December 4, 2012
A Reboot for River Oaks Project
by Nancy Sarnoff
A national developer known for big real estate projects combining housing, shops and offices in a urban-style environment is preparing to relaunch a Houston project originally planned before the recession. San Diego-based OliverMcMillan will start construction in the spring on River Oaks District, a $450 million development slated for 15 acres along Westheimer, just a half-mile from the Galleria mall, the company said Monday. Mayor Annise Parker said the project is further proof of "the ongoing strength of the Houston business climate." The complex will be designed to appeal to affluent residents of the surrounding neighborhoods as well as international travelers. The high-end shops will include "the world's luxury retailers," the developer said. Plans call for 270,000 square feet of retail, high-end restaurants, outdoor cafes and a movie theater, along with 100,000 square feet of office space and 279 residential units. The project will create a "walkable city-street environment," the company said, with individual retail storefronts spread throughout a cluster of buildings, likely no more than five stories tall. Trees planted along the streets and building canopies will help provide shade. "It's about creating an urban experience," said Dene Oliver, CEO of OliverMcMillan. "The thing that's different about us is we're very design-centric and focused on great place-making and experiences," he said. The look of the complex is expected to be contemporary with some Texas flair in the way of landscaping and building materials native to the state. New to Houston As many as 80 shops and restaurants will occupy the project - most of which will be new to Houston, Oliver said. Retailers will include "both American brands and European brands that you can't go anywhere and see in Houston right now," he said. Florida-based iPic Theaters, an entertainment venue combining a cinema/dining concept, restaurant and lounge, will have a spot there. River Oaks District will replace about 675 apartments at 4444 Westheimer. Demolition of the apartments is planned to begin in the first three months of next year. The project, which could open as early as fall 2014, was envisioned several years ago. OliverMcMillan contracted to buy the land in 2005 and began predevelopment work. In the summer of 2008, the firm decided to shut it down. "It became clear to us we were heading toward a meltdown," Oliver said. "We basically battened down the hatches, improved the apartments and anticipated a better day." When the company decided to restart the project - with a smaller plan the second time around - it went to the city for help. Sales taxes City Council granted the developer a rebate of up to $19 million, assuming stores in the project will generate that much in sales taxes. "This investment will create jobs, have a positive impact throughout the local economy and result in improved infrastructure for the area," the mayor said. The River Oaks District design team includes Gensler, Papageorge Haymes of Chicago and landscape architecture firm Hoerr Schaudt, which is working on an 18-acre botanical garden in Hermann Park. Equity has been secured, Oliver said. Bank of America is providing a loan for the debt. OliverMcMillan has designed and developed and manages more than 8 million square feet of projects valued at upward of $3 billion. The company has about $2 billion in real estate projects under development in Houston, San Diego, Honolulu, Atlanta, Chicago, San Francisco and Phoenix.