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Midway Plans 'Transformative' Project East of Downtown

Houston Chronicle | 09.28.2016

One of the city's most prominent developers on Wednesday will give investors a look at early plans for the former KBR site, a 147-acre tract with water and skyscraper views that could be transformative for the traditionally working-class East End.

"This is generational real estate," Jonathan Brinsden, CEO of Midway, the company behind CityCentre and other high-profile projects, told the Chronicle in an exclusive preview of the project. "It will shift the center of gravity of Houston's urban core toward the east."

The abandoned office and industrial complex offers an opportunity most developers only dream of — a huge plot of mostly vacant land, a blank canvas on which to design and build a community for thousands. Specific details are still being determined, but it ultimately could be as large as 8 million square feet of shops, offices and entertainment venues. Over time, the investment could reach the billions.

Midway, which is developing the site in a joint venture, will discuss the project during its annual investor conference in the high-end hotel on the grounds of the company's CityCentre development in west Houston. For comparison sake, the new project could be as large as four CityCentres combined.

Keeping in mind the amount of planning and marketing yet to be done, and acknowledging the current challenge developers have financing large-scale projects during the energy downturn, Brindsen said he is taking a long-term view. Midway hopes to start on the project within a couple of years, building it in phases over perhaps a decade and a half.

"We're in an environment now where development financing is tricky," he said. "The good thing is we have a huge asset with a lot of value."

The land has another attribute that makes it unique: one mile of frontage along Buffalo Bayou.

The developers were inspired by the historic body of chocolate-colored water that flows through the city and directly along their site. They refer to it in the name of their project — though with a decidedly uptown upgrade: East River.

"It feels more like a river where we are," said Brinsden, noting how the bayou widens along the site.

The name "East River" evokes an "industrial waterfront development," he said. "It feels like it could almost be in New York City."

Housing will be a key component in the project with plans for both for-sale and rental properties to accommodate a variety of income levels.

"This site affords us the opportunity to be really creative about delivering products that may not exist here in Houston," Brinsden said. "Affordable and mixed income will be something we will work on."

The former KBR site and the area immediately around it has largely had an industrial past.

In recent years, many of the vacant sites and warehouses have been filled in with multistory townhouse developments.

"There's been a transition of demographics," said Patrick Ezzell, Director of Economic Development & Infrastructure for the Greater East End Management District. "New residents outweigh the old in that pocket."

But the neighborhoods just beyond the newer urban housing date back decades. North of the bayou comprises predominantly African-American neighborhoods, while south of the bayou tends to be more Hispanic.

Residents have expressed concern about the area's future as more high-end development moves in.

"There are people who are afraid that land prices are going to go up and they'll be forced out of their homes," Ezzell said.

Calling east of downtown "the next logical growth area," Brinsden said he is cognizant of the consequences of gentrification.

"It's that double-edged sword," he said. "On one hand, increasing property values should create wealth and on the other hand it then creates a barrier to actually staying in a neighborhood."

He said Midway intends to be sensitive to the neighborhood and its cultural and industrial heritage.

"We'll create a tax base that doesn't exist, which then hopefully can be used to make enhancements and improvements for the broader community than just what we're working on," he said.

Much of the former KBR site has been annexed into the Fifth Ward Tax Increment Reinvestment Zone, a tool used to finance improvements in an area.

Andy Icken, chief development officer for Mayor Sylvester Turner, said the city is open to working with developers and potentially offering other incentives.

The use of public funds, however, would likely not come with any requirements over what is built, such as affordable housing. But, Icken said, "To the extent we can encourage more of that to happen I think that's in everybody's interest."

The East River project is a joint venture with Cathexis, a company owned by William Harrison, a wealthy Houstonian with business in energy and real estate who purchased the land at 4100 Clinton in late 2012.

"We believe the transformative nature of the project will be meaningful for the local community, its residents and the city of Houston as a whole," Harrison said in an email. "We're looking forward to turning our joint vision with Midway into an integral part of what makes Houston a special place to both live and work."

KBR had owned the onetime office and industrial complex since 1919, when the engineering and construction company was Brown & Root. Additional property was later purchased and the site now totals 147 acres.

While most of the old KBR buildings have been demolished, Midway is considering saving perhaps a few of the handful that remain.

A 12-story office building could be used as a marker to identify the area, Brinsden said, throwing out ideas for it like a "multistory park or elevated urban garden."

In the coming days and weeks, the developers will visit major real estate projects in other cities to get ideas for East River. Some of those include Denver's LoDo and Riverfront Park, San Francisco's Ferry Building, the Meatpacking District in New York and Brooklyn's Dumbo neighborhood.

Midway, which touts East River as the "largest redevelopment site in Houston's urban core," envisions the site as an entire "urban community" that could be built as a series of "districts," each with its own identity. There could be a "Garden District" and a "Distillery District," for example.

Brinsden said the project won't be a larger replica of CityCentre, the company's gleaming collection of upscale retailers, glass office towers and high-end apartments at Interstate 10 and West Beltway 8.

The goal is for East River to have a more authentic feel as if it were developed over time.

"We're trying to draw reference from places that were industrial parts of cities that have since been redeveloped," Brinsden said.

Keeping in mind the amount of planning and marketing yet to be done, Midway hopes to start building the project within the next couple of years.

Financing such a large-scale project, particularly if Houston's energy sector remains a drag on the economy, could be a hurdle.

"We're going to have to approach that as we get further along," Brinsden said. "We're in an environment now where development financing is tricky. The good thing is we have a huge asset with a lot of value."

Asked about the East River name, several people agreed that the bayou looks more like a river near the Midway/Cathexis site.

"It's quite a bit wider and it's almost as if there's a bluff," Icken said.

Anne Olson, of the nonprofit Buffalo Bayou Partnership, agreed.

Her organization soon will be making plans to improve the bayou on the east side of downtown, as it did with Buffalo Bayou Park on the west side.

"It really does look like a river over there," said Olson. "From that standpoint it's appropriate."