News | Big Energy Corridor project set
January 17, 2014
By Nancy Sarnoff | Houston Chronicle
One of the early real estate developments that helped shapeHouston’s Energy Corridor on the west side of townhas been sold foramajor redevelopment project that could include multiple high-rise office towers, a stylish hotel, luxury apartments, and shops and restaurants inawalkable, urban-style environment.
The plan to remake what is nowthe Exxon-Mobil Chemical Co. campus south of Interstate 10 and west of North Eldridge Parkway could result in a billion-dollar investment over the next 10 years, according to PM Realty Group, which is leading the redevelopment of the 35-acre property.
The project will have some similarities to CityCentre, a densely packed mixed-use development on 37 acres at I-10 and the Beltway, and The Woodlands Town Center north of Houston. “It will have a strong sense of place,” said Dan Leverett, executive vice president and managing director of development for Houston-based PM Realty, whose financial partner on the project is Atlas U.S.A. Holdings. The heavily wooded property is sandwiched by the 500-acre TerryHershey Park on the east and the sprawling BP campus on the west.
“You don’t come by sites like this very often,” Leverett said, explaining that the new project will adhere to design principles that focus on “walkability and connectivity.”
Leverett said he expects the trees along the park, Memorial and the lake on the property to be saved. Those in the building area will be taken down, but many will be replaced, as the plans calls for a heavily landscaped design.
The site at 13501 Katy Freeway is in the heart of the Energy Corridor, the stretch of I-10 lined with some of Houston’s biggest oil and gas companies. The area is the third-largest employment center in Houston with more than 78,000 workers, according to HFF, whichmarketed the property for sale. Some of the largest companies include Conoco Phillips, Shell and BP.
Office buildings in the area are bursting amid the thriving economy, and builders have been putting up more to meet the demand for space.
“That westside has been ground zero for everything that’s happened in Houston for the last decade,” said Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston.
An unprecedented expansion in oil and gas drilling between 2002 and 2012 was a huge boon to Houston and this part of town, he explained. But the tremendous growth in the energy industry is moderating.
Drilling activity, considered part of the upstream sector of the energy industry, has slowed. The growth in part, Gilmer said, is being replaced by the downstream elements like refining, which are concentrated on the east side of Houston.
“That west side of town,” he said, “will necessarily not be as strong as it has been.”
The new development, still in the early stages of planning, could include multiple high-rise office buildings comprising several million square feet, as well as apartments, retail space and a high-end hotel with as many as 350 rooms.
The low-rise, 332,000-square-foot office structure now occupied by ExxonMobil Chemical likelywill be torn down, but a smaller conference center on site is expected to be retained and combined into the new development. It would connect to a full-service hotel with additional conference space. The hotel’s address would be on Memorial.
Nothing is expected to happen on the site until next year, atwhich time the chemical company plans to move into the 385-acre office development being built for Exxon Mobil Corp. near The Woodlands.
Leverett, who worked for the Woodlands Development Co. for many years before joining PM Realty in 2012, said the new development will emphasize serving the corporations that occupy space there.
In that sense, the retail options will focus on restaurants and services that an officer worker would need.
“We’re really interested in focusing more on corporations and their needs and in putting the type of retail that will serve them,” Leverett said.
No ‘cookie-cutter’ feel The project’s design will have the pedestrian in mind. A large investment, Leverett said, will go into benches, street trees and other landscaping.
“It’s not going to feel cookie-cutter,” he said. “We intend to use some of the best land planners and architects in the United States.”
Built 34 years ago The ExxonMobil Chemical facility was built in 1980. In 2003, a 20,000-square-foot conference center was added to the complex.
It was in the early 1970s that the Energy Corridor took root as some of Houston’s growing companies began considering suburban campuses to house their expanding employee base, according to the Energy Corridor’s management district, which coordinates public and private investment in the area. Shell Oil Co. and then the predecessor of Conoco Phillips led the waywithnew campuses along I-10.
Aside from being in one of Houston’s fastest-growing markets, the Exxon Mobil property “is one of the few remaining large tracts available and equal in size to CityCentre,” Rick Kirk,PM Realty Group’s chairman and CEO, said in a statement.
PM Realty is a privately held commercial real estate firm involved in property management, leasing and development in 30 markets. In Houston, it is developing a 40-story multifamily building at Weslayan and Alabama, and 1.5 million square feet of office and mixed-use development in core areas.
The Houston Chronicle, January 17, 2014