It was probably the best-mowed waste of space in Texas. Local residents always wondered how 324 prime acres sat manicured and dormant for over 20 years in one of the fastest-growing suburbs in America, explains long-time Houston developer Carl Stephens, who knows the odd history behind the tract.
In 1983, the property was purchased by Texas Management Co. for roughly $4 per sq. ft. in hopes of turning it into a mall — but then Houston's economy crashed. A quick foreclosure and some 16 years later, it sat in the coffers of the FDIC until the property was finally purchased in 1999 for an amazing 46 cents per sq. ft.
Undermining all normal real estate fundamentals, the land is centered within a five-mile radius containing 250,000 people with an average annual household income of $94,000. “Thein this area blows my socks off,” says Stephens. Yet, many real estate professionals wouldn't touch the property.
There were many preconceived notions about the land, says developer Randall Tuller, who is president of Houston-based Canyonlands, Corp. “Localsaid no one would ever want to develop here because while the land sat with the FDIC, the surrounding area grew like wildfire,” says Tuller. “Combined with no utilities and extreme commercial development all around, many local retail developers dismissed the tract as too much, too late.”
However, when Houston-based Johnson Development Corp. scooped up 205 acres of the tract in 1999 for residential housing, it worked with the surrounding municipal utility district to develop the much-needed utility infrastructure. With utilities in place, Canyonlands bought the remaining 119 acres in 2001 for an undisclosed amount.
“From a commercial standpoint, this was an extremely challenging project,” says Tuller. “We had supermarkets, big boxes and retail all over the place.” The small five-mile circle around the property is home to 16 big boxes, nine supermarkets, seven drug stores and hundreds of smaller retail stores.
Since local commercial retail developers kept turning a cold shoulder to the property, Tuller decided to go national and also scoured the marketfor a key to the riddle that seemingly plagued the property. The answer was dinner and a movie.
The five-mile radius around the property had everything except a centrally located movie theater, yet most of the local and national chain theaters weren't interested because they didn't want to cannibalize their existing theaters in the area.
In 2004, Canyonlands courted Rave Motion Pictures and its partner, Ohio-based Continental Retail Development, which saw the untapped potential. Soon thereafter, The Streets of Yorktown was born, a 35-acre, $50 million open-air lifestyle center anchored by a 15-screen theater and surrounded by 142,000 sq. ft. of specialty retail and restaurant space.
Canyonlands also sold another 33 acres for a new style of dense multifamily housing that fits 10 duplex townhouses on one acre. Combined with the fact that there are also 3,300 new homes within two miles of the property, the well-manicured, gaping hole that sat vacant for over two decades will now infuse $350 million ofdevelopment into the booming suburb.