Town Center details; some interesting facts and assumptions

Keri just put up an interesting post (look below this one) about the Town Center ground-breaking last week; I missed the event because I was out of town, but it sounds like Prescott did a heck of a job of creating some excitement about the project. But now that the first existing apartment buildings have been felled by the bulldozer, some of the project's specifics are finally becoming clear. Prescott says it's targeting a six-or-so-screen movie/dinner theater, a small grocer and a bookstore as anchors for the 250,000-square-feet of retail planned (none of which have been announced yet), another 50,000 square feet of office space and about 1,700 apartments/condos/townhomes. The projected $400 million project (built-out cost) also will feature a clock tower that turns red when the LH football team wins.

Even more specifics: the townhomes will be priced between $300,000-$500,000, some zero-lot-line homes will be between $400,000-$700,000, the apartments will rent for about $1.35-$1.45 per square foot ($1,350 for a 1,000-square-foot apartment), and the retail rental rate is expected to be $30-$40 per square foot. Just by way of comparison, the retail at Hillside Village (Mockingbird & Abrams), which also has a big neighborhood retail component, rents for about $20 per square foot. You can also expect to see about $20 million spent on parks and jogging-type trails on the 70-acre project, of which 20 acres or so will be parkland (somewhere in there will be a public amphitheater, too). So there you have it — that's the master plan.

Jerry Allen told the ground-breaking crowd that he expected build-out to be 2-3 years; that's the same thing he told us shortly after he took office. But the city is planning for a 19-year build out, meaning it's expecting to take up to 19 years to completely build everything in the master plan. I suspect Prescott is hoping for a little quicker completion, but I don't see any way the project will be completed in three years — absolutely no way. Prescott will be doing well to have the first apartments, a retail anchor or two, some office space and the parks done by then — and I do mean they'll be "doing well" if that much is done in three years. With the impending credit crunch, a general slowing of the economy and the difficulty of leasing up a project like this far from major thoroughfares (like Central), it's simply going to take awhile to realize the dream.

The plan looks great on paper, but as with every real estate project, the devil is in the details — and starting with the anchor retail spots, Prescott can expect tough sledding in getting started since there are very few movie/dinner theaters, bookstores and small grocers left. It's not going to be impossible, that's for sure, but it's going to be tough.

Comments

[Jeff Siegel]

And, as noted, let's not overlook the possible competition from the new Glen at Preston Hollow -- http://backtalkprestonhollow.typepad.com/back_talk_preston_hollow/2007/11/willow-creeklak.html

[Bill Kennedy]

They are *still* targeting a "six-or-so-screen movie/dinner theater" with a new SMG going up less than 2 miles away?! I need to look up that definition of insanity again.

[Michael Mosteller]

Get an Alamo Drafthouse in there Bill and we are talking apples and oranges as far as a movie/dinner theater. Alamo would kill SMG if it came to Dallas. Better food, incredible beer selection, better film and pre-show presentation, better niche movie selection to get people in at non-peak hours. Alamo has one of the best per screen averages in Austin. It constantly sells out all its shows. Can SMG say the same? And don't get me wrong, I like the SMG but they are way behind the Alamo. Alamo fans are intensely loyal. Maybe that is just Austin but they make you want to come back every time. I typically only hit the SMG if I am looking to kill 2 birds with 1 stone. Give me an Alamo near me and I will make it a point to go each time I want to catch a flick.

Why is it that crazy to have one be a neighborhood theater? Highland Park's theater is around 2 miles from the Northpark megaplex. Different audiences. In my neck of the woods, the Galaxy is across the highway from the Hollywood theater yet both are still in business.

[AMF]

Too bad the area in question is dry and Alamo Drafthouse would have to operate as a private club.

[Michael Mosteller]

AMF, that isn't that big a deal. When I was looking into trying something like this at Casa Linda, my buddy in the wine industry helped me with how I would get alcohol in a dry area. In short, you have you have to get your alcohol from a wholesaler like Sigels and pick it up vs. having deliveries. For TABC approval, you sign up through Unicard or an entity like it and are charged $7-$10 per client. Most restaurants eat that cost rather than pass it on to the consumer. El Fenix in CL has a pretty extensive bar and all you have to show is your Unicard. In LH, Picasso's is the same. You ask people for their ID/Unicard, check them in the system, or set them up. Sure it takes some extra effort but Alamo was looking at CL so I doubt they think it is that big a problem.

[Bill Kennedy]

Michael... Quite frankly, I have not the time or energy to explain yet again why the studio distributors will not do this.

I spent an entire thread months back explaining the economics and old boy rules. My wife is in the biz and her clients are Alamo and SMG, as well as countless others. But, because there is no search feature here, and the tags don't flag comments, I cannot provide you a link for your edification and enlightenment. And BTW, "dryness" has zippo to do with it -- it's all based upon who gets product within a given radius in a market. It has nothing to do with what Prescott wants to do. Thus, my reference to "insanity" (which is doing things over and over again and expecting a different outcome).

Jeff or somebody on Gaston... please help me out... you know it was all there. Linky, please?

[AMF.]

BK please post the link if you find it.

I understand LHTC is a big mess from the start. Who is going to pay for a townhomes priced between $300,000-$500,000, or a zero-lot-line home priced at $400,000-$700,000 to live next door to a section 8 or what amounts to section 8 housing south of the stuff getting torn down. I don't think they will be able to rent those apartments at those levels. LH doesn't have the dynamics to attract those kind of apartment tenants. Its too quite and provincial around here. LH so much wants to be something its not. Also that planned retail line up is not going to knock the socks off the investment bank that is going to have to come in and do the permanent debt. All the good tenants that people want in LHTC are going in further west up and down Central, where the traffic count is higher and the demographics are better. In the end LHTC will be a huge new apartment complex with half the retail and train station near by.

[Jeff Siegel]

That's what I'm here for -- http://backtalklakehighlands.typepad.com/back_talk/2007/07/prescott-realty.html

By the way, if you want to search (until we get the search feature working, and I am spending way too much time trying to do it), use the categories on the side bar. Click what you think the category is (in this case, real estate), and then use your browser's search function to look for a key word (in this case, Alamo).

[Clay]

my guess would be that the people paying 300-500k for townhomes and 400-700k for zero lot line homes are the same ones building the 5500 sq ft all over LH. My observation is that there are large amounts of young professionsals who refuse to move outside LBJ and are willing to pay a little bit more (but cannot (or do not want to) afford HP/UP). Like it or not sleeply LH just may be in for some change. Not overnight change, but long term sutainable change.

[Bill Kennedy]

Thanks Jeff... better eyes than me!