With a professional soccer stadium being built, East Downtown could soon be stepping up as the city's next transformed area
Will the Dynamo stadium give EaDo a kick?
On a map, EaDo - short for East Downtown - looks inviting for development, right next to Houston's Central Business District.
It has yet to bloom, however.
One reason offered by some real estate brokers is that the U.S. 59 overpass dividing downtown and EaDo is a psychological barrier.
But civic and business leaders are taking a fresh look now that the Dynamo's soccer stadium - the first major public venue in EaDo - has broken ground there. Their consensus is that EaDo is ripe for development, although it may be gradual.
Of course, it's not a given that a stadium will transform an area.
When Minute Maid Park, formerly Enron Field, was first announced, many people expected that part of downtown to develop a thriving entertainment scene.
While it did lure a hotel and a few bars and restaurants, the ballpark is still surrounded by some darkened streets after games let out.
Downtown's Discovery Green, on the other hand, has in relatively little time been credited with luring an office tower, a residential high-rise and a hotel.
Anita Kramer, senior director of retail and mixed-use development at the Urban Land Institute in Washington, D.C., said it is hard to predict the future of an area like EaDo.
"Sometimes one little hip block will spark retail development on surrounding blocks," she said, "but you can't count on it."
Discussions are under way for a six-block-long linear park in EaDo, and there is talk, still in the early stages, of a 1,000-room convention hotel.
"Sometimes one little hip block will spark retail development on surrounding blocks," she said, "but you can't count on it."
Discussions are under way for a six-block-long linear park in EaDo, and there is talk, still in the early stages, of a 1,000-room convention hotel.
The area has already seen plenty of apartment complexes built in the past few years, and a music venue and bars have also popped up. But it also has its share of warehouses, vacant lots and boarded buildings.
The more residential density in the area, the greater the chance it will also produce a thriving entertainment district, Kramer said.
"EaDo has all the potential in the world," said David Cook, executive vice president and shareholder at the Cushman & Wakefield real estate firm.
"I see the same kind of blossoming in EaDo as we saw in Midtown."
EaDo is a triangle-shaped area bounded by U.S. 59, the Gulf Freeway and the Union Pacific rail line running from Cullen to Congress. The soccer stadium, clubs and the planned promenade and the hotel under discussion are in the section closest to downtown.
EaDo land prices have increased dramatically recently, Cook said - to the $50-per-square-foot range, about the same as in Midtown, from around $25 to $30. By comparison, Cook said, land is about $400 per square foot downtown.
The soccer stadium represents the breaking of a barrier in the East End, said Bob Eury, executive director of the Houston Downtown Management District.
"We're creating a master plan with the idea of looking at downtown and EaDo as one urban space," he said.
Game changer?
Tina Araujo, general manager of the East Downtown Management District, sees the Dynamo Stadium as a game changer.
"It pushes downtown to the other side of Highway 59 and brings attention to the area," she said.
Just west of U.S. 59 is Minute Maid Park, Toyota Center, the George R. Brown Convention Center and Discovery Green.
Araujo acknowledged significant infrastructure issues for EaDo, including the condition of old streets and sidewalks and underground utility lines either in poor shape or nonexistent. But such challenges can be met, she said.
"A complete redevelopment in EaDo is likely more long-term than short-term, but all indicators are positive," Houston Mayor Annise Parker said.
She added, "I do believe Highway 59 creates a visual and psychological barrier, and it is quite possible there will be a thriving downtown and EaDo side by side."
The city will try to bridge that barrier with improved lighting and sidewalks and street signs to help people find their way under the overpass, she said.
Local businessman Dan Nip's plan for a big hotel in EaDo near the convention center is in the very early discussion stage, Parker said.
Nip described his plans for a convention hotel as "still very premature" and had no further comment.
"I don't know if it's going to happen," Cook said, "but he's certainly bought two blocks of land there."
In an official letter to Nip shared with the Chronicle, Parker stated that if he secures financing for a 1,000-room hotel and it meets all legal requirements, the city would rebate hotel occupancy, mixed beverage and sales taxes collected at the hotel and dedicate a portion of the tax increments for EaDo's Tax Increment Reinvestment Zone to help finance construction of a pedestrian bridge connecting the hotel to the convention center.
Financing challenge
Getting financing for such a big project could be a challenge.
In post-recession times, financing for commercial development is available again but harder to get than before, said Dan Bass, managing director in the Houston office of FBR Capital Markets.
"You have to have a really good balance sheet and business plan, and you might have to put up more equity," Bass said.
In the case of a hotel, you would have to offer compelling evidence of the need for it and find a quality hotel chain to agree to run it, he said.
Another big project for EaDo, the Sister Cities Promenade, is still in the discussion phase, but there is considerable local and international interest, Parker said.
The proposed promenade would be a linear park 80 feet wide and six blocks long. It likely would contain gardens, water features and sculptures, said Ellen Goldberg, president of Sister Cities of Houston, a nonprofit umbrella group for 17 international cities that share characteristics with Houston, such as ports, and take part in educational and cultural exchanges.
Each sister city would make an artistic contribution to the promenade.
The promenade would lead up to the Dynamo stadium with a plaza that pays tribute to soccer, Goldberg said.
"The promenade ties in beautifully to the stadium," she said, "because soccer is the most international sport."
Sister Cities is raising money from private and corporate groups. And local photographer Jim Olive, who has taken on a leadership role in the planning, said two international interests already want to develop alongside.
The 20,000-seat Dynamo stadium, which broke ground last month, is being built on public land. The Dynamo will pay $60 million for its construction, and the city and county will spend $10 million each on infrastructure, with money generated from the Tax Increment Reinvestment Zone surrounding the stadium.
Louis Macey Sr., who sold the Dynamo stadium land to the city, believes EaDo is particularly well-suited for moderately priced, low-rise residential development catering to young downtown workers.
"EaDo is closer to the center of downtown than Midtown," he said.
Macey, a former city councilman, said the city should implement an economic development program with incentives to entice developers to build residential projects in EaDo. Otherwise, he said, rising land prices could inhibit new residential development.
A good number of Houstonians have already discovered EaDo.
Colby Van Cleave, general manager of Lucky's Pub, said that his bar, along with Cork Soakers wine bar and Warehouse Live music venue, expects 15,000 people for the EaDo St. Patrick's Day Festival. That would be 3,000 more than last year.
Will Smith, a partner with the Little Woodrow's bar chain that expanded into EaDo earlier this year, said parking is another factor that needs to be addressed.
"You know Houston," he said, " 'If I can't park, I'm not going.' "
Courtesy of Houston Chronicle
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