others who packaged,peddled  and profited from subprime mortgage debt were brought up on criminal fraud charges?  Zero.  They are still living in Greenwich, CT. and Bel Air, CA on the proceeds of their ill gotten gain. 

Edited by Skyboxdweller
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Subsidies aside, this is an extremely impressive project.  There are a lot of start ups here, some of which are really starting to scale and getting large valuations.  The Cannon is having to expand much quicker than they anticipated.  Major Energy companies are putting teams out here (Chevron Technology Ventures, Shell Lubricants, etc) there are a lot of VC's and angel investors here, major law firms have presences out here, banks, cpa firms, etc.  It really is crazy what they've done in a short amount of time and with its proximity to the Energy Corridor, I would not be surprised if its as successful or more successful than the Ion.  Fortunately, I think it will be less of a competition, but instead have more alignment and promote one another's missions for the betterment of Houston.  It will be exciting to watch both grow over the next 3-5 years and beyond.

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1 hour ago, CREguy13 said:

Subsidies aside, this is an extremely impressive project.  There are a lot of start ups here, some of which are really starting to scale and getting large valuations.  The Cannon is having to expand much quicker than they anticipated.  Major Energy companies are putting teams out here (Chevron Technology Ventures, Shell Lubricants, etc) there are a lot of VC's and angel investors here, major law firms have presences out here, banks, cpa firms, etc.  It really is crazy what they've done in a short amount of time and with its proximity to the Energy Corridor, I would not be surprised if its as successful or more successful than the Ion.  Fortunately, I think it will be less of a competition, but instead have more alignment and promote one another's missions for the betterment of Houston.  It will be exciting to watch both grow over the next 3-5 years and beyond.


glad to hear our start ups are gaining steam. We need to continue to diversify and become strong economically on all fronts. Our city is maturing!

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  • 1 month later...

I hate this project.

 

6 million city subsidy is seen as a small amount, but it could pay for so much more, especially when the city's finances are suffering from the property tax revenue cap and ongoing pension debts, etc. 6 million is 10 cops making 60,000 a year for 10 years. 6 million is a community center or a library, or two swimming pools or four city parks. Or a thousand summer jobs for troubled teens.

 

Plus its ugly. What do the developers think this is, Youngstown? There ain't no red brick industrial lofts off I-10. The actual industrial heritage of that area(when there was an MKT spur track going up towards Hammerly Rd) was quonset huts and metal buildings, most of which are still there(Bison materials, Elliot Forklifts, etc). You want industrial reuse? Rent some of those old business suite centers and give them a power washing and there's your startup space right there. It was good enough for companies that pioneered the mapping of the sea floor or calculated the location of oil using seismic data and powerful computers back in the 1970s, so its certainly good enough for tech companies of tomorrow.

 

There is zero need to build this kind of thing in an area that's full of half empty high rises that are brand new. It's no mans land, I was just thinking the other day of how strange the neighborhood off Brittmore is, wedged between the beltway and the levee. Its full of unrestricted townhouse development and light industry. Just leave it alone.

 

Why do startups need some corny fake restored warehouses anyways? What they probably need is cash money and business support. It's a cargo cult IMO. Someone looked at the success of startup culture housed in adaptive reuse locations and completely missed the context and cause and effect(rust belt city with strong eds and meds legacy uses run down structures because they are cheap). Yes it must be the looks of old brick that makes people creative, its what they want! Cringey AF.

Edited by zaphod
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  • 1 month later...

Don't think it's related to this project, but it was the closest one I could find a thread for: does anyone know what is going up at I-10 and Upland next door to the Grove apartments? I can't recall seeing anything about this site, but they have been working there for a few months and there are now several ~5 story elevator shafts built, looks like more apartments but wouldn't surprise me if it was another storage place or something.

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On 1/17/2020 at 8:29 PM, zaphod said:

I hate this project.

 

6 million city subsidy is seen as a small amount, but it could pay for so much more, especially when the city's finances are suffering from the property tax revenue cap and ongoing pension debts, etc. 6 million is 10 cops making 60,000 a year for 10 years. 6 million is a community center or a library, or two swimming pools or four city parks. Or a thousand summer jobs for troubled teens.

 

Plus its ugly. What do the developers think this is, Youngstown? There ain't no red brick industrial lofts off I-10. The actual industrial heritage of that area(when there was an MKT spur track going up towards Hammerly Rd) was quonset huts and metal buildings, most of which are still there(Bison materials, Elliot Forklifts, etc). You want industrial reuse? Rent some of those old business suite centers and give them a power washing and there's your startup space right there. It was good enough for companies that pioneered the mapping of the sea floor or calculated the location of oil using seismic data and powerful computers back in the 1970s, so its certainly good enough for tech companies of tomorrow.

 

There is zero need to build this kind of thing in an area that's full of half empty high rises that are brand new. It's no mans land, I was just thinking the other day of how strange the neighborhood off Brittmore is, wedged between the beltway and the levee. Its full of unrestricted townhouse development and light industry. Just leave it alone.

 

Why do startups need some corny fake restored warehouses anyways? What they probably need is cash money and business support. It's a cargo cult IMO. Someone looked at the success of startup culture housed in adaptive reuse locations and completely missed the context and cause and effect(rust belt city with strong eds and meds legacy uses run down structures because they are cheap). Yes it must be the looks of old brick that makes people creative, its what they want! Cringey AF.

I would have loved to see this built in Midtown or East End. You're right, the location is terrible. I'm a creative, and my friend has her company here. The problem is I don't see many creatives wanting to drive 30 mins from the city center just to work in a spot in the long term. I mean it's def exceeding expectations but this would have been so cool near downtown. 

Edited by j_cuevas713
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2 hours ago, j_cuevas713 said:

I would have loved to see this built in Midtown or East End. You're right, the location is terrible. I'm a creative, and my friend has her company here. The problem is I don't see many creatives wanting to drive 30 mins from the city center just to work in a spot in the long term. I mean it's def exceeding expectations but this would have been so cool near downtown. 

 

what these comments ignore is one itsy bitsy minor point - economics. you want to know why this is located where it is and not "near downtown"? money. go look at what dirt is trading for "near downtown" and compare it to this. it's easy to bemoan something when it isn't your money but  the cost difference is massive. and you know who would bare the brunt of those increased costs? the cash-strapped startup community this city is desperately trying to foster.

 

instead of complaining that this doesn't meet some subjective aesthetic or location criteria, how about we support our still tiny startup community? how abut applauding the fact that this 120,000 SF start up community is essentially at capacity just a few months after opening? or even acknowledging that the very fact that it is full means it met a very real market demand that may not have been met "near downtown"? and besides, in case y'all missed it, there are several startup communities, incubators and coworking concepts planting flags in and around downtown so it's not like the cannon prevented those areas from attracting those concepts anyways. these things aren't mutually exclusive and in fact that will likely work in harmony. not everyone lives or wants to be "near downtown".

 

to think that in a startup barren city like Houston someone would use the word "hate" to describe one of the most successful startup communities in the city is ridiculous. houston hasn't earned the right to admonish concepts like the cannon. get off your high horse.

Edited by swtsig
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1 hour ago, swtsig said:

 

what these comments ignore is one itsy bitsy minor point - economics. you want to know why this is located where it is and not "near downtown"? money. go look at what dirt is trading for "near downtown" and compare it to this. it's easy to bemoan something when it isn't your money but  the cost difference is massive. and you know who would bare the brunt of those increased costs? the cash-strapped startup community this city is desperately trying to foster.

 

instead of complaining that this doesn't meet some subjective aesthetic or location criteria, how about we support our still tiny startup community? how abut applauding the fact that this 120,000 SF start up community is essentially at capacity just a few months after opening? or even acknowledging that the very fact that it is full means it met a very real market demand that may not have been met "near downtown"? and besides, in case y'all missed it, there are several startup communities, incubators and coworking concepts planting flags in and around downtown so it's not like the cannon prevented those areas from attracting those concepts anyways. these things aren't mutually exclusive and in fact that will likely work in harmony. not everyone lives or wants to be "near downtown".

 

to think that in a startup barren city like Houston someone would use the word "hate" to describe one of the most successful startup communities in the city is ridiculous. houston hasn't earned the right to admonish concepts like the cannon. get off your high horse.

Of course that's the reason, and I'm not knocking that. Like I said, my friends company is running out of The Cannon, so I'm not lacking in support. And it's much more than aesthetics. I get that the start up community in this city is trying to get a stronger foothold, and it's happening at a much faster rate than expected. Probably because much of that community has been waiting for something like this for a very long time. I have a buddy speaking at Digital Fight Club tonite, so I get the need to be supportive and understand why this is so far out on the outskirts of the city. It would just be neat to see this closer in. I'm just hoping that at some point more of this development begins at the city center and moves it's way outward. We're already seeing it with a few small tech companies moving downtown and the Innovation District in Midtown, so it's very promising. And the remark about not everyone wants to live near downtown isn't even the point. The point is that the city of Houston begins there, not on Beltway 8 and I-10. We talk about density and walkability all the time in this forum and placing locations like this closer to the city center spurs that growth and economic development we all want. 

Edited by j_cuevas713
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@j_cuevas713 I agree with you but I think the center of the Houston population is closer to this than downtown. 

 

It's for that reason I think we need more projects like this near downtown. Especially live, work and play projects.

 

The west is an employment gold mine and adding more is just fueling the spread of the city further and further. We need to balance the polarization and a job focus on the loop would aid in that. 

 

Traffic is horrible will over the city but the infrastructure for public and personal transportation is least horrible in the core. 

The west is already due for another highway, instead of more of these things wouldn't be wiser to spend that money improving the highways, public transportation, bike Lanes in the core? A bigger and bigger land area just means bigger and bigger budgets to maintain it all. 

 

I don't think the city should be encouraging this. What's next?  City Center La Grange?

 

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3 hours ago, HoustonIsHome said:

@j_cuevas713 I agree with you but I think the center of the Houston population is closer to this than downtown. 

 

It's for that reason I think we need more projects like this near downtown. Especially live, work and play projects.

 

The west is an employment gold mine and adding more is just fueling the spread of the city further and further. We need to balance the polarization and a job focus on the loop would aid in that. 

 

Traffic is horrible will over the city but the infrastructure for public and personal transportation is least horrible in the core. 

The west is already due for another highway, instead of more of these things wouldn't be wiser to spend that money improving the highways, public transportation, bike Lanes in the core? A bigger and bigger land area just means bigger and bigger budgets to maintain it all. 

 

I don't think the city should be encouraging this. What's next?  City Center La Grange?

 

EXACTLY! I can't knock the success of projects like City Center but it also pulls people from exploring the cities true core. I'm actually not a fan of City Center.

Edited by j_cuevas713
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2 hours ago, j_cuevas713 said:

EXACTLY! I can't knock the success of projects like City Center but it also pulls people from exploring the cities true core. I'm actually not a fan of City Center.

 

Some people simply don't care about the concept of a city's "true core"

Development is organic. It happens where it happens for a reason, usually to do with affordability and ability to make a profit.

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We have a 20% vacancy rate on office space in this city and the major tenants ( 0il and gas and related businesses) are consolidating, reducing staff and using less space.  I addition, there is a helluva lot of sublease space on the market.  One would think that start-ups can find a deal in Class B  buildings or in short term subleases in downtown, uptown or energy corridor buildings.  At current absorption rates we have a dozen years of excess office space and building this space for start-ups appears to me to be ill--conceived. 

 

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  • The title was changed to Founders District/The Cannon Mixed-Use at Beltway 8 & I-10
  • 3 months later...
  • 2 months later...
  • 1 month later...

 

https://apnews.com/press-release/business-wire/technology-business-houston-building-construction-construction-and-engineering-a35fe70f7b0f44d6b31a450c193c6ade

 

The Founders District, an experiential mixed-use community in West Houston, welcomes Chevron to the building that houses The Cannon, a flexible workspace and innovation hub. Chevron is creating a digital makerspace where they will partner with start-up companies and community organizations in Houston’s innovation ecosystem to test emerging technologies that add efficiencies to their business and operations. Chevron will join Corva, Texas Citizens Bank, and Baker Tilly in the western portion of the Cannon building, directly off Brittmoore Road.



 

Chevron has been a key sponsor of The Cannon since 2018, occupying a branded office space within the innovation hub. The company recently executed a new lease agreement for a significantly larger footprint at The Cannon.

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  • 1 year later...
7 hours ago, texan said:

https://powderkeghouston.com

Well this ended up being very different from the originally proposed rendering. Sad the rest of this project has gone nowhere. Could've been something great!

It's still a fun spot. I've been going there for after work drinks for a while now. Also, they could still build out the area so having a pole building with some shipping containers is probably a good thing for now. 

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  • 3 weeks later...
  • The title was changed to Founders District/The Cannon Mixed-Use At Beltway 8 & I-10
  • 1 year later...
On 9/25/2020 at 6:21 PM, Paco Jones said:

Powder Keg

 

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powderkeg-bar.jpg

The Powder Keg launched an NFT sale last year to finance the construction of this version of the building. The open-air venue is a temporary building. The new building will be at 1300 Brittmoore. No update available since the launch just over a year ago.

https://www.powderkegcollective.xyz

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