Astrodome To Be Turned Into A Movie Studio

[Furious Jam]

Considering that the Astrodome has its own zipcode, and inner loop Houston is desperate for hotel space, I wish that they would reconsider the hotel idea. Astrodome could easily divide up into 1200 spacious rooms.

Turning it into a hotel makes way too much sense. How cool would it be to have a hotel with the ultimate atrium? You could actually extend the MetroRail into it, so people could just ride to downtown, the medical center, the Galleria, wherever.

[Houston19514]

Considering that the Astrodome has its own zipcode,

?????

[TheNiche]

?????

77230

It was created in the aftermath of Hurricane Katrina, when the place was full of refugees. Don't know if it was temporary or permanent.

[scarface]

So I've curiously been wondering if this idea is a gonner? We haven't heard any updates but the website is still running? Does anyone know?

[TheNiche]

So I've curiously been wondering if this idea is a gonner? We haven't heard any updates but the website is still running? Does anyone know?

It was never credible.

[dbigtex56]

It was never credible.

As I recall, you also said that claims of environmental damage from the ruptured oil well in the Gulf were not credible, either.

What litmus test makes something credible? For that matter, are litmus tests credible?

[TheNiche]

As I recall, you also said that claims of environmental damage from the ruptured oil well in the Gulf were not credible, either.

To your credit, I have been wrong before. I was wrong about Mosaic and Montage. They weren't deals that I'd have considered credible, but they got built anyway. Turns out, they bankrupted the developer and his bank. I can lead a horse to water, but... [shrug]

As for the Deepwater Horizon, I was going on quantitative data provided by the Chronicle, which turned out not to be a good indicator. The disclaimer about no guarantees on third-party data is implicit.

What litmus test makes something credible? For that matter, are litmus tests credible?

The test is money. Show me the proposed capital structure with signed LOIs from a qualified backer (or backers)--just like the convention hotel developer had--and I'll bless the plan's credibility.

[Urbannizer]

Future of Astrodome could fall under 3 scenarios

June 9, 2010, 9:14PM By DAVID BARRON

Harris County officials plan next week to unveil three scenarios for the Astrodome — ranging from demolition to a multi-purpose redesign that could accommodate a planetarium, a movie soundstage and other attractions — and a revised master plan for Reliant Park that could include a new arena and hotel.

http://www.chron.com/disp/story.mpl/metropolitan/7045156.html

[TheNiche]

Future of Astrodome could fall under 3 scenarios

June 9, 2010, 9:14PM By DAVID BARRON

http://www.chron.com/disp/story.mpl/metropolitan/7045156.html

Plan B or C won't happen without public money. They're naive if they think that those will pan out (or perhaps are just hoping that the public is naive).

That leaves Plan A, demolition. But if it takes $100 million to demolish it and recover only 11.25 acres, that's $204 per square foot of new park land...and the new park is only available for public use when Reliant Park is open for football games, conventions, the rodeo, or the like.

Think about that. Discovery Green is an 11.8-acre park that cost $103.5 million (net of the cost of underground parking spaces)...that's $201 per square foot for an awesome park that is accessible 24/7 in a downtown location, where previously there was ugliness.

We could mothball the Astrodome indefinitely AND have another Discovery Green. ...or convert eight downtown blocks to new parkland on par with the quality of Discovery Green and have enough left over to re-do Market Square Park. ...or preserve thousands of acres of forested bottomlands along Cypress Creek or Spring Creek, several times the size of Memorial Park with similar low- and medium-intensity recreational amenities. ...or develop about one new suburban park the size of Memorial Park in each of the four county commissioners' precincts. ...you get the idea.

Let the Astrodome stand, powerwash it regularly, and give us amazing parks we can use 24/7. ...or lower our Harris County taxes by an average of $74 per household.

[Houston19514]

Plan B or C won't happen without public money. They're naive if they think that those will pan out (or perhaps are just hoping that the public is naive).

That leaves Plan A, demolition. But if it takes $100 million to demolish it and recover only 11.25 acres, that's $204 per square foot of new park land...and the new park is only available for public use when Reliant Park is open for football games, conventions, the rodeo, or the like.

Think about that. Discovery Green is an 11.8-acre park that cost $103.5 million (net of the cost of underground parking spaces)...that's $201 per square foot for an awesome park that is accessible 24/7 in a downtown location, where previously there was ugliness.

We could mothball the Astrodome indefinitely AND have another Discovery Green. ...or convert eight downtown blocks to new parkland on par with the quality of Discovery Green and have enough left over to re-do Market Square Park. ...or preserve thousands of acres of forested bottomlands along Cypress Creek or Spring Creek, several times the size of Memorial Park with similar low- and medium-intensity recreational amenities. ...or develop about one new suburban park the size of Memorial Park in each of the four county commissioners' precincts. ...you get the idea.

Let the Astrodome stand, powerwash it regularly, and give us amazing parks we can use 24/7. ...or lower our Harris County taxes by an average of $74 per household.

Doesn't your strategy assume a ZERO cost for letting the Astrodome stand? That of course is not reality. Truly "letting it stand" with no maintenance is not a viable option, because in fairly short order that will become "let it crumble"; then it's a safety hazard and then we have to spend money on fixing it or, voila, tearing it down.

You may well be right that neither plan B or C will work without public money. But we're already in for $100 Million with plan A with more or less nothing gained (as you pointed out).

If we can achieve Plan B or C with the input of some public money (anything less than $100 Million) we are instantly money ahead of plan A, PLUS we save the historic structure and gain the planetarium, science and math institute, museums, movie soundstages, show spaces etc. etc.

[TheNiche]

Doesn't your strategy assume a ZERO cost for letting the Astrodome stand? That of course is not reality. Truly "letting it stand" with no maintenance is not a viable option, because in fairly short order that will become "let it crumble"; then it's a safety hazard and then we have to spend money on fixing it or, voila, tearing it down.

You may well be right that neither plan B or C will work without public money. But we're already in for $100 Million with plan A with more or less nothing gained (as you pointed out).

If we can achieve Plan B or C with the input of some public money (anything less than $100 Million) we are instantly money ahead of plan A, PLUS we save the historic structure and gain the planetarium, science and math institute, museums, movie soundstages, show spaces etc. etc.

It doesn't require a huge budget just to maintain it structurally...but yes, it would be more than zero. The gist of things remains the same.

And I agree that Plan B or C might work with some input of public money, but the County Commissioners seem rather adamant that that not happen (apparently unless it has to do with demolition and parkland replacement). I see B and C as straw men, crappy plans set up to fail in order to justify the politically unpopular Plan A...which I would speculate has probably been agreed upon in backroom deals with the Texans and HSL&R.

[T 2 THA C]

1975 documentary celebrates 10th anniversary of the Astrodome

I would like to see some use put to this!!!

[Urbannizer]

Ambitious Dome plan could cost more than $1 billion

By CHRIS MORAN HOUSTON CHRONICLE June 14, 2010, 1:51PM

Reliant Park officials have unveiled a $1.35 billion plan that would convert the Astrodome to a multipurpose convention and science center as part of a redevelopment that also would replace Reliant Arena and construct a hotel with as many as 1,500 rooms.

It, however, would not happen quickly as it would require public approval of as much as $900 million in taxpayer financing. Not only would the architects of such a plan not seek voter approval until at least 2012, but they likely would approach the public in phases for piecemeal approval to tackle the costs incrementally.

***

The so-called Astrodome Renaissance would include convention space, a planetarium, a series of interactive exhibits that would allow users to simulate space and deep sea exploration, an alternative energy center and a movie studio.

http://www.chron.com/disp/story.mpl/metropolitan/7052515.html

Edited June 14, 2010 by Urbannizer

[mfastx]

Great idea, and it only cost half as much as the Katy Freeway expansion. Too bad work won't start on this for a couple of years.

[Jack lane]

..

Edited June 14, 2010 by Jack lane

[Houston19514]

Ambitious Dome plan could cost more than $1 billion

By CHRIS MORAN HOUSTON CHRONICLE June 14, 2010, 1:51PM

http://www.chron.com/disp/story.mpl/metropolitan/7052515.html

Bad headline and mediocre writing. The actual plans for the dome range from $88 Million (for demolition) to $548 Million for the full Astrodome Renaissance. The other $767 million are for expanding Reliant Center, building a new Reliant Arena, hotel, parking garage, and transportation center (and another $40 Million of existing Astrodome debt is inexplicably included... that money most be repaid, period. No matter what happens to the Dome).

[Houston19514]

It doesn't require a huge budget just to maintain it structurally...but yes, it would be more than zero. The gist of things remains the same.

I don't think you are recognizing how much it costs to maintain a structure the size of the Astrodome. We've been basically doing less than what you suggest for the past ten years or so (we have not even been power-washing it) and it costs us about $2 Million per year. For an accurate comparison of the cost of your proposal, we would have to calculate how large of a fund would be required to provide $2 Million+ per year in perpetuity. I'm thinking the amount required to fund that annual expenditure will be not much less than the $88 Million cost for demolition and replacement with green space/major water feature etc. In short, it really makes no financial sense to continue spending money merely maintaining a structure with no intention to ever use it.

The real choices re: the Astrodome are as follows: (1) spend $88 Million to demolish the dome and we get green space/water features, etc. (2) Niche's proposal which would perhaps require something slightly less than $88 Million for which we get, in reality, nothing (note that the $ 2 million per year we are spending is neither power washing or really maintaining the structure in a way that will survive in perpetuity... it's looking pretty bad, including significant rust showing), or (3) investing another roughly $200 - $400 million to both preserve this historic structure and provide some pretty substantial additional facilities and amenities for Houston.

[TheNiche]

I don't think you are recognizing how much it costs to maintain a structure the size of the Astrodome. We've been basically doing less than what you suggest for the past ten years or so (we have not even been power-washing it) and it costs us about $2 Million per year. For an accurate comparison of the cost of your proposal, we would have to calculate how large of a fund would be required to provide $2 Million+ per year in perpetuity.

Ok, well let's assume $2 mil. per year for 45 years is spent maintaining the Astrodome. Let's assume the the cost of capital for Harris County is 5%. The present value is approximately $35.5 million. The savings as compared to demolition (based on this new figure) would be $52.5 million, approximately the same amount as the City of Houston contributed to Discovery Green net of the cost of the underground parking spaces.

I'm thinking the amount required to fund that annual expenditure will be not much less than the $88 Million cost for demolition and replacement with green space/major water feature etc. In short, it really makes no financial sense to continue spending money merely maintaining a structure with no intention to ever use it.

FAIL

[Houston19514]

Fail indeed; your analysis, that is. Your proposal requires we maintain the dome in perpetuity, not for 45 years. If you are going to maintain it for 45 years . . . Then what? Demolish it after 45 years? Present value of demolition is approximately $88 million. Total present value cost of your 45 year plan . . . $ 124 million +.

[TheNiche]

Fail indeed; your analysis, that is. Your proposal requires we maintain the dome in perpetuity, not for 45 years. If you are going to maintain it for 45 years . . . Then what? Demolish it after 45 years?

In academic circles, present value analysis typically does not exceed 30 years because forecasting so far into the future is unreliable (in such a distant future, for instance, it becomes entirely plausible that private money will redevelop the Astrodome) and because the present value a dollar spent in such a distant time period modifies the result of an NPV calculation so insignificantly. I took it to the 45-year mark because that's a time horizon commonly used by appraisers in their analysis, and because I preferred having my numbers come out on the conservative side to dealing with your anal-retentive hair-splitting.

Present value of demolition is approximately $88 million. Total present value cost of your 45 year plan . . . $ 124 million +.

No. The present value of $88 million spent in 45 years at a 5% discount rate would be $9.3 million.

If...publicly-financed demolition is ultimately necessary--and I honestly don't think that it would be--then the savings to the taxpayer by mothballing the structure are approximately $43.2 million.

If you don't understand concepts related to the time value of money then I suggest that you go make friends with Google. It's an important life skill. Git!

[Houston19514]

You are joking, right, Niche? Anybody whose knowledge of time value is deeper than what can be gained from a 5 minute google search is laughing with me at your last response.

Your calculation would make $88 million available for the dome demolition in the year 2055. Anyone here think we'll be able to demolish the Dome 45 years from now for the exact same nominal dollar amount as it would cost today? If so I've got some financial deals for you.

Niche, you usually do a pretty good job creating your preferred facade of expertise and experience in every subject by utilizing your obvious skills with

google. But sometimes google just is not enough. Sometimes some actual knowledge is required.

Otherwise, you end up saying foolish things like your previous post.

Edited June 16, 2010 by Houston19514

[RedScare]

It does not cost $88 million to demolish the Dome.

Or, the Astrodome could be torn down.

Even that option likely would require a referendum on a bond measure to cover the estimated $88 million cost of demolition and conversion of the site into an outdoor plaza.

It cost $6 million to demolish Texas Stadium in Irving earlier this year. While the Dome is probably slightly larger, and a bit more complex, it is not 14 times as large or complex. Most of that $88 million is likely the price of turning the resulting 9 acre lot into an "outdoor plaza" sufficiently fancy to please our Billionaire renter, Bob McNair. If the Dome is to be razed, there is no reason not to turn that 9 acres into a parking lot that McNair can charge an exorbitant fee to park on.

I suspect the $88 million figure is the beginning of the plan to push a $1 Billion bond referendum on us.

[Houston19514]

It does not cost $88 million to demolish the Dome.

It cost $6 million to demolish Texas Stadium in Irving earlier this year. While the Dome is probably slightly larger, and a bit more complex, it is not 14 times as large or complex. Most of that $88 million is likely the price of turning the resulting 9 acre lot into an "outdoor plaza" sufficiently fancy to please our Billionaire renter, Bob McNair. If the Dome is to be razed, there is no reason not to turn that 9 acres into a parking lot that McNair can charge an exorbitant fee to park on.

Interesting.

Note, that the Reliant Park people have been clear that the $88 Million estimate is for demolition and replacement with a plaza, water features, etc. The media may have not understood or made that clear.

Any idea what was included in that $6 Million for Texas Stadium? They did actually mention that it would be a lot more expensive than the demolition of Texas Stadium because of the close proximity of Reliant Stadium and Reliant Center.

Out of curiosity, I started looking around. Demolition of the Seattle Kingdome 10 years ago cost $9 Million. Not sure what all was included in that price either. (i.e., was that just the implosion, or did that include haul and restoration of the land to flat surface, or did it also include the creation of parking lots (which I believe is what replaced the Kingdome).

Edited June 16, 2010 by Houston19514

[Houston19514]

In academic circles, present value analysis typically does not exceed 30 years because forecasting so far into the future is unreliable (in such a distant future, for instance, it becomes entirely plausible that private money will redevelop the Astrodome) and because the present value a dollar spent in such a distant time period modifies the result of an NPV calculation so insignificantly. I took it to the 45-year mark because that's a time horizon commonly used by appraisers in their analysis, and because I preferred having my numbers come out on the conservative side to dealing with your anal-retentive hair-splitting.

Apparently the academic circles you travel in (i.e., Google) are not aware that universities, museums and other entities all over the country routinely establish endowments designed to provide $X per year in perpetuity. However do universities ever calculate the funding required for those endowments if the present value analysis in academic circles does not exceed 30 years? Hmmm?? You might give that question a spin on Google, Niche.

Edited June 16, 2010 by Houston19514

[TheNiche]

You are joking, right? Anybody whose knowledge of time value is deeper than what can be gained from a 5 minute google search is laughing with me at your last response.

Your calculation would make $88 million available for the dome demolition in the year 2055. Anyone here think we'll be able to demolish the Dome 45 years from now the exact same nominal dollar amount as it would cost today? If so I've got some financial deals for you.

Nope, not joking.

The rule on inflation is that you must either consistently use inflation-free (real) inputs or (nominal) inputs that have inflation already built in. For simplicity's sake, I chose the former.

With that in mind, the variable that you really ought to be questioning is the discount rate. I know that the Houston Harris County Sports Authority has been struggling, so I just threw 5% out there as an example. If Harris County or the City of Houston, with solid AAA bond ratings and the authority to raise the tax rates, were to finance it, then the discount rate should be in the low threes. Nevertheless, the inflation-adjusted discount rate would have to be approximately 0.1% for demolition to save taxpayers money. That's not going to happen.

Niche, you usually do a pretty good job creating your preferred facade of expertise and experience in every subject by utilizing your obvious skills with

google. But sometimes google just is not enough. Sometimes some actual knowledge is required.

I have a degree in finance AND a separate degree in economics AND a demonstrated professional expertise in determining the financial feasibility of real estate deals that typically involve new construction, substantial renovation, or demolition.

Whatever your academic or professional background is, it does not appear to encompass any of these skill sets. I suggest that you use Google (note that I capitalize it, unlike you, and am rubbing your nose in it even though I didn't major in English) because it would be asinine to suggest that you get a formal education. Google is the layman's path of least resistance. Use it.

[TheNiche]

Interesting.

Note, that the Reliant Park people have been clear that the $88 Million estimate is for demolition and replacement with a plaza, water features, etc. The media may have not understood or made that clear.

There's probably a reason that the plaza was played down; nobody cares.

Compare the aesthetic enjoyment of a rather sterile plaza with that of an extant 'eighth wonder of the world'. Tit for tat...or only half a tat if you ask my opinion.

[Houston19514]

Nope, not joking.

The rule on inflation is that you must either consistently use inflation-free (real) inputs or (nominal) inputs that have inflation already built in. For simplicity's sake, I chose the former.

With that in mind, the variable that you really ought to be questioning is the discount rate. I know that the Houston Harris County Sports Authority has been struggling, so I just threw 5% out there as an example. If Harris County or the City of Houston, with solid AAA bond ratings and the authority to raise the tax rates, were to finance it, then the discount rate should be in the low threes. Nevertheless, the inflation-adjusted discount rate would have to be approximately 0.1% for demolition to save taxpayers money. That's not going to happen.

I have a degree in finance AND a separate degree in economics AND a demonstrated professional expertise in determining the financial feasibility of real estate deals that typically involve new construction, substantial renovation, or demolition.

Whatever your academic or professional background is, it does not appear to encompass any of these skill sets. I suggest that you use Google (note that I capitalize it, unlike you, and am rubbing your nose in it even though I didn't major in English) because it would be asinine to suggest that you get a formal education. Google is the layman's path of least resistance. Use it.

. . . and you're unemployed. I can do the math. Can you?

The "rule" on inflation is that if you don't account for it, you're screwed. And you did not account for it. You cannot avoid the fact Niche, that you gave us a calculation that would provide a nominal dollar amount of $88 Million in 45 years, the exact same nominal dollar amount estimated for the project currently. It really cannot be much simpler. You gave us bad numbers. With your assumed 5% discount rate, the PV $9.3 million WILL NOT provide sufficient money in 45 years to do what $88 Million will do today.

You can apply a 3% rate to it if you like and pronounce a $23.3 Million PV (which of course makes your argument even more ridiculously wrong-headed than it already is), but you will STILL only have $88 million nominal dollars in 45 years, not nearly enough to accomplish what $88 Million will accomplish today.

Education is the path to understanding what you read on Google. Give it a shot.

Here's some help to resolve your confusion that you might not be able to find quickly on Google... The language you posted above regarding inflation, to-wit: "The rule on inflation is that you must either consistently use inflation-free (real) inputs or (nominal) inputs that have inflation already built in" (which you no doubt cut and pasted from your Google search results) may be correct (although very sloppily phrased).

The flaw in your analysis is that you did not apply it. You say you went with the former "inflation-free (real) inputs", but you did not. You used nominal inputs. If you were to use "real" inputs, you would first have to calculate the real 2055 value of the current $88 Million. THEN apply your discount rate to that result. Your flaw is in giving us the present value of 88 Million 2055 Dollars. That is not a relevant number. What we need is the present value of the amount it would cost to duplicate what 88 Million 2010 Dollars will accomplish.

The shortcut version of that calculation is as I posted several posts ago: $88 Million.

Edited June 16, 2010 by Houston19514

[Houston19514]

Compare the aesthetic enjoyment of a rather sterile plaza with that of an extant 'eighth wonder of the world'. Tit for tat...or only half a tat if you ask my opinion.

Agreed. I favor saving the Dome.

[TheNiche]

Apparently the academic circles you travel in (i.e., Google) are not aware that universities, museums and other entities all over the country routinely establish endowments designed to provide $X per year in perpetuity. However do universities ever calculate the funding required for those endowments if the present value analysis in academic circles does not exceed 30 years? Hmmm?? You might give that question a spin on Google, Niche.

Well that one's easy. The financial operation of a university is not merely academic.

But to more directly address your example (which has nothing to do with an analysis of the fate of the Astrodome), an endowment such as you propose that is intended to offer some precise amount of revenue for perpetuity does not occur...ever...because you have not provided a method for dealing with surpluses. This is where the perpetuity formula breaks down; an endowment is not a bond.

[TheNiche]

. . . and you're unemployed. I can do the math. Can you?

. . . and you're confusing causation and correlation. Did you even go to college?

The "rule" on inflation is that if you don't account for it, you're screwed. And you did not account for it. You cannot avoid the fact Niche, that you gave us a calculation that would provide a nominal dollar amount of $88 Million in 45 years, the exact same nominal dollar amount estimated for the project currently. It really cannot be much simpler. You gave us bad numbers. With your assumed 5% discount rate, the PV $9.3 million WILL NOT provide sufficient money in 45 years to do what $88 Million will do today.

You can apply a 3% rate to it if you like and pronounce a $23.3 Million PV (which of course makes your argument even more ridiculously wrong-headed than it already is), but you will STILL only have $88 million nominal dollars in 45 years, not nearly enough to accomplish what $88 Million will accomplish today.

Education is the path to understanding what you read on Google. Give it a shot.

Here's some help to resolve your confusion that you might not be able to find quickly on Google... The language you posted above regarding inflation, to-wit: "The rule on inflation is that you must either consistently use inflation-free (real) inputs or (nominal) inputs that have inflation already built in" (which you no doubt cut and pasted from your Google search results) may be correct (although very sloppily phrased).

The flaw in your analysis is that you did not apply it. You say you went with the former "inflation-free (real) inputs", but you did not. You used nominal inputs. If you were to use "real" inputs, you would first have to calculate the real 2055 value of the current $88 Million. THEN apply your discount rate to that result. Your flaw is in giving us the present value of 88 Million 2055 Dollars. That is not a relevant number. What we need is the present value of the amount it would cost to duplicate what 88 Million 2010 Dollars will accomplish.

The shortcut version of that calculation is as I posted several posts ago: $88 Million.

Let's get a few things clear. 1) My treatment of inflation is proper, provided that the discount rate is appropriate. 2) I do not provide any warranty of my discount rate; the Sports Authority is in trouble and any new issuance of debt may be on terms that are not favorable to the public. Adjust it however you will, the deal only looks bad at 0.1%, and I'll break it down in a moment. 3) I invite you to plug anything I've said so far into Google and to see if it comes up on any other websites than this one. Have fun.

Here's the quick breakdown: At a mothball cost of $2 million per year, $88 million worth of 2010 dollars aren't spent until Year 44 (assuming that it doesn't get redeveloped with private money first). Is it any wonder that the discount rate has to be 0.1% for the deal to go bad? But not for a single year at the tail end of the analysis, even the acknowledgment of the validity of the concept of the time value of money invalidates the argument that demolishing the Astrodome saves taxpayers money.