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Cotswold Unspun

The spacious banquet room at the new Kim Son was packed. The latest addition to Market Square, the restaurant itself is one more sign of renewed life downtown, and the people who gathered there on January 23 had been invited for the public unveiling of a grand plan for the further revitalization of the historical heart of Houston. In the works for a year and a half, the project was called "Cotswold" -- named, for some inexplicable reason, after the pastoral region of England famous for its sheep and walking tours -- and it was put forth as the key component of the ongoing effort to transform the entire north end of downtown from a sparse, low-rent zone pocked with blight into "a thriving, livable urban neighborhood," as the promotional literature described it.

No doubt one of the drawing cards for the luncheon was the list of wealthy and influential businessmen whose names were attached to Cotswold. The lineup of board members was indeed impressive: Cogen Technologies' Robert McNair; former Shell Oil CEO John Bookout; former First City Bancorporation chairman James Elkins Jr.; the Sterling Group's Gordon Cain; investor Jack Trotter; Robert Cruikshank, the former senior partner of the Deloitte & Touche accounting firm; Leo Linbeck Jr. of Linbeck Construction; oilman Paul Howell; developer Richard Weekley; and Walter Mischer Sr., the political kingmaker of the seventies and eighties known for his ability to pull the levers of government for his own benefit.

Some of them, such as Cruikshank and Howell, were instrumental in the 1993 anti-zoning campaign; others, such as Linbeck and Weekley, play lead roles in the tort reform movement. But only Weekley, who owns an interest in the Hogg Palace Lofts near Market Square, has a financial interest in downtown redevelopment.

Yet, as was announced at the Kim Son luncheon, they had joined together to form a charitable nonprofit corporation, the Cotswold Foundation, which would raise and invest $30 million to narrow downtown streets, create about 3,000 new parking spaces and bring extensive landscaping touches to a 60-block zone running east from Louisiana Street to U.S. Highway 59 and south from Buffalo Bayou to Capitol. Congress Avenue would become Cotswold's centerpiece, a series of block-long water gardens linking the proposed baseball stadium near Union Station with Market Square, which would be turned into an underground parking garage topped by another water park. To keep things orderly, Cotswold would deploy its own uniformed security force.

But the most attractive feature of the whole package, as those who dined at Kim Son that day were told more than once, was that Cotswold wouldn't require the expenditure of any taxpayers' dollars. Rather, the project was to be "a gift" from the wealthy benefactors on the Cotswold board, who were said to have virtually no personal economic interest in the area and only wanted to give something back to their community.

That same message has been trumpeted far and wide since then -- at City Council meetings, in Cotswold presentations to civic groups and on the news and editorial pages of the Houston Chronicle, whose main property sits in the area targeted for Cotswold's supposed largess. "Public money is not needed to make this project succeed," proclaimed the original press release announcing the project.

That promise --and perhaps more important, the credibility of the men behind it -- have made it hard to argue with Cotswold. It's also obscured some rather unpleasant realities about the grand plan: the fact, for instance, that it was developed with almost no input from the various groups and individuals who had toiled for two decades to revive downtown, or that very little of the $30 million or so to be spent on the project will actually come from the pockets of the Cotswold trustees. Or that despite the repeated promises to the contrary, Cotswold will require a very large infusion of public money -- albeit an indirect one -- if it is to become a reality.

In the three months since the unveiling at Kim Son, little in the way of concrete detail has been offered to the public about Cotswold. If anything, the plan is even more vague: After several budget revisions and scathing criticism of Cotswold's plans for Market Square Park, plans for the underground parking garage have been temporarily scrapped. Since Cotswold's layout conflicts with Metro's long-range plan, other streets besides Congress are under consideration for the water gardens. And as Cotswold's hirelings and a battalion of city officials scramble to make the numbers work, it's unclear whether the plan can succeed at all -- at least without city backing.

None of these details have been aired publicly. Instead, the Cotswold promoters are distributing the same promotional package that was passed out at Kim Son in January. Cotswold Foundation executive director Mary Gibbs says that the plan is flexible and that Cotswold ambassadors have been actively reaching out for input from all quarters. But none of the principals were willing to field questions about the project from the Press before our deadline. "They're really not interested in pursuing media opportunities at this time," Gibbs explains.  

At the same time, the lords of Cotswold have been almost pathologically anxious to secure an official go-ahead for the concept -- before most of the specifics have been fleshed out or any of the harder questions about costs and benefits have been answered. "I am getting considerable pressure from my sponsor group to get our proposal before City Council for preliminary approval," project manager Leo Linbeck III wrote on March 3 to Michael Stevens, the mayor's chief for inner city redevelopment. At Linbeck's urging, April 30 was set as a target date for Council consideration, though it appears that Cotswold won't make the agenda for another week or two.

Why the rush?
"I don't think that I can really venture a guess on that," replies Gibbs. "I think all you're seeing is a lot of enthusiasm, would be my guess."

Even so, Gibbs acknowledges, Linbeck used "a curious choice of words to express enthusiasm."

Whatever the reason, the timetable doesn't give the councilmembers, most of whom are far out of the Cotswold loop, much of an opportunity to get up to speed. And even though Council won't be asked to finalize an agreement, which will deed to the Cotswold Foundation the right to control more than 60 square blocks of public space for the next three decades, it will be difficult to back out once preliminary approval is granted.

But the pleasant glow generated by the Cotswold PR effort will probably be enough to muster the Council's rubber stamp, especially since Mayor Bob Lanier seems to approve of the concept. And some councilmembers already count themselves as Cotswold loyalists: "God, it looks like it would be the greatest thing ever for downtown," gushes Felix Fraga.

Houston has never looked too kindly on its mass transit, but life downtown would grind to a virtual halt without it. "Downtown is Houston's largest activity center and Metro's largest destination and transit market," according to a summary of the Metropolitan Transit Authority's long-range plans. Thirty-three thousand commuters ride the bus daily to work downtown on 88 different routes. Those commuters generate more than a third of the $43.5 million in fares that Metro collects annually.

In 1992, the transit agency finalized its billion-dollar Regional Bus Plan as an alternative to the light rail system killed by Lanier soon after he became mayor. The plan, to be completed in 2004, includes almost $180 million to better serve downtown in the form of sidewalk and street improvements, landscaping, expanded service and other amenities. "We are trying to grow the system," says Metro spokeswoman Julie Gilbert.

For the past 18 months, Metro planners have been thinking even further ahead, formulating the Advanced Regional Bus Plan that extends to the year 2020. Though the specifics are far from being finalized, in December the agency reported that all trends forecast an increase in demand well into the next century. "Expansion of service is required," the report concluded. "The transportation program of the future will need not only to provide increased capacity, but to add new dimensions."

Since Metro has spent more than a decade of planning, thousands of hours of staff time and at least $5 million designing and implementing the long-range plans, it was odd that no one from Cotswold bothered to let the agency know about the plan to restyle most of northern downtown into a peaceful urban village -- free of excessive noise from buses. "The effect of the changes is a significant reduction in bus service," according to a study prepared for Cotswold by the engineering firm Turner Collie & Braden. "Commuter service ... is reduced the most."

But no one on Metro's staff was notified of Cotswold's existence, even though the project had been on the drawing board for 18 months. Not that the thought hadn't occurred: In a fax to Michael Stevens a week before the Kim Son luncheon, front man Leo Linbeck III sought Michael Stevens's advice on contacting the transit agency. "Should we pre-brief Metro?" Linbeck asked. "If so, please let me know ASAP, since available slots in the War Room are filling up."

Evidently the war room reached capacity, because no briefing took place, though Stevens recalls that he gave his consent to the idea.

If Linbeck sounded more like a general preparing for battle than a beneficent liege preparing to bestow a great gift upon the city, he may have been anticipating Metro's analysis of Cotswold's impact on transit operations. In an April 10 report, Metro outlined a number of likely deleterious effects: an annual loss of rider trips estimated as at least 800,000, safety and mobility problems, increased bus volume on streets with reduced traffic capacity and diminished access for commuters to such destinations as the county courthouse complex.  

The official line from both Metro and Cotswold is that the two are negotiating a way to coexist. Yet it appears that something significant has to give, and that something may well be the interests of the predominantly lower- and middle-income workers who ride the buses. "Everybody's talking about, well, this is gonna be good for this, this is gonna be good for that," says Metro trustee Rafael Acosta, who expressed concern about Cotswold at a recent board meeting. "But nobody's ever asked the question, 'Is it gonna be good for the people who are really dependent on bus service?' "

A reduction in service of the magnitude being discussed has damaging consequences, Acosta argues. "To me, it's a negative for Metro," he says. "We are telling 800,000 people, find some other means of transportation, because we can no longer take you where you want to go efficiently and effectively. And even if you depend on that service, it's the end of that service."

There's another sour note in Metro's report: To reprogram and redesign the streets as Cotswold proposes would cost from $3 to $4 million. An additional $4 to $6 million has already been spent on design work that would have to be abandoned. And Metro might have to refund $3 to $5 million to the Federal Transit Authority if the new street configurations do not meet federal guidelines, which they likely would not: The federal money is intended to further the creation of "diamond lanes" dedicated to buses, which the Cotswold street narrowings would preclude.

That's a total cost to conform to Cotswold of between $10 and $15 million -- a range that doesn't take into account the value of ten years' worth of Metro staff time down the drain.

Moreover, 800,000 fewer bus trips equals a loss to Metro of almost $1 million a year, though savings from reduced operating costs offset about $100,000 of that. Over the 30 years that Cotswold proposes to control the north end of downtown, Metro would lose $27 million, though ridership may eventually increase if Cotswold brings more people into the area.

Metro staffers continue to rework the numbers to ratchet down the cost, but however many millions they add up to -- and Metro money is public money -- the $30 million "gift" that is Cotswold suddenly seems a lot less than it's made out to be.

Yet Cotswold's mouthpieces stand by their story that "public money is not needed to make this project succeed." That statement refers to the actual $30 million in construction expenses, says Gretchen Weis of Pierpont Communications, Cotswold's publicist. The total excludes the Metro money, which Weis calls "transition costs," though she allows that "there would be public monies that would be involved in transitioning stuff."

The figure also does not include the value of the city-owned easements and rights of way for 60 square blocks, which Cotswold wants for free, or an almost $2 million reimbursement from the city to relocate water and sewer lines, or a $4.6 million loan borrowed through the city, as suggested in recent budget projections.

Though it probably isn't being calculated, the time spent by city employees aiding and abetting the project would have considerable value as well. Cotswold has already engaged a spate of workers from five city departments to help whip it into shape. Michael Stevens detailed some of that labor in a March 24 letter to Leo Linbeck III, including extensive analyses of financial, traffic and siting issues. "You may let the directors of the Cotswold Foundation know that I have asked a number of the mayor's top officials to further develop the Cotswold project proposal in preparation for submittal to City Council," Stevens wrote.

Then there's the subsidy for the movie theater that Linbeck wants to see built on the block directly south of Market Square, which the Cotswold Foundation has an option to buy courtesy of Texas Commerce Bank. "It looks as if we're getting closer to a plan for a cinema on Block 43," Linbeck wrote Michael Stevens in his January 16 "war room" fax. "However, we probably can't make it work without Section 108 financing" -- that is, a subsidized federal loan program targeting economically depressed urban areas.

While there appears to be plenty of public money attached to Cotswold, the source of the private funds is harder to pin down. Robert McNair has pledged $1 million of the $30 million needed to transform the area, but no other monetary gifts have been announced. (Other Cotswold trustees have covered $450,000 in up-front costs, according to the Cotswold Foundation's Mary Gibbs.) The foundation, which recently received its tax-exempt status from the IRS, is seeking another $10 million to $12 million from such charities as the Houston Endowment, which has been hit up for $4 million.  

As for the bulk of the money, "private debt will fund the balance of the program," as Cotswold's press releases note ambiguously. That means Cotswold will borrow the cash against future revenue from parking meters and parking tickets written by Cotswold's private force of meter maids. That money would come from the folks who drive down to shop at the Cotswold shops, dine at the Cotswold cafes or otherwise patronize the district. Average Houstonians, in other words.

Since those people are private citizens, that's not public money, points out Gretchen Weis. On the other hand, it always has been in the past, since the city collects all of Houston's parking meter revenue and fines. And even though the parking revenues estimated at $4 million to $6 million annually would be handed over to Cotswold for the next 30 years, some of it would still be public, since the city wants a $1.4 million cut of the action.

That's all just semantics, says Weis. The point is, Cotswold isn't like the Rice Hotel, where the government had to front money to get the project done, or any of the other big-ticket "public-private partnerships" that are vastly more public than private.

"This isn't El Mercado del Sol," says Weis.

"It's the same thing as Mercado del Sol," says longtime downtown advocate and property owner Bart Truxillo. Public money isn't Truxillo's topic, but he is discussing Cotswold -- in particular, the way the project was foisted on the public with virtually no input from the stakeholders.

In El Mercado's case, the mostly Hispanic neighbors of the project were left out of the planning. In Cotswold's, those not brought in were the people who have worked for more than 20 years to improve the northern reaches of downtown: Metro, small business owners, preservationists, property owners and the grassroots groups that created models for revitalizing the area and worked to restore Market Square Park and Buffalo Bayou.

Especially irritating to Truxillo and others was Cotswold's plan for Market Square Park, which had been renovated in the early 1990s by a group of artists working with the Downtown Houston Association. It took years to raise the necessary funds and secure the cooperation of indifferent administrations for the project, which transformed the park from a barren wasteland into a colorful, attractive public space decorated with local art and historical photographs.

"It was really a heroic effort," says architectural historian Steven Fox. "They were able to change that place for the better in a way that high-powered organizations in the past had not been."

Cotswold's plan for Market Square, however, meant destroying the existing park and replacing it with an underground parking garage (in part to service the cinema the Cotswold Foundation wants to see built across the street) topped by a nondescript water garden. For the years of work to be swept away as though it were nothing, says Fox, "was quite a slap in the face."

Shortly after they revealed their intentions, the Cotswold forces set up a series of public meetings with a host of civic and business groups to seek input, stressing that the proposal was still in the conceptual phase and was flexible. Not everyone is convinced. "They really weren't asking us anything," says a downtown advocate who attended one of the briefings. "They were telling us."

Others have bought what Cotswold is selling, including Minette Boesel, former president of the Greater Houston Preservation Alliance and a Market Square property owner. "After the initial announcement, they have made an extraordinary effort to reach out to the community," Boesel says.

But the sense that an arrogant bunch of outsiders had decided what was best for everyone else has left a bad taste in many mouths. "Frankly, I was a little pissed off that they would be so presumptuous," says Dan Tidwell, an owner of Treebeard's restaurant, which for years has anchored the commercial life around Market Square. "But I'm trying to be a good person about all of this. I just think that somebody needed a little lesson in tact and public relations."

Bad manners aside, what most concerns critics is the project's seeming lack of connection to the rich history of the area and its essential urban nature. Though no one challenges the talent and vision of chief designer Peter Walker, an internationally respected landscape architect from California, the Cotswold concept seems strangely disembodied from the environment it is supposed to enhance. Its name, in particular, seems better suited for a gated subdivision outside the Beltway rather than the gritty urban blocks where Houston was born and raised.  

The name apparently was bestowed in a moment of whimsy, in the same airy spirit of arrogance with which Cotswold was introduced. In an article on the project in the latest edition of Cite, the Rice Design Alliance's architecture review, Leo Linbeck III explains that the name was selected at the last minute in the office of the group's attorney, Howard Ayers, who was headed out of town. Someone asked Ayers where he was going, and he replied the Cotswolds.

"With so much at stake and so many financial decisions to make, the name really didn't seem to matter much," Cite quoted Linbeck as saying.

Perhaps that attitude shouldn't be surprising, since the interest of the Cotswold trustees in downtown has little history of its own. Project manager Eugene Lee, an employee of Linbeck Construction, was recently hired from out of town. And the fact that only one of the prominent developers and executives whose names give Cotswold clout has any financial stake in downtown may relieve suspicions that they're motivated by personal interest, but it also underscores their lack of connection to the area.

"I guarantee you that until five years ago these guys would not have touched downtown," says Bart Truxillo. "They've all gotten on the bandwagon because downtown is turning around."

The vision that wealthy suburbanites have for downtown might not intersect that of a more urban segment of the population, the ones who already frequent the place. Cotswold's antipathy toward buses extends by implication to those who ride them. And the private police force, intended to make Cotswold's patrons feel safe from harm, plays on the misperception that downtown is a dangerous place, haunted by criminals and bums.

Add the homeless to the list of undesirables whose presence in the area might offend or frighten a Cotswold crowd. At present, downtown has the highest concentration of homeless men in the city, many of whom stay or use the services at the Star of Hope men's shelter on La Branch Street, around the corner from the proposed site of the new ballpark. Two years ago the shelter broke ground on a planned expansion to double its capacity.

But that may not be an issue anymore. Apparently bending to pressure, Star of Hope's directors are reconsidering the expansion plan and are open to relocating, though development director Beverly Chambers says no final decision has been reached. But Leo Linbeck III, when asked about the homeless issue by the Chronicle, offered a more pointed comment: "The experience of other cities, when they've done this [type of development], is a lot of homeless that live in that area tend to move into other areas."

Whether Cotswold's vision of burbling ponds, cafes and ye olde shoppes overlooked by bustling offices and lofts can be successfully imposed on downtown is open to question. The idea, according to the promotional materials, is to stimulate such development by putting in 3,000 parking spaces, planting a bunch of trees, cutting down on traffic and flooding several blocks. It might work, but its chances of success are more of a crapshoot than a guarantee.

"I don't understand how they think it will develop in certain kinds of ways without any controls," says Steven Fox. "Without any control over real estate, there's no way to ensure that that kind of vision will happen."

Some of the individual features baffle observers. Running the water gardens down Congress past the courthouses, for example, seems peculiar to Treebeard's Dan Tidwell. "What are they gonna do, put outdoor cafes in front of the jury assembly room?" he says. "It doesn't make any sense to me."

Before anything can happen, though, Cotswold's shepherds must massage their financial projections to make a more convincing case that the project can pay off the proposed debt. But that burden has become increasingly tough as more accurate cost projections have trickled in. While original estimates set total project expenses at $33.9 million, an April 6 budget abandons the $6 million garage underneath Market Square and scales back the plan for Market Square Park, but still has a bottom line of $33 million.

To get there, the city may have to compromise on some sticking points. Early Cotswold figures, for example, assume the right to charge for parking on evenings and weekends (presumably including ball games), currently free throughout the city. While the more recent tallies have ditched that option, the issue is still on the table, according to Cotswold executive director Gibbs. "It is the intent of the Cotswold Project team to encourage downtown parking after hours and on weekends," wrote Gibbs in a response to a question from the Press. "However, the details of specific fee structures are not yet developed."  

Cotswold will also have to reconcile its considerable differences with Metro, and while both sides are publicly falling over each other with assurances of ongoing cooperation, it's not sure how or if they can work out the details. Or if they really want to. One source at Metro says some staffers are angry at what they see as political pressure being applied from above to make Cotswold happen. And according to a downtown advocate who attended a briefing by Leo Linbeck III, the construction heir discounted Metro as an obstacle. "Linbeck showed great confidence in being able to bend Metro to his will," the source says.

One element of the plan does not appear to be negotiable, however -- the role of Linbeck Construction. Without so much as a nod to the possibility of competitive bidding, the Cotswold partners have decreed Linbeck as the lead company on the "project team," with executive vice president Leo III and employee Eugene Lee as the pivotal players in the implementation.

While Linbeck's share of the project is uncertain, and Cotswold sources emphasize that no contracts have been signed, the company appears to be the only horse in the race for general contractor. At more than $20 million, construction costs comprise the bulk of the project's projected expenses.

While Linbeck appears to be the only direct cash beneficiary of the plan among the Cotswold backers, others have an indirect interest in seeing it happen. Weekley's stake in the Hogg Palace lofts on Louisiana Street will be enhanced by extensive improvements in the vicinity. Robert McNair, whose partnership with Houston Aeros owner Chuck Watson in Houston's bid for a National Hockey League franchise would make him a stakeholder in the hockey and basketball arena planned for downtown, would doubtless be pleased if Cotswold proved a magnet to the facility.

Nor does a lack of existing interests preclude the Cotswold trustees from cashing in on the deal later. If anyone has the resources to capitalize on Cotswold, it's the foundation's trustees and their friends. Cotswold's creators cite the billionaire Bass brothers' involvement with Fort Worth's Sundance Square district as a model. The Basses owned but half a block before the city began subsidizing the rebirth of its downtown with $300 million in public funds. Today, they own almost 38 square blocks spoking out from Sundance Square, maintain a Cotswold-style private police force and control virtually every important decision on its future.

But with the exception of the Linbecks, the personal benefits anyone might glean from Cotswold would largely depend on the project doing what it's supposed to do -- catalyze redevelopment in the area. And that in turn could well provide a benefit for the city next to which any self-dealings would pale in comparison.

Assessing the potential benefits versus the costs is the city's job, and all involved say that before any deals are signed or public resources turned over to private hands, the equation will have to be clear. "Before we bring a $30 million deal to Council, we need to have exercised the proper due diligence to provide the highest level of assurance that we think this project is financially viable," says Richard Lewis, the city's director of finance and administration. "We've got to be sure that it's a good business deal for the city."

Even Cotswold's critics agree that the basic elements of the plan -- improved parking, more friendly and aesthetic surroundings -- can do nothing but improve an area sorely in need of improvements.

"Everything is right about it," says Bart Truxillo, "except the input of the community."

Guy Hagstette, director of capital projects and planning for the Downtown Management District, a subset of Central Houston Inc., also believes that Cotswold's flaws have little to do with the concept. "I think [the critics] mix up the process-oriented questions with the merits of the proposal itself," Hagstette says. "This proposal is in general an incredibly good set of ideas."

Of course, ideas don't always translate well in practice, notes Joe Webb, president of the Houston chapter of the American Institute of Architects. In 1995, Webb led a team of 100 architects in a pro bono project to examine alternatives for the northern end of downtown. Despite his expertise, no one from Cotswold asked Webb his opinions in advance. "It was done in a vacuum, kind of like a lot of things that are done in Houston," he says.  

Cotswold may sound like a fine idea in concept, but great ideas don't always pan out. Webb notes that for every successful major public or private development venture in Houston, there's a corresponding failure, though they all may have looked like winners on the drawing board.

"We've got examples of things that work," Webb says. "We've got just as many examples of things that don't work.


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