CITYCENTRE: From Mall to Mixed-Use
By: Jonathan Brinsden, COO, Midway Companies
The CITYCENTRE One office building is home to Midway Companies’ headquarters and reached 100 percent capacity months ahead of schedule.
Neglected and obsolete properties are being updated or razed at a rapid pace. Such is the case with CITYCENTRE, a mixed-use development built on the site of a once popular, but long-neglected, indoor shopping mall, with an eye to the future of Houston’s evolving transportation and consumption needs.
We Bought It – Now What?
The Greater Houston region of 10 counties encompasses a variety of townships, neighborhoods, cities and villages spanning approximately 10,000 square miles; an urban area roughly the size of Massachusetts.
Town & Country Mall was built in 1983 and reigned as one of the city’s most popular shopping destinations for years, driven by anchors Neiman Marcus and Marshall Field’s. Its popularity began declining in the late ‘90s and by 2002, the property was mostly abandoned. A nearby outdoor shopping center provided some retail and restaurant options for the area. However, the complex was so large that visitors often actually drove and re-parked from one store to the next.
In May 2004, Houston-based Midway Companies acquired the land beneath the mall with no set plan for it. Knowing it had great potential and was certainly well-situated, Midway’s leadership commenced a months-long investigation studying and traveling to 27 projects in 17 cities throughout the country. Exhaustive residential and business research and feedback eventually indicated that upscale mixed-use would best meet the regional need. Midway had decades of experience in large, ground-up and renovation projects, but this was the group’s first mixed-use project. Still, Midway was confident.
Midway Companies conducted extensive research before embarking on the 1.8-million-square-foot development, traveling to 27 projects in 17 cities through the United States.
“Mixed-use development affords a unique value proposition that we wanted to bring to Houston,” explains Midway Companies CEO Brad Freels, “When combining all the uses, the value can be greater than the sum of the parts. The key is to understand how each component adds value to the others by paying strict attention to customer profiles, service levels, aesthetics and brand positioning.” Although the property is located approximately 14 miles west of downtown, the de facto middle of the city, the team at Midway named the project CITYCENTRE for its location in the actual demographic heart of Greater Houston; the “centre” spelling colloquially refers to a gathering place.
Financing came from near and far, with the Houston office of Capmark Finance Inc. taking the lead in securing a $94-million construction loan through Chicago’s LaSalle Bank Corporation. Brant Smith, vice president of Capmark’s Houston office, indicated Midway’s experience, research and grasp of the effective nuances of mixed-use development were impressive and proved persuasive in forging the finance deal. The property’s location and surrounding neighborhoods’ wealth were also key factors.
In addition to LaSalle, lending was made complete with local Amegy Bank Corp., CitiBank Texas – a subsidiary of New York City’s CitiGroup Inc., and Compass Bancshares Inc. of Birmingham, Ala.
Turn Down the Heat
Committed to creating a true urban district, the Midway team conceptualized the project as a collection of different but complementary buildings with a variety of office and residential options. A myriad of designers and contractors was necessary, with globally-recognized Gensler and Houston-based Kirksey drafting and overseeing the project’s architecture. Design focused on energy standards incorporating high-efficiency glass, drip irrigation and eco-friendly plaza turf. Landscape architects at the Office of James Burnett also took on the task of ensuring that walkability and green spaces maintained priority status.
The Domain Apartments at CITYCENTRE include 370 units that were 100 percent leased within one year. Urban lofts and 35 brownstone townhomes are also part of the residential component.
Careful consideration was taken with building placement to incorporate patios and terraces aimed to provide a synergistic impression throughout the district. Thought was also taken to avoid trendy architectural traits, giving the district an overall modern feel without alluding to any one style. This timeless design enhances long-term value and integration into the project’s surrounding areas.
Another crucial aspect of creating a truly walkable environment was finding a way to stave off Houston’s notorious heat during the summer months. Midway worked with architects to incorporate as many shaded areas as possible via trees, overhangs, arbors and strategically placed walkways, set where the sun would naturally be behind a nearby building some or most of the day. Finally, CITYCENTRE’s central plaza needed a cooling mechanism — a problem the project’s architects solved while designing the district’s onsite hotel. Hotel Sorella was built above the retail spaces lining the plaza’s western perimeter, providing a monolithic, 13-story shade over the area every afternoon once the sun ducks behind it. As the hotel’s lobby is on the second floor, a large geometric staircase encased in glass with open-air walkways on either side was built to serve as a focal point entryway for the hotel. An intended benefit of the open-air space on either side of the staircase is a wind-tunnel effect in the development’s adjacent plaza, thus mitigating the heat.
With plans for such high-capacity on a relatively small parcel of land, parking was a major priority. Fortunately, the demolished mall left behind three large, multi-story parking garages strategically placed throughout the property that were still in decent condition and could be renovated in lieu of building new ones. Refurbishing these garages afforded Midway additional flexibility in the development program.
Walkability and green spaces are key elements of the project for visitors to enjoy weekly events and entertainment offerings such as Studio Movie Grill, an eight-screen cinema with a full bar and commercial kitchen.
General contractors Burton Construction, Tribble & Stephens Construction and Chambers Construction took blueprints of the rest of the build from concept to concrete. Structural engineers Haynes Whaley Associates and Garza & McLain Structural Engineers, plus MEP engineers from Bill Thompson Company, rounded out the roster working on the project’s commercial construction.
For the residential side, Midway developed The Lofts at CITYCENTRE, while local Simmons Vedder & Co. and McGuire Homebuilders Inc. built the district’s multi-family complex, The Domain, and freestanding townhouses, The Brownstones, respectively.
Midway maintained control of the project’s retail and office development with Page Realty Partners Ltd. in Houston overseeing the retail pre-leases and Colvill Office Properties, also based in Houston, managing the task of pre-leasing office space.
Midway’s Vision: From Concept to Concrete
Upon its debut in late 2009, the 1.8-million-square-foot CITYCENTRE boasted:
- 400,000 square feet of upscale retail, restaurant and entertainment space;
- a 149,000-square-foot flagship urban fitness facility;
- 225,000 square feet of Class A office space divided into two towers – CITYCENTRE ONE and CITYCENTRE TWO;
- 370 multi-family units; 250 urban lofts; 35 brownstone townhomes; and
- a 255-room luxury hotel topped with long-term luxury condominiums.
The development has proven quite successful winning several design awards and has become a true restaurant and entertainment hub for the immediately surrounding neighborhoods and beyond. Within one year of officially opening, residential rental capacity hovered around 100 percent and office capacity reached 100 percent, well ahead of schedule in early 2011. An eclectic combination of premier locally-owned, regional and national brands fills retail and restaurant space.
“The leasing velocity we’re seeing is pretty incredible in a down market,” said Colvill Office Properties leasing agent Michael Anderson, explaining the popularity with potential office tenants being, “so much more than an office building and a garage…it’s a place people want to be with shops, restaurants and entertainment, plus a luxury hotel, a fitness club and living options for employees.”
Design focused on incorporating high-efficiency glass, drip irrigation, eco-friendly plaza turf as well as trees, overhangs and arbors to lessen the summer heat.
After decades of car-centric trending, Houstonians are now embracing walkability and one-stop shopping. Indeed, the district provides a gathering place and entertainment site for area residents and visitors alike, but that’s not all. Juxtaposing living, working and playing in one tight area significantly minimizes traffic by reducing trip generation. Midway’s vice president of development, Shon Link, conducted studies based on occupancy numbers and average consumption rates. He estimates that if just half of the project’s office professionals stay in the district to eat lunch, shop or workout on a daily basis, approximately 1,600 gallons of automobile fuel will have been conserved each day, adding up to 416,000 gallons per year.
In September 2011, Midway Companies announced that a partnership formed between Midway, LaSalle Investment Management and the Alaska Permanent Fund Corp. The group had purchased the second office building with plans for Midway to remain the property’s general partner, asset manager, property manager and retail leasing manager. The partnership will also continue to develop a third 120,000-square-foot office tower currently under construction on the district’s western edge. The new building, overseen by project architect Kirksey and Hoar Construction, is already 62 percent pre-leased with an expected opening date of summer 2012.
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