City Plans Incentives For Downtown Homes

[lockmat]

excerpts:

Developers who qualify for the new Downtown Living Initiative could receive up to $15,000 for each unit they build in a multifamily complex of at least 10 units.

The overall downtown development initiative comprises an area near the George R. Brown Convention Center bordered by Runnells Street on the north, Chartres on the east, Pierce on the south and Fannin on the west.

In order to qualify for the financial incentives, developers would have to build within the specified zone and meet design guidelines focused on the project's street presence.

That would include adding ground-level shops or space for related uses.

The program would run for four years and cap out at 2,500 units.

http://www.chron.com...mes-3791742.php

[LTAWACS]

I love the idea... but it seems that's quite a broad area. Taking a guess it looks like right around 1/2 square mile. Hrm... does not seem like a lot of units for that much area.

[kylejack]

Is this just a setup for Marvy Finger? Is he going to get this incentive even though his plan is already underway?

[mfastx]

I love this idea, but I'm not sure it will work. That's that whole East side of downtown where parking lots rule.

Wish the time were a bit more than 4 years. I think you'd see better results with more time.

But I like it!

[Nate99]

Is this just a setup for Marvy Finger? Is he going to get this incentive even though his plan is already underway?

It catches the old Texaco building too, for which someone was fishing for incentives to build out in to condos.

[HoustonMidtown]

Mayberry Homes is already doing a similar thing in the Fourth Ward....they are building 4 or 5 homes right now, they are selling in the $140K range....buyer's can qualify for $15K in down payment assistance, etc....

[TheNiche]

What do y'all suppose Andy Icken meant by this statement:

"Our overall goal is to get rooftops in downtown Houston," said Andy Icken, the city's chief economic development officer. "The benefit is more people living downtown, which has a multiplier effect to the city."

Wish the time were a bit more than 4 years. I think you'd see better results with more time.

I actually think that this is a fairly well-reasoned incentive, and its just the sort of thing that management districts are supposed to do.

These would be one-time up-front payments to a developer meeting the City's criteria, which is a tremendously powerful incentive. It's not the same as a time-limited tax abatement. (If that doesn't make sense to you, then go back and read from the link that I gave you in the other thread on the time value of money.)

If even just two or three new apartment projects are built in the area, then those projects will advertise and promote themselves, draw more prospective tenants to that area, and create a tenant base that will enhance the breadth and depth of the market, while also proving it up for developers that may follow.

Developers other than just Marvy Finger need a proof of concept that is better than just One Park Place and Houston House. Those are bad comps for pretty much anything else in the entire city.

[kylejack]

I actually think that this is a fairly well-reasoned incentive, and its just the sort of thing that management districts are supposed to do.

Too bad only one third comes from the Downtown Management District.

[j_cuevas713]

Man this city keeps doing the right thing. I'd been wondering for a long time if the city would ever do something like this, and finally it happens. Really is a dream come true.

[mfastx]

I actually think that this is a fairly well-reasoned incentive, and its just the sort of thing that management districts are supposed to do.

These would be one-time up-front payments to a developer meeting the City's criteria, which is a tremendously powerful incentive. It's not the same as a time-limited tax abatement. (If that doesn't make sense to you, then go back and read from the link that I gave you in the other thread on the time value of money.)

If even just two or three new apartment projects are built in the area, then those projects will advertise and promote themselves, draw more prospective tenants to that area, and create a tenant base that will enhance the breadth and depth of the market, while also proving it up for developers that may follow.

Developers other than just Marvy Finger need a proof of concept that is better than just One Park Place and Houston House. Those are bad comps for pretty much anything else in the entire city.

Hope you're right. I think if two or three apartment projects are built because of this initiative, it will be deemed a success in my book.

Man this city keeps doing the right thing. I'd been wondering for a long time if the city would ever do something like this, and finally it happens. Really is a dream come true.

LOL, you have got to be the most positive poster on here. Good for you, j_cuevas713!

[TheNiche]

Too bad only one third comes from the Downtown Management District.

Oh, I missed that. Okay, now I dislike it.

[samagon]

Oh, I missed that. Okay, now I dislike it.

In my pea sized brain, it still doesn't seem that bad a deal.

If they can turn some parking lots (which probably pay a lot less in property tax than a one park place type building does) into condos, the city/county will get more property tax to pay back this upfront benefit to developers.

Maybe the condos would come without this incentive?

Then again, the housing would have to go somewhere, so the property tax would come anyway from new property development somewhere else?

[totheskies]

Wow this is what I'm talking about... City Council and the Mayor are thinking about the future of our downtown. Have to give it to people like Marvy Finger and Bob and Arpi Tcholakian (Phoenicia) for reminding us that downtown residential/mixed-use can and DOES work. It's a great time to be a Houstonian!

[TheNiche]

Then again, the housing would have to go somewhere, so the property tax would come anyway from new property development somewhere else?

Exactly. The kind of person that would lease a high-end apartment downtown probably would not have leased their unit in West University or Hillshire Village as an alternative. The only jurisdictions that aren't cannibalizing from their own tax base would be the Downtown Management District and the TIRZ.

The ideal case would be that the Mgt. District/TIRZ pay the incentive. And yes, there needs to be a time limit for redeeming the incentive. If there isn't a ticking clock, then developers will price the value of the incentive into what they're bidding for land, but sellers will not have an incentive to sell rather than continue to speculate on further land price appreciation in the future.

Wow this is what I'm talking about... City Council and the Mayor are thinking about the future of our downtown.

What's so special about east downtown, again? Isn't it just the area that we redefined with elevated freeways last century? If the City will incentivize development in east Downtown, then why not along the Buffalo Bayou corridor of the East End? Why not along light rail corridors? Why not around transit centers? Why not at Hardy Yards? Why not between Almeda and 288 near the TMC? These are all places with potential but that aren't special yet. But that's the point. East Downtown isn't special yet either. It'll get special when it happens, but so will those other places. The City of Houston will benefit, regardless, and has no reason to become involved.

[Pleak]

The only reason east downtown is special is photography. When people take snapshots of Houston (especially aerials and from 45S) their view is drawn from the impressive line of towers to the underdeveloped future. People are impatient and want their ideal shot so they can have bragging rights that their city is so cool whether it makes financial sense or not to do it.

And like was mentioned above - the only reason there is an east downtown is due to where the freeway was run 50 years ago. (It was put there for a reason - land was cheaper there because it was dumpy even back then) So that makes a dividing line to the eye in peoples photos. I wonder how much it will cost the City to end up getting the "glamour shot" from 45S they want a few years earlier than it would come by letting market forces work.

[lockmat]

Funny that so far its almost even in the poll for those that think the plan will work but most like it. I would think that if you didn't think it will work then you wouldn't like it.

[j_cuevas713]

Hope you're right. I think if two or three apartment projects are built because of this initiative, it will be deemed a success in my book.

LOL, you have got to be the most positive poster on here. Good for you, j_cuevas713!

LOL thanx, I mean people have to see the good in things. Everything becomes about a dollar, but what many don't understand is that you can't make money if you don't spend it, wisely I mean. So I just see some of the projects that some people are so against or complain about, and it just amazes me how some fail to see the light at the end of the tunnel. This city is a baby compared to other cities, and we are right in the middle of its growing pains. It's an amazing time to be a Houstonian.

[plumber2]

Oh, I missed that. Okay, now I dislike it.

I actually agree with Niche!

[kylejack]

The 380 passed City Council just now.

[j_cuevas713]

YESSS! GO H-TOWN!

[lockmat]

http://www.chron.com/news/houston-texas/article/Taxpayer-funded-incentives-to-be-doled-out-by-3811422.php

A board representing downtown Houston property owners acquired the power this week to dole out $37 million in taxpayer-funded incentives to developers who build homes in east downtown.

The Downtown Living Initiative approved by the council grants a blanket $15,000-per-unit tax rebate to developers of the next 2,500 residential units close to the George R. Brown Convention Center, Minute Maid Park and the Toyota Center.

If the average development has 300 units, the maximum is about 8 buildings. I say there are 5 that get built. It'll be nice to have some cranes up for the NBA All-Star game.

[arrodiii]

Hopefully they can get some of the pre-existing dilapidated buildings like the old dry goods building on Austin and the one down the street at Caroline as mid-rises and then start construction on newer buildings near the ball park/GRB

[ttuchris]

arrodiii - what blocks are you referring to on Austin and Caroline?

[arrodiii]

arrodiii - what blocks are you referring to on Austin and Caroline?

Austin @ Texas and Caroline @ Prarie (across from the outreach center)

[kylejack]

But I like the old buildings

Let's get rid of some more parking lots!

[Fortune]

I would like to see some new buildings go up on the empty parking lots. It would be nice if we could get some residential towers like the ones Austin has been getting.

[Fortune]

Talks about some of the plans for downtown residential, the direction they would like it to go.

http://downtownhouston.org/site_media/uploads/attachments/2012-07-31/ULI-Convention_District-TAP_Report.pdf

[lockmat]

Talks about some of the plans for downtown residential, the direction they would like it to go.

http://downtownhoust...-TAP_Report.pdf

I skimmed through this report and think it borderline deserves it's own thread.

Some things that I liked:

• Although the Discovery name is still a little corny to me, it's an acceptable corniness, so I like their desire rename the area from Convention District to Discovery District.
  
  • their quote: One can imagine that locals, and likely visitors as well, would be far more interested in living in or going to an area known as the Discovery District instead of one known as the Convention District.
    

  [*]They are focusing on convention goers, local visitors and region visitors, not out of state visitors, as Houston is not a destination city for tourism.

  [*]realizing street level activity is key to the areas success, that is, if dynamics is the desired end result, and it is.

  [*]they recognize retail creates a great street life but is not the first step; rooftops are.

  • their quote: "Five new residential projects scattered around the study area will have far less of an impact than five new projects focused on priority corridors such as Crawford and Dallas."
    

  [*]a public parking garage. Although if they decided to build one, I'd rather them give money to a developer who is building a project at an ideal parking location to build a larger one so that a garage wouldn't be the sole use of the land it is sitting on.

  [*]their quote: The Discovery District is perhaps Houston’s last, best, chance to bring the pieces on the east side of Downtown together and get it right.

  [*]Their quote: "For Crawford Street, the panel recomments extending the Discovery Green ‘Experience’ as far as possible."

  [*]Their quote, which is KEY for a city like Houston: "The panel recommends the establishment of a parking district within the study area."

Related question. With this incentive now in place, are land owners in this area likely to up their prices since they know there is an incentive to buy there?

[lockmat]

the boundaries have changed, and it seems like 95% of downtown

The new boundary, which doubles the original area, runs from U.S. Highway 59 on the east to Interstate 45 on the south and west, and up nearly to Interstate 10 on the north.

http://www.bizjourna...s-may-lure.html

With the boundary doubled, I know my desires have no bearing whatsoever, but I'm not sure if I'd rather the residential go near DG or be intermingled with the commercial skyscrapers on the west side.

[arrodiii]

For those without a subscription, here is the entire article

[quote name=

Redrawn incentive boundaries may lure downtown developers

Premium content from Houston Business Journal by Shaina Zucker, Reporter

Date: Friday, November 16, 2012, 5:00am CST

SkyHouse, a $65-million project at 1625 Main St., is the first recipient in the Downtown Living Initiative Chapter 380 Program.

Shaina Zucker

Reporter- Houston Business Journal

Email | Twitter

After years of planting the seeds to spur downtown residential projects, the Downtown Redevelopment Authority is finally seeing some sprouts.

Although the Downtown Living Initiative Chapter 380 Program, through which the incentives are funneled, was conceived with specific borders limited to the easternmost portion of the Central Business District, the first recipient in the program is not located within that area, yet will still reap the benefits.

That’s because of an important extension of the program’s boundaries that was quietly decided on Oct. 9. The new boundary, which doubles the original area, runs from U.S. Highway 59 on the east to Interstate 45 on the south and west, and up nearly to Interstate 10 on the north. It includes everything within the Tax Increment Reinvestment Zone No. 3, which has its own incentive, the Downtown Living Program.

If it sounds confusing, that’s because it is. Sources at the authority said they plan to re-evaluate the wordiness of the program to make it easier for developers to navigate.

“If you’re a developer, you just need to know which way to go,” said Bob Eury, executive director of the Houston Downtown Management District. “We can get them to the right entity. The city basically said, ‘Yes, do the program, but we want the cap over both these pieces of geography.’”

At the authority’s Nov. 13 meeting, the joint venture developing the project — made up of Atlanta companies Novare Group Inc. and Batson-Cook Development Co., along with local partner Pete Dienna — not only became the first to use the tax payer-based incentive program, but also the first to take advantage of the program’s new borders.

The $65 million project, dubbed SkyHouse, will be at 1625 Main St. and will have 336 units on 24 stories.

For the JV, this change doesn’t necessarily mean much more than signing a separate document — the tax cap remains the same and the cap per unit does not change. But for other developers, this means more opportunities under the incentive plan’s expanded boundaries.

If there are portions of land that fall within the TIRZ No. 3 district, then it’s likely those parcels will be eligible for the $15,000-per-unit taxpayer-based incentive plan.

Laura Van Ness, director of business development with Central Houston, said there is obviously not much land available in the area around the tall skyscrapers, but throughout the TIRZ No. 3 and the original boundaries of the plan, there could be more land to develop into rooftops.

Houston First Corp. said this week it would market a prime block of land near the George R. Brown for residential and retail development. The local government corporation, which manages the nearby George R. Brown Convention Center and several other downtown properties owned by the city of Houston, controls the 110,000-square-foot tract bounded by Capitol, Rusk and Crawford streets and Avenida de las Americas.

Two historic houses sat on the property until November 2011, when they were moved across the street to become part of the recently announced Nau Center for Texas Cultural Heritage.

The Downtown Living Initiative Chapter 380 Program, which the city passed Aug. 22, is intended to double the number of residences downtown and spur development throughout the area by 2016.