City of Dallas & Site Visits

City Hall with Mayor Leppert, Dallas, TX

Aloft Hotel, Dallas, TX


Craig Ranch, Mckinney, TX



8:30am-City of Dallas

Our journey has taken its last stop, the great Dallas, TX...home sweet home. We had the opportunity to meet with Mayor Leppert and various city officials to gauge how Dallas did things different from the other major MSA's in the great State of Texas.

Parks & Recreation Director, Paul Dyer
Mr. Dyer emphasized the importance and impact the decision to commission a Master Plan in 2004. The Belo Foundation donated $400,000 of the $1.5M for the MP drafting.This has proved to be very beneficial for the City in recruiting new companies and an enhanced downtown and surrounding area. It is very tough to have the 15 council members, all from surrounding districts (non-CBD) to agree with the plan to revitalize the plighted areas of downtown, and include the expansion/upkeep of the parks system. Dallas was the first city to branch out and purchase urban land for plant and parks usage. So with that, the sense of urbanism has always been in the back of the city's mind, and they have strategically positioned themselves to use whatever means needed to expand the greater need of the taxpayer dollar. Mr. Dyer touched extensively on the use of eminent domain for condemnation of land through the "Trust Republic Clan," and it's effects when building landmark projects like the bridge across, and the 6-acre Woodall Rogers Deck Park. With the deck park, there are NO taxpayer dollars being utilized. The funding structure is as follows: $106 total project cost, of which $20M is from Dallas City Council (bonded), $20M State STEP funds, $ 16.7M Fed Stimulus funds, & $53M private equity donations. Amazing! The fair park and south Dallas corridor is the next phase that needs to be concentrated on, and the city is giving incentives and encourages public-private partnerships if a feasbile project is presented. He mentioned that the Deck Park will work with ground leases, and all of the establishments within will have specific building code requirements.

9:30am- Mayor Tom Leppert

Through John's amazing networking, we had the honor of meeting our most respected guest on the trip yet, Mayor Leppert of the City of Dallas. Mr. Leppert spent a great deal of time touching on the subject of sustainable development, and with his background as a CEO of a national home building company. He is a noteworthy source to listen to. He mentioned that 40% of the energy the City of Dallas uses is wind energy, and stressed that we have the largest alternative energy city government fleet in the state of Texas. He is working directly with real estate developers and professionals to have all new construction mandated to green standards within 10 years. The city currently works hand in hand with homebuilders and the AHA to implement water & energy efficiency standards. An interesting note he mentioned was that LEED was the first privately funded movement to promote sustainable energy, whereas the public sector is greatly credited for it. With the city's "Vacant Building Initiative" the city can send a swarm of inspectors and code officials out in the streets to enforce and spot out problematic areas, and through a series of these, the end goal is to eventually have the all of the unsafe older buildings up to code. There is a very big need to push for the productivity and expansion/redevelopment of the southern sector of the city, and the Mayor is pushing bravely at doing so with a grounded approach. Mayor Leppert handed it over to the Sustainable Development & Construction team.

10am- Sustainable Development & Construction

Since the 1960's, housing development has usually pulled the Dallas market out of recessionary periods, and today's picture is a complete 180-turn. In 2009, the city issued a mere 700 building permits, down 75% from a few years back. The only projects that are going on currently are public projects, that may have a private backing. The "Forward Dallas" vision has surfaced the need for redevelopment instead of a greenfield development vision. It focuses on creating jobs in high density, redveloping infill areas like the CBD and surround areas. All other major hubs are being targeted also, especially the "Five Points" area which has become the premier hangout for notorious drug dealers, crime, & prostitution. The issue of homeless population came up, and Dallas has 6,000 as per the latest count. Many suburbs send their homeless over to Dallas with a "one way bus fare," knowing that Dallas has more resources to deal with the needs of these people. The Dallas Bridge Center and other projects similar to it work as a supportive housing/shelter for homeless, but there is still not enough donation to clear all of the homeless off of the streets. Permanent supportive housing is similar to what the New Hope Housing projects does, and could be retrofitted into staged development scheme in Dallas. Central Dallas Ministries is another organization that helps reproduce the homeless population that have gone through many issues.

11am-Dallas City Design Studio, Carl Zevenkowsky & David Whitley

This is a new department housed in City Hall, and was created to assist the city in creating a new design concept for public projects like the M-Bridge and the Deck Park. The focus now is on the urban growth across the Trinity River after the bridge comes through, and working with local residents and city officials to keep everyone feeling connected. The staff of highly qualified designers and conceptual thinkers had a great wealth of information to give us. They mentioned how they are promoting and assisting the likes of Phil Romano to develop the 80 acres he has bought across the Trinity, and Brady Wood, who is lobbying for TIGER grants and the passage of the Streetcar idea to connect all of Dallas. There was extensive talk on the block 108 HUD loan being used in the land assembly across from the VA Hospital Dart Station. The CDRC is a project that Mr. Zevenkowsky really concentrates on, and feels can stimulate an economy in times like this. In conjunction with the US Immigration Dept, the City of Dallas has created the EB-5 program that allows a foreigner to invest $500,000 into a business venture that creates 10 jobs, and if after a few other minor stipulations, they can receive their US citizenship. A very nifty program that gets me thinking about sourcing capital from my dispersed family members around the world!

There was a wealth of information taken in from the meeting with the City of Dallas, and it was an amazing opportunity to get in contact with the people that are making our great city work (sorry Ft. Worth, ha!) We walked over to the Aloft Hotel after the meeting , and had lunch there before meeting with the owners and operators.


1:30pm- Aloft Hotel, Suhas Naik, Ted Hamilton & parnters

The Aloft Hotel is like no other limited/mid-tier hotel I have ever seen before. This flagship is a product of the Starwood Hotel group, better known for it's big box flags like Westin & Sheraton. This specific property was a joint venture with two very experienced groups involved in real estate development & redevelopment. Hamilton properties has done a handful of adaptive reuse projects in the Dallas CBD, and has a great working realtionship with the City of Dallas and Suha's team. The site was built by the Santa Fe Rail Co. and later used as the Haggar Clothing headquarters and manufacturing/distributing plant. The team bought it in 1998, and started developing the project only a few years ago. The project was made possible, according to Naik, because of the historic tax credits and TIF money. The property is 193 units, the largest Aloft in the Starwood family, and has 8,000sf of meeting space that is leased out through a third party firm. They are currently at a below proforma ADR, and occupancy is right around where they projected. But the name of the game, according to the property manager Janice Properties, is keeping a stern rate. Once the rate dips, it takes the value crashing down. The construction of the proerty was $175,000 a key, and the 9th floor was added. A total of 2 1/2 acres were utilized in the development. Apart from the $5M Historic tax credit, $4.2 was funded from TIF, and $5M was equity. The rest is debt with Hillcrest Bank, a local bank. They had about $150,000 of remediation costs, relatively small for a grand project like it. We got to tour the ultra-chic and lofty hotel with the flamboyant sales guy, and it was indeed a very unique adaptive-reuse. All in all, the project was designed with great detail, and will be a great investment if they can make it out of this downturn and also feed off of the convention center hotel once it opens.


2:30pm, Craig Ranch, David Craig, Founder/CEO

Again, through John's amazing networking skills, we were able to meet with a very well known developer. Craig Ranch is a massive master planned community positioned in one of the strongest growth markets in the country, Mckinney, TX. The 1125 acres has a current use of office, retail and residential, along with a school system and parks & recreation. The new urbanist vision Mr. Craig caught on to a few years ago was the result of a trip to the ULI meeting in Toronto. The TPC Craig Ranch is a partnership with some of the greatest golfers in the world, and has proven to be a very popular choice for local and national golfers. The development was envisioned through a byproduct of a TIF, called a 380-agreement. It is specific to the Craig Ranch boundaries and entails a very attractive opportunity for the developer and the city. All impact fees are waived, and a lot of public/private funding of infrastructures has made the street scape of the community very beautiful. Mckinney has benefited from approximately $22M in tax revenue from the project alone over the past 9-10 years. The funding for the aggregate land assemblage is in part by Craig himself, and also a silent majority investor from Kansas City, also one of the largest car dealership owners in the nation. The Director of Development at the City of Mckinney gave us insight on how they have been working with David Craig on this project, and the outlook and positions they are holding for the future. The city has entered into a partnership with Craig on the Baseball/Softball and playing fields in community. The CCNR, or building code regulation specific to Craig Ranch, is a vital tool to keep the homogeneity of the project after selling tracts to other builders. The biggest ounce of wisdom he had to share with us is that you have to be flexible and let the market make decisions in times like these. The partnership seems to have gone through a lot ups and downs, but the strong relationships will drive this project to success over the long haul.


Its a wrap!

Houston Site Visits Day 2

Bray's Crossing


Canal St. Apartments

City Centre Houston

9am-2pm, Bray's Crossing, Joy Brown (Director) & Nicole Cassier (Fundraising) at the New Hope Housing Foundation

The drive up appeal on the first project of the day was refreshing. With the tenant mix we saw just before entering the project, we could bet it was one of those affordable housing tax credit programs, with an extra touch of facade & color scheme design. We soon found out that it was much more than just an extra touch, the non-profit firm backing the movement was the first of it's kind in Texas to take advantage of tax credit developing, but has ever since been the benchmark. These two wonderful ladies gave us their morning and lunch time to offer information on the mission of the foundation, and the product they provide.
Bray's Crossing is a form of supportive low income housing, funded through tax credit financing, donations, and HUD financing (Houston HOME funds). The project is an adaptive re-use of a very problematic property the city just wanted to clean it's hands of, and virtually gave to the foundation. With 149 units, the property was reconstructed from the exterior, and remodeled from the interior, for $14M. The "sound wall" is a very interestingly designed metal mural that has significance for those tenants within the property that are going through rough times and need motivation. since the property is a rehab, an elevator was not required to be put in. The aesthetic qualities of the property make it a very homely place to be, with the interior corridor's water fall, and the lobby area reclining room, library, kitchen, or computer lab; all secured by a 24hr watch desk. Since many of the tenants have prior histories of drug usage and crime, New Hope really monitors the inflow/outflow of people. The project is fairly new, and has leased up to 14% for the short time it has been ready. There is a $6.1M tax credit on the project, with the rest being funded by private donors. Leases are usually 6 months in nature, but can range anywhere up to 13 months, truly a product of how stable the type of tenants are in general.

Our next stop was the Canal St. Project, a New Hope property that was built in 2005, and has 133 units, fully stabilized at 100% occupancy with a 3 month waiting period. The project has similar common areas and atmosphere as Bray's, but is a few blocks into the warehouse district and has a more open interior feel. There is an award winning Japanese garden setup in the middle, with a very detailed fire-glass window above the fron tdoor. The natural lighting in this property, along with Bray's Crossing, is phenomenal.

Joy and Nicole were so kind to treat us all to lunch at the original Ninfa's restaurant, a Houston landmark. I must say, they were pretty busy, and the Fajita Chicken Salad proved why their business was so good. Ultimately, the New Hope Foundation is setting the benchmark for the standards and qualities developers that use tax credit financing should have (many build and jet with hefty development fees).

2pm-City Centre, Brandon Houston with Midway Companies

First off, Brandon is the great great great great nephew of our state's founder, Sam Houston! Midway Companies is a firm that has it's roots in Dallas, and follows a lot of what Tramell Crow did in the hay day of building and acquiring. City Centre is a regional hub, in that apart from the Galleria and ancillary power centers around town, it is serving to be the first mixed-use development of it's kind in Houston. The 38-acre property was the site of the original Town & Country Mall, a Memorial area and Houston area destination for decades. With the amount of trouble they were facing, the mall was bought silently before it hit the market for $30M, an extremely low basis for Midway Companies. The location is so strategic that 2M people can access the property within a 20 minute drive, wow! 28-acres have been developed by Midway, and another partner has executed their option to buy the rest. The only thing that remains from the mall is the 3 parking garages, which got facelifts and were the focal points of position and platting out the master plan. The hotel tract was sold off to a boutique hotel group which has built a 244 unit property on the site already, and has an all equity position. It works a great synergistic force with the project with it's strategic positioning.The financing structure is a very interesting, in that it is 60% funded by the Michigan State Teacher's Fund, and the remaining 40% of equity is funded by HNW individuals. There were TIF funds all along, but Midway did not utilize them. They regret it now, as the infrastructure has cost more than they imagined. There is also no City of Houston public-private partnership agreement with the project. Currently, retail is 60% leased, Office Bldg 1=100%, and Office Bldg 2=70%. Residential rentals are at 72%, with an effective rent at $1.45psf. In retail, it is $35psf+NNN, and office is sitting around $22psf. No aspect of the project is LEED certified, but has been built with utmost care and quality, so if they were ever in need to do so, it shouldnt be an issue. The justification used was that with multi-tenant office buildings it is pointless to attempt to incur the costs of re-framing every tenant's mindset into being "green," whereas if any building was single-tenant, it is a lot easier to pass LEED as needed. Office space has many incentives, with Midway offering $30-$50 in TI, and 3-5 months of concessions on 7 year leases.
Brandon shared the importance of being creative, and delivering what the market dictates your project to deliver. The importance of not taking no as an answer is also vital, in that they would'nt have had the success of this project if they didn't stay persistent with offers for the mall. Overall, this project reminds me a lot of a Park Lane type of development with more space. It will bloom to be a powerhouse for tax base income for the City of Houston over the years, and will be an iconic property for those who plan to develop anywhere in the mixed-use arena.

This wraps up our trip to Houston, and John and I are back on the road after a bit of fun at Yardhouse!

Houston City Officials & Day 1 Site Visits

City of Houston Green Building Resources Center


Gables West Ave., Westheimer & Kirby

The CORE on Washington St.

9am, Houston City Planning & Development Services Office

After a long weekend, out trip is back in full gear, and this time we are going to the enchanted land of no-zoning and the epitome of uncontrollable sprawl. Going into the meeting with the City Planners there was doubt in my mind that they would be able the justify any appeal to being in Houston as a real estate professional. This quickly changed after speaking with these sharp guys and gal for our first meeting of the day.

Richmond Coward, Planner
Brian Crimmons, Planner
Ryan Albright, Sr. Planner (Hotel/Motel & Land & Parking)
Marlene Gafrick, Director

The topics covered were simultaneously touched on by each of these individuals through our Q & A format.
Diving into the material, the team mentioned how platting is the backbone of development in Houston. It is implemented though city code Chapter 42, and is considered their bible according to them all. Logically, densifying is important to reduce the sprawl, so that type of development is being promoted by the city a lot more. The second book of commandments comes from Chapter 26, the parking ordinance. Parking is a very important issue that needs to be addressed in Houston, and is taken very seriously on the city's agenda. Beyond the city lines, all of the surrounding cities that have taken their roots through sprawl are still covered in the ETJ (Extra Territorial Jurisdiction). The City of Houston does not provide infrastructure for those cities that choose to prop up too far for the city to deem feasbile, and this detail alone is probably going to be the biggest driver to dis-incentivize developers from sprawling too far. Chapter 42 has no height restrictions, as you can see clearly with skyscrapers outside of the CBD being bulid next to one story establishments. Constant amendments to Ch. 42 are being made, all in attempts to reduce the sprawl. Since there also no true development impact fees, again, the only thing holding developers back is the cost of creating a city within a city (road,utilities,plants, fire/police tasks, etc). TIF districts implement zoning in their interesting way, only in that they require certain restrictions on building styles, not as much uses.
As we wrapped up discussions with the City Officials, Richmond Coward kindly escorted us a few blocks down, via train, to the Green Building Showroom at the Code Enforcement Office. This showroom is one of a kind, and we had the honor to speak with the brainchild and director himself regarding what it's purpose and qualifications were. The showroom received a LEED Gold Interior designation recently. The showroom simply consists of green products from vendor's that are actively manufacturing/distributing these materials to the construction community. An interesting fact to not was that all of the tables/furniture was reused, from old libraries all the way to ex-Enron office space flooring. In putting the conversation into perspective, it clearly looks as if the LEED system is in it's infancy stages, and until the program becomes the industry standard, purely through increased demand and higher manufacturing volumes (lower costs), it will be hard to sell this slightly more more expensive material to those builders that are especially hurting right now. For those ahead of the curve and that are well capitalized, it is very necessary to take the costs at onset, and realize that the payback will come soon, but the real value lies within the reversion when everyone is LEED certified and you won't have to worry about discounting your property.

1:15pm-West Ave, Gables Residential, Josh Landry & Ben Peaceglock, Developers

If you are talking about the most valuable and largest contiguous land assembly in the affluent River Oaks portion of town, Gables has gotten their hands on it for a massive MF project. Through an RFP, the firm was granted the contract to construct this 397 unit project with all rentals, something this submarket has not seem. The approach is similar, in that they use their "EPN" theory (Established Premium Neighborhood) to target high density, high income, and primarily single family residential areas to place their product. Inherently, this attracts those who want the title of living in "River Oaks." At an effective rent of $1.65psf, they are charging a hefty sum for some lavish living. The duo of developers gave us a great breakdown of the property and it's amenities with a tour and video session. With a very chic and urban loft type of atmosphere, the trendy designs of the property, similar to other Gables projects, stands out tremendously. A big blow to the project for future value is that the tract directly across the street is a high rise condo, which was built after,completely impedes in the view of Downtown Houston. With the ground 2 floor retail, the project has taken a big hit. Only 41% of the space is leased, but far less is occupied and producing income streams. The second story retail space is actually escalator accessible, and can be used as flex space for either retail, office, or in the last case, more apartments. Overall, the project will flourish as the markets clean up, and it is largely due to it's appealing location and proximity to all major thoroughfares around the downtown area.

2:30pm- The CORE-Micheal Morgan, Principal of The Morgan Group

Situated on the old Washington St. corridor, and area mostly regarded as plighted until the recent revival of it's nightlife scene. At The CORE multifamily development, we had the honor of meeting with Mr. Morgan, the fine gentleman who created the project and many more like it around the country, primarily focusing on Houston. Born into a family of real estate investors/developers, and to a father that whethered the Holocaust, Mr. Morgan is a hard nosed conservative value driven human. He prefers to take the slow growth model and shift risk to others, and that is simply why he hasn't done an overly flashy product yet. He is very akin to providing what each market needs and can sustain on a consistent basis. His fundamentals have gotten him here, and he is going to ride with it until the end. The CORE is a loft type project, similar and in competition with the project we just saw earlier at West Ave. Mr. Morgan has experienced a greater response and is sitting at 98.8% leased on the 326 units, with an effective rent of $1.40psf, above what his proforma predicted. The lone strategy that stuck out most to me is that all of the loans he receives are different in terms, but never does he sign a personal guarantee on these them. He sets aside a fixed amount of assets/cash in a "Guarantee Corporation," and signs all of his loans against that. To him, he has already written those assets off as gone, being a forward thinking and conservative nature; and if it is there at the end of the day, then he just done an even better job at what he does. For the CORE project, he had to make 4 offers before landing the deal. Exposure & Accessability are vital to projects, and all of his work has been on tracts of land that form major streets. The subject site was a brownfield railroad tract, and had to have ground water remediation before anything could be constructed. Mr. Morgan was so kind to sit down with us and give us a full breakdown of his capital stack and deal structure, along with proforma insight and current performance history. In his many years in the business, he has gained a great repertoire with wealthy equity sources like Archstone-Smith REIT, and JP Morgan Chase on the debt side. With a basis of only .5% of the $45.4M project, he has the confidence of his partners in this project and is others, and is proving himself once again with this amazing property.

San Antonio Site Visits!

(Day 1)

(Day 1)

Friedrich Lofts (Day 2)
Freidrich Lofts (Day 2)
Alamo Architects (Day 2)
Marty Wender's Office (Day 2)

San Antonio River Authority Tour (Day 2)

1221 Broadway, failed project started by George Geis

Driving into the San Antonio CBD, there is a handful of concrete frame buildings sitting unfinished on the corner of Broadway,IH-35 & Hwy 37. An overambitious builder took it upon himself to act in his deceased architect's interest, and stamped the the project to start. Going into construction post 2002, the general contractor Andres Construction Co from Dallas recognized a $750,000 cost that would have to be accounted for due to faulty architectural plans. The project was in multiple lawsuits over past few years, and ironically Ed Cross, the gentleman we hear about earlier in the day at the City meeting took over. We are also meeting him at his newest project in downtown, The Vistana. He is slating to start construction in the next few weeks and can hopefully turn the project into something income producing.

The Vistana, Ed Cross, CEO of Cross & Co.

Downtwon San Antonio has never seen anything like this before. Quite frankly, anything new in San Antonio seems to be a hit, but this one is different. Directly across from the Christus hospital system in the CBD, Mr. Cross has developed a massive 247 unit MF project to cater to the fresh young population that has been waiting for something like it. The project covers a whole city block, and has 530,000sf. Property was originally slated as a parking garage, as Ed thought that would be highest and best use. As we all saw, at 96% leased, there is no doubt that this practical project kept all of it's tenants in mind to serve them the best way possible in downtown San Antonio.
The loft style apartments give a "wow" feel as you walk in, and according to Ed, that is exactly what he wants his tenants to feel. With granite counter tops, high end finishes, and great storage, the units are an ideal size range to fit the needs of a wide variety of people. The 3 story Tower Suite rents for $7k/month, and is the most distinct part of the project from the exterior view.
The retail space is actually slow to pick up, and given macroeconomic conditions, there is nothing slated to come in as of right now. The rooftop pool, grassy area, common area meeting room, and extensive storage all make this project the ideal place to live close to work and play. With a low fixed rate debt structure from a life company, Ed has been able to whether the storm, not to mention his partner is a local Billionaire!


Freidrich Lofts (Old A/C Plant), Patrick Sherear, Broker/Principal at Cambridge Realty

Talk about adaptive re-use. This massive warehouse/plant was built in the 20's, and sits west of downtown across the highway. The project was entered into about 10 years ago, and had initial financing troubles due to it's nature and the vision of re-use in those years not being forward thinking. The property falls into a TIF district, Empowerment Zone, and has received new market & historic tax credits, overall, still a small portion of the capital stack. Remediation has been done for parts of the building, and a majority of it is still vacant. Only 20,000sf has been leased to small businesses (approx. $15psf), and with the $ incentive of employing more people to obtain Empowerment Zone money, they are aggressively trying to lease office space. The acquisition basis in the project was tremendously low, and is seemingly the only reason the current owners are surviving the stage of the project. Overall the vision is there, and the sub market will slowly catch up to it to eventually give a premium on the subject.

Alamo Architects (headquarters)

The drive up appeal to this property is quite interesting in that it is a historically light industrial area, now seemingly dilapidated except for this single property. We had the honor to meet with one of the principals of the firm, along with one of his staff architects, and obtain a tour of the how they achieved LEED Silver status.
Reuse was a big point accumulation area, in that concrete slabs used during redevelopment were from the excavation of the original property. Also, the ceilings were removed, and many of the wall partitions were torn down, giving the office an open air look now, with continuity. The rainwater collection system from the roof is a very distinctive feature, in that it collects the water, stores it in a tank, and reuses it as needed. This system is integrated with one other that collects water condensation from the A/C unit, and stores up to 70 gallons on any given good day (150 ton unit).
Relative to their prior office space, this new building is larger, but consumes 20% less energy/utilities. All in all, it seems as if the LEED Silver has gotten them ahead of the curve.

Marty Wender, CEO Charles Marin Wender Real Estate

Can we get a more vibrant and successful land developer/assembler than this? Mr. Wender has been doing what he has been doing for 30+ years, clearly a seasoned pro in the San Antonio, if not the primary go to guy for any large scaled development in the city. In his Master Planning tenure, he has sourced land for projects for companies like Sea World, Hyatt, NSA, Microsoft, and many more. Marty was so kind to provide lunch at his office for our crew.
Marty gained a lot of notoriety for his ability to deliver, and as one company would bring their firm to San Antonio through him, he started to see the domino effect start to occur as San Antonio started becoming a westward bound booming population. As the land developer, he is required to build the infrastructure and works needed to connect his tracts of sold land to utilities, access points, and everything in between the road and power lines.
As a positive personality by nature, he promotes getting through adversity and touch problem solving situations by being on the offensive for the answer, instead of folding in. His wisdom stems from college days when he took a logic course, one he recommends to all.
To Mr. Wender, in a world of givers and takers, you've always got to find a way to give more back to sustain your presence in the community. As a salesperson by trade, his approach to pitching aggressively and catering to client's needs immediately without quitting is the cornerstone of his success. The story of when he insisted on loading up Ross Perot Jr.'s Gulfstream with San Antonio's famous Rudy's BBQ, right after they had a meeting with the Hillwood team regarding a deal he needed closed was just the prime example of catering to clients' needs. Mr. Wender doesnt know if this action led them to land in Dallas, and immediately call him to approve the deal, but was sure it had some weight.
Specific to San Antonio, Mr. Wender touched on the areas that can and cannot be developed from a simple feasibility measure. The "recharge zone" is an area that does not allow proper drainage and access, making it the most prime land to the northern side of the city that couldn't be utilized.
As he mentioned on and on again, "time is the enemy of any deal, it can make or break you." This wisdom is long regarded as one of the most repeated by real estate moguls alike around the world. In what has become a product of his own doing, Marty's biggest project to date is the MP Community of Westover Hills. Over the years he has gotten growth in the area with the relocation of USAA's 18k employees, Microsoft's facility, and the UTSA Main Campus (approx. 26,000 students), all contributing to ancillary development in the surround area.
Mr. Wender gave us great wisdom, and told everyone to follow a mentor that really stands out to you, and when you do make it in the real estate world, don't forget to give back to the future generations like he did while speaking to us for a whole afternoon.

To wrap up our trip in SA, we stopped off at the Pearl Brewery to meet with a gentleman from the San Antonio River Authority. This portion of the San Antonio River is a newer portion that has been developed by releasing vagrant inhabitants and expanding the landscaping/amenities. The 1.3 miles stretch we walked encompassed calm views and less hustle and bustle like the Riverwalk drag in the CBD. Locals can enjoy access to a quiet part of the walk without running into a plethora of tourists at all times. Great vision, and great extension of it.

This essentially wraps up the San Antonio portion of our trip, now back home to the Big D!

San Antonio Day 1- City Hall

9am-11:30pm-San Antonio One Stop Shop

Refreshed and ready for the next stop on our tour: San Antonio, TX.

We were welcomed by a sharp set of government officials, and starting the interaction was David McGowen & Jesus Garza. Mr. McGowen touched on how the city is heavy on historic preservation along the river, and has been working outside of downtown to "blockbust" and break up plighted areas, while attempting to expand the healthy neighborhoods. Approximately $300M of Federal Stimulus funds have been secured by San Antonio, and they look to implement the spending to redevelop over the next 5 years. Mr Garza revealed that land use management around the current military bases is a vital topic on their agenda, primarily implemented as a part of one of the "sector planning" approaches by the city. West San Antonio has experienced an immense amount of new development and sprawl, and will be the area for new growth for the next 30 years, says Garza. Inner city re-developers are needed to stimulate the plighted CBD and surrounding areas, and to date, there hasn't been more than a couple developers interested in building mid-rise/mixed-use developments. The city provides a few incentives for inner city redevelopment, such as waiving of all city fees and providing the comprehensive "One Stop Shop" to expedite the re-development process. The form based zoning is implemented through the SMART program to replenish the inner city. An interesting fact to note: San Antonio has 2x the population of Austin, and 1/2 the GDP output=High Skilled workers needed. There is a PID being implemented in downtown to clean up, maintain, landscape, and pay for the "Amigos," who are guys that help tourists find where they're going.

Transitioning into topics covered by the architecture department, we got a visit by Betty Feldman, the City Architect. She gave us her vivid background in a brief bio, and dove right into current projects and regulations/directions the city has to offer. Her position on the failed 1221 Broadway project was indeed interesting. Since his project went under, a popular local developer by the name of Ed Cross has since taken control of it. Feasibility was the biggest issue for Geis's project, and hopefully Ed can turn the concrete slab around into something income producing for both the city and himself. Her efforts of current have been directed to building out accessibility/growth to the Ft. Sam area, as the US Dept of Defense recently transferred the whole medical services training professional facilities over. Her attempts to use TIGER grants to create and extend streetcars over to the Ft. Sam area have also begun, and it seems her tenacity will land great results for the City of San Antonio. An interesting characteristic to note is that just as Austin, with it's Green Building Code, San Antonio has adopted a similar uniform code called "Mission Verde." The city ordinance identifies sustainability standards (similar to LEED characteristics) and pairs is with historical preservation requirements (very stringent). As we wrapped up the discussion with Mrs. Feldman, an active mid-aged gentleman strolled in with a bicycle helmet on, attempting to catch his breath.

This was Lawrence Doxsey, Director at the Office of Environmental Management. He brought a wealth of energy and information on all facets of sustainability. He advocated the PACE (properly assessed clean energy) program, and gave us insight into how the city is involved. The city has bonded the program, and loans the money back out to homeowners willing to retrofit things in their home that promote sustainability. The program helps to incentivize private banks to loan due to the city's insurance (usually 15yr terms). He mentioned that 91 of the city's fleet are hybrid vehicles, and that the garbage fleet is fueled with compressed natural gas. To wrap up the visit to the city, we had a discussion with a couple of code officials.

Sylvia Cortez & Ray Herrera, Code Enforcement

With a tremendous amount of detail needed to be paid attention to on historical projects, the city has implemented a Historic Board to oversee any changes, new or redeveloped. The Joint Plan Review works with developers who are working on older buildings and work very close to the code officials to ensure every single historic building is kept in pristine condition if being redeveloped. The system is a complaint-driven format, where if a change is made there usually is no trigger that prompts code officials to raise a red flag and do an inspection. Other than those San Antonio specific methods, everything else seemed to be basic and uniform like other cities it's size.

Austin Day 2---Property Tours

Ronald McDonald House
Mueller Project
Seaholm Plant Redevelopment
Hill Country Galleria (night)


9am- Ronald McDonald house (Within the Mueller Project)

We had the pleasant opportunity to visit a product of one of the most charitable foundations, the Ronald McDonald House of Austin. The facility is an impeccable LEED Platinum design, with many features to prove for it. The House allows for sick children and family/friends affected by their nature to lodge at below market rates, and provides many helpful benefits also. The CEO of the non-profit firm, Kent Burress, gave us a slot of his schedule to be our tour guide for an hour. Some of the features that stand out drastically are the sustainable gardens, solar power (that powers 15, or one-half of the rooms on a sunny day), and the air handling system that has been implemented. The kitchen's cold water is sourced from a chilled water system donated by Austin Energy, the city's primary source for cool water. All of the paint/adhesives are low VOC's and contain no formaldehyde, which is great for air quality. The superior architecture allows for 82% of sunlight enter the facility on any day. The temperature monitoring system ensures that any given room does not set the temperature too high or too low, one of the features that gave them a LEED point. They have also installed sensor's that turn the room "on" and "off" as you walk in and out, allowing sustainable use of the energy sources in the room. The 16% premium paid for obtaining LEED standard will have a very quick payoff schedule, and was a relatively small portion of the $11.3M price tag of the building. Through good deeds to people and to the environment, it really seems like the people at the Ronald McDonald House are ahead of the curve at both tasks.


10:30am- Mueller Mixed-Use Project

Atop the old Mueller Airport, Austin's original, this 711 acre mixed-use city-within-a-city has all of characteristics needed for the best work-life-play balance. Originally planned as a PUD zoning, Catellus Development took the project on in 2004, and has since been working hand in hand with the city to develop tracts as time permits. The use has been mandated for Mueller projects, but the city is selling the land on an as needed basis, helping the firm hedge the risks of having to hold non-income producing land for long periods of time. The project has it's own TIF district, and 25% of the residential units will be utilized for affordable housing types of projects. The project is also where the aforementioned Ronald McDonald House is situation. The overall buildout vision extends 15 years out from when it was started.With stringent guidelines to follow to keep the development's impressive LEED Silver status, they have worked closely with current and future retailers,residents, and businesses to have them follow LEED guidelines at their establishments to ensure the overall seal can be retained. So far, Home Depot has built an LEED Gold building, residents have installed solar panels and other systems to encourage sustainability, and the Dell Children's Hospital is the first LEED Platinum hospital in the world. Impressive. Innovative. And in the driver's seat to be a truly world class development when fully built out.

12pm-Sholz Garden, San Jacinto St, Austin

We had lunch at Sholz Garden today, as the whole group was joined by representatives from the State that work as managers in the rural planning/retirement communities departments. The gave us insight into what types of issues developers run into in rural areas and how remediation can occur to increase expansion and growth. Only 20% of the US population lives in rural areas today, straining public spending due to the lack of, and causing depreciation of infrastructure due to less income from the smaller tax base (property & sales). State funded highway systems serve as one of the largest drivers for ancillary commercial/residential development immediately around them. Smaller cities need to take advantage of the incentives and programs that the state offers them to expand their growth, productivity, and quality of life.

1:30pm-Seaholm Power Plant Redevelopment Project
Situated on the southwest portion of Downtown Austin, the city's original source of energy is being slated to be redeveloped through a public-private partnership. The plant was closed down in 1992. This is one of the only projects the city has ever been willing to contribute to, having spent $13M so far on contamination remediation on the historic site. The plan is to keep the shell of the plant, and most of its current structurally sound parts intact, while building a mixed-use development around it. An RFP (request for proposal) has been issued by the city, and has also signed an MDA (master developer agreement) with the gentleman we met with. The project will have a boutique hotel, ground retail, residential rental space, and condominiums; all positioned on the site with a clear sight line of the capital view corridor.


2:45pm-Hill Country Galleria

This lifestyle/mixed-use center in southwest Austin has proven to be a learning tool for academics and developers alike. The $180M project was constructed in Bee Cave, a very wealthy portion of Austin, has had tremendous trouble leasing space in the retail and office portions. The original basis has proven to be unsustainable for any bank to lend permanent financing, and the property was bought just about 2 months ago for a mere $75M in equity by a UT professor and his partner. The retial broker we had the opportunity to talk to was working with the Weitzman Group, and he mentioned that he almost at the 70% occupancy trheshold, and when he reaches it, a lot of his normal (non-concession/discounted) rents will be flowing in. 50% of the office space was just recently signed in, and there has supposedly been more inquiries about leasing. If the lease-up efforts are successful for the new owners, this investment will have proven to be a smart one, while the original owners will see the effects of overbuilding at a high cost basis.

Day 1, ATX--City Officials,Austonian, & Chestnut Commons

Chestnut Commons

The Austonian's view from the top to the south

Austin City Hall

We have completed Day 1 of our statewide journey, and boy has it been an interesting one. 9am-12pm, Austin City Hall Speakers: Fred Evans, Economic Development/Growth Director Chris Johnson, Head of Dev. Assistance Leon Barba, Asst. Director of Inspections Michael Knox, Downtown Economic Development Richard Morgan, Green/Sustainable Building Fred gave us insight into his past, is an architect by trade and has been working for the city for 20+ years. Spoke about the 2 TIF districts in downtown area, the one including the Seaholm plant being the larger of the two. City's CURE process envisions and implements the redevelopment of the lower southwest quadrant of downtown, and incorporated various public/private partnerships to enhance the area. City Hall building sits on 99 year ground lease, and is LEED Gold. Spoke about the "Triangle" development at intersection of Lamar & MLK Blvd, and mentioned that it was the most successful developments in the area in his opinion.

Chris Johnson, Manager of Development Assistance, touched base with us on how he envisioned his department being a "one stop shop," where all general/specific inquiries were answered to via an online or walk-in basis. There are an average of 500/day in todays market, and that number was even higher at the hight of the overbuilding. They meet with the common citizen in an informal or formal setting regarding their interest in developments, and provide guidance to those who have inherited valuable tracts of land they do not know what to do with. Formal meetings are scheduled with large corporations that show interest in Austin, and they follow a very standard protocol. The city ordinances and regulations can seem exuberant to the local and non-local eye, so they really strive to clarify a wide variety of topics.

Following Mr. Johnson, Leon Barba joined us to give us an brief overview of the Inspection process in Austin. As the Assistant Director of Inspections, he touched on topics relating to regulations and building codes, and how they are carried out and treated by the city. Due to the dense areas of population, accessibility is a very stringent requirement for developers and new projects they propose. The common problems like plumbing/framing violations during construction are just as predominant in Austin as any other city. With Austin being a pioneer in the green development movement, they have adopted a Geen Building Code that they enforce primarily through water quality control measures and preservation of trees.

Following Mr. Barba, Michael Knox (the head of the Downtown Economic Development team) joined us to discuss his experiences of over 22 years with the City of Austin. With perhaps the best work-life-play mix of any downtown in the country, his intentions are to drive the CBD's revival into the place where people want to live. Incentives have not been given through public-private partnerships, but the 6th Street fund is a great way for small businesses to obtain city bonded loans at extremely low interest rates with favorable terms.

To close out our experience at City Hall, Richard Morgan, the Green Building/Sustainability Manager of Austin came to speak to us about the Green Building Code and LEED. Being a pioneer in the movement, they created the Austin Energy Green Building Rating System before LEED, and have stuck to implementing the system due to its Austin-specific characteristics. The star rating system approximately works as follows: 2-3 stars=Silver LEED, 3-4=Gold LEED, 4-5=Platinum LEED. Their SMART program concentrates on residential development/re-development, and has been implemented for most of the multifamily projects in the last 10 years. Since the Green Building Code is specific to Austin, the rankings actually are skewed as most rankings place Austin 8th as "most green cities," primarily due to the differences in the rankings. With a variance discharge, Austin actually ranks in the top 3, according to Mr. Morgan.

1:15-4:00 pm, The Austonian & Chestnut Commons projects

The Premier condominium project the City of Austin has seen is currently being prepared for grand opening OC. Early June will mark the date of the first owner's move-in date, and will set the groundwork for more occupancy. The developer, Momark Development Co. has been credited for sourcing a 45% occupancy to date, and is working to increase absorption in the Austin CBD and is responding well to the first-of-it's-kind high-end luxury development in town. The equity arm of the team was the parent company conglomerate from Spain that had their vision set on the exclusive, high-end, and private luxury experience. The 50+ stories offered unrestricted views and sight lines of the City's Capitol and downtown, and has worked at accommodating everyone that is willing to spend $500-$1000psf at the development. The primary target market has been those that have settled in the riches of the surrounding Austin boroughs, and want to downsize to higher density/amenity projects like this one (that also offers a lap style pool, dog park, theatre room , etc) to be closer to the culture of Austin. Overall, the project has created the new standard of living in Austin.

We have to applause the hospitality of our tour guide/developer, he took his kind time to show us around on his birthday. The 64 unit affordable housing positioned project is situated on the east side of town where there is room for redevelopment due to the plighted nature of the areas. With a 50% capture rate, the 1000-2000 sf units sold fairly quickly, and have proved to be a hit amongst those interested in being close to downtown/campus and east Austin while getting the exclusivity of a suburban neighborhood.

Howdy fellow Texas Tour folks

I feel comfortable with not having to meet before the trip, but can do so if needed.