| FEATURE ARTICLE, OCTOBER 2008
HOUSTON’S NEW DESTINATION
Local developer Midway Companies develops a true Texas landmark.
Coleman Wood
Many outsiders take the phrase “everything’s bigger in Texas” as hyperbole. But there is a lot of truth in that statement. Houston is the fourth largest city in America and its metropolitan statistical area contains approximately 12,500 square miles — an area bigger than the state of Massachusetts. Many companies located in Houston, and the rest of Texas for that matter, take that phrase to heart, though. One of them is Midway Companies, which is currently developing one of the biggest mixed-use projects in the city.
The Houston-based company got its start in Dallas in 1968. The name Midway Companies came from one of the developer’s first big projects, the 180-acre Metropolitan Business Park, which is located at the intersection of Midway Road and the LBJ Freeway in Dallas. Since then, the company has developed 35 million square feet of real estate, much of it in the state of Texas.
“During our history, we’ve built in 27 states and two countries, but the majority of our work today is in Texas…because over the last 5 or 6 years, there really hasn’t been a reason to venture outside of Texas,” says Brad Freels, CEO of Midway Companies.
Freels adds that when Midway does venture outside of Texas, it is usually because one of its clients wants Midway specifically to develop the project. Over the years, the company has done a lot of its work in the office and industrial sectors, with Freels noting, “Our bread and butter has always been single-tenant office and industrial.”
That does not mean that the company stays solely in those sectors. Over the years, Midway has expanded to include hospitality, retail, medical and multifamily projects, as well as master-planned residential communities. With its newest project, CITYCENTRE, the company is trying to create something that will become a destination for Houston residents.
Long before the first pile of dirt was turned over for CITYCENTRE, the company knew that it had something special with a prime piece of real estate located at the intersection of Interstate 10 West and the Sam Houston Parkway in Houston. The site had an enclosed mall on the premises, but the company had bigger plans.
“The reason we were interested was not because there was a mall here; we were just interested in the location. It was 38 acres of fabulous real estate at the corner of probably one of the most active intersections in the state of Texas,” Freels says.
While Houston led the way in mixed-use development in the 1970s with The Galleria, The Allen Center and Greenway Plaza, things had since tapered off. When it came time for Midway to decide on what to develop on the parcel, they looked at what was in demand in the area. Retail, office, hospitality and housing were all in need; on top of that, Houston lacked a true destination that would attract people from the city’s far-flung suburbs and beyond. Instead of focusing on one or two sectors, Midway decided to build them all.
When it is complete in April 2009, CITYCENTRE will comprise 1.8 million square feet of commercial and residential space. It will feature 450,000 square feet of office space; 400,000 square feet of upscale retail, restaurant and entertainment space; and a 144,000-square-foot Life Time Athletic fitness facility. The residential component of the project will contain 370 multifamily units, 250 urban lofts and 35 brownstones, as well as 22 penthouse residences that sit atop a 245-room luxury hotel.
While the mall was demolished to make way for the $500 million project, its three parking garages were kept to provide ample parking for CITYCENTRE. Rather than being constructed in multiple phases, Midway chose to construct the project all at once, albeit with staggered opening schedules for different components. Still, the coordination that is needed to juggle the construction of multiple components, many on top of each other, is incredible. Midway is dealing with this by constructing each component as its own separate project.
“In my opinion, the only way to manage it is to break it down into smaller projects,” says Jonathan Brinsden, COO with Midway Companies.
“It would be overwhelming if you tried to do it any other way,” adds Freels.
Midway is managing CITYCENTRE as 13 distinct projects that just happen to be going up on the same site at the same time. The company also has different partners for the different components, and each component has been separately capitalized. But Freels just shrugs off the size of the project.
“When you break it down into bite sizes, it’s nothing different that what we’ve done our whole careers — it just happens to be on 38 acres,” he says.
While CITYCENTRE was still in the design stages, the company took a tour of 27 different projects in 17 American cities. They looked at what worked and what did not, and took notes on everything from the dimensions of the projects to how people exited the parking garages. This tour inspired a design that Midway hopes will become classic.
“We hope that CITYCENTRE feels natural; that it feels like it’s organic to the area. I don’t want to come across as bragging, but because we think we’ve created something that could do that, I think, at some point, it will be iconic to Houston,” Freels says.
The tour taken during CITYCENTRE’s design process highlights one of Midway’s central principles: its commitment to the quality of the projects that it builds. This shows in the amount of time the company spends in the design process, making sure that every detail about the project is just right.
“We’re not merchant builders; we’re not building this to flip it to somebody else tomorrow…We have to live with everything we design and everything we build,” Brinsden says.
In addition to its attention on its projects, Midway puts an equal amount of effort in bringing the right people on-board. Brinsden says that they spend a lot of time making sure that the people the company hires have just the right character for the company’s environment. One of Midway’s core principles is that the company approaches every project with the same amount of commitment. This intense focus on the process has the added benefit of letting the company think more creatively about the project and find innovative solutions to problems.
As a long-term holder, Midway has the benefit of watching its projects grow and assimilate into the fabric of their neighborhoods. With the completion of CITYCENTRE looming, the company is able to take a front-row seat in watching a project develop that will undoubtedly become an icon in Houston’s vast landscape.
Midway’s Kings Harbor Brings Upscale Space to the Shores of Lake Houston
While it may not be of the scale of CityCentre, Kings Harbor is still demonstrating Midway Companies’ knack for cutting edge, mixed-use developments. The project is located on the shores of Lake Houston in Kingwood, a Houston exurb located approximately a half-hour north of the city.
Kings Harbor features 60,000 square feet of upscale retail, restaurant and entertainment space; 22,000 square feet of Class A office space; 35 brownstone units; 42 luxury townhome units; 250 apartment units; and an 80-unit senior housing facility. Creating a cohesive environment between the different components is Midway’s goal with the project, as well as making it a relaxing destination for visitors at all hours of the day.
The biggest draw of the 25-acre project, though, is its setting. Located on the waterfront of Lake Houston, Kings Harbor carries the distinction of being the only lakefront commercial development in the market. This amenity will prove irresistible visitors, as well as tenants and residents of the project.
The project is presently under construction with a 2009 completion date expected. But many tenants have already signed on, including Raffa’s American Bistro, Zammitti’s Pizza & Pasta, Two Gems Ice Cream, Chimchurri’s South American Grill and Cómo Se Dice. Another tenant, The Wine Loft, has already opened within the project.
Many of the same concepts used in CityCentre were applied to this project, and if the anticipation for Kings Harbor’s sister project is any indication, expect Kings Harbor to be an instant hit.
— Coleman Wood |
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