Metro Ponders Galleria Real Estate, And Why The Uptown District Can't Deliver On its $70 Million Promise
At a committee meeting earlier today, a couple Metro board members balked at the idea of rushing into a real estate deal currently in negotiation.
The property in question is along Post Oak Boulevard, just north of Hidalgo Street and basically across the street from the Williams Water Wall.
The land is located along Metro's planned Uptown light rail line, although there are still some questions surrounding that line's alignment, according to Metro's president, George Greanias.
Furthermore, the Uptown Management District had promised $70 million in infrastructure improvements to help with the light rail, Greanias said, but the district doesn't have "the financial capacity" to deliver that kind of money.
So the Uptown line is on hold.
However, Greanias said this real estate deal was too good to pass up and will help with future development of the Uptown line. Skanska USA is using part of the land to build an office building and parking garage.
The whole thing seemed to cause a couple board members unease. Burt Ballanfant, for example, wanted an "escape plan" in the contract. Meaning, if the Uptown line doesn't end up getting built, Ballanfant wanted Skanska to be responsible for buying back the land, plus interest.
"We don't need to own $5 million of little bits and pieces of gardens along Post Oak," Ballanfant said. "If we do it, I think we should be able to get out of it."
Boardmember Trinidad Mendenhall Sosa, referencing the questions surrounding the Uptown alignment, added, "We can't even talk about properties, because we don't even know where we're going."
But Greanias assured the board members that even though there currently is no escape plan in the contract, this purchase is a one-time deal for the Uptown line, because Metro is not engaging in large-scale land acquisition along Post Oak.
David Couch, Metro's managing director, added that the purchase "improves the way [Skanska] can develop the land."
"It makes sense to acquire land we won't immediately use," said Boardmember Christof Spieler. "Land will only get more expensive."
The talk, of course, was just discussion, and the land deal is still being negotiated. We'll have to wait at least until the next official board meeting to see how Metro proceeds.
Update: According to Margaret O'brien Molina, a representative for Metro, the agency has $5 million in this year's budget to buy real estate for the Uptown line. Metro won't spend any of the money, she says, except for this one parcel, which will represent a "fraction of that budget."
The price, or even a ballpark figure, can't be release because, of course, Molina says "it would hurt [Metro's] ability to negotiate the best price."
"The planned development of this parcel will have a direct and significant impact on the Uptown Line, a project we have committed to building," Molina told Hair Balls via e-mail. "Purchasing this land makes good business sense. If we delay in securing the parcel there will be considerable financial impacts because of development, and a consequent rise in real estate prices."
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