Developer plans urban-style enclave in Energy Corridor

A Houston developer wants to bring a bit of urban sensibility to the Energy Corridor, a section of west Houston known for its suburban office campuses, chain-filled strip malls and outsized apartment buildings.

The developer, PM Realty Group, is committing $1 billion to building a bustling mixed-use community of upscale apartments, outdoor restaurants, hotels and high-rise office towers housing companies seeking to recruit a younger generation of workers who value the outdoors, collaboration with colleagues and an abundance of amenities.

The company says the new development, which it has christened Republic Square, will give the area a "soul."

"We saw an opportunity to create a heart for the Energy Corridor," said Dan Leverett, executive vice president and managing director of development, said this week during a presentation outlining the project at the company's downtown offices.

The developer, along with a team of national consultants, designers and planners - some of whom helped develop the commercial district of The Woodlands - has spent the last 16 months creating a master plan for the 35-acre site along Interstate 10 that formerly housed the chemical operations of Exxon Mobil Corp.

Construction is scheduled to begin next year, and the first office building could break ground before the company finds a tenant to occupy it.

Yet the timing is complicated by the ongoing slump in crude oil prices, which is slowing demand for space in the area dominated by energy companies. As a result, there's a growing amount of empty office space in west Houston.

At the end of March, the amount of available office space in the Katy Freeway market area reached 26 percent, up from 14 percent the same time last year, according to commercial real estate firm Savills Studley, which specializes in representing tenants.

"There are not as many deals as there were a couple years ago," said Mark O'Donnell, executive vice president of the company's Houston office. By and large, those deals involve companies that are moving because their leases are expiring, not because they're growing, he said.

O'Donnell noted four new office buildings looking for tenants within a "stone's throw" of the PM Realty site.

"It's just a lot of space out there," he said.

Leverett said Republic Square is a long-term project that will be developed over perhaps 10 years.

The property, formerly home to ExxonMobil Chemical Co., is between Interstate 10 and Memorial Drive, bordering Terry Hershey Park, a 500-acre public park that winds through the Energy Corridor.

Walkable environment

PM Realty, which plans to tie its development into the park, aims to create a walkable environment. The layout arranges buildings around a series of open, public spaces and a system of pathways and tree-lined streets that connect the development to the surrounding area. A central public square will be lined with restaurants and greenspace, and an existing lake will be incorporated into the project.

The project will stand in contrast to other developments in the Energy Corridor.

As it is now, the area comprises a series of large, "isolated tracts that don't interact," said Alan Ward with Sasaki Associates. The Massachusetts-based firm, which is also one of the firms designing a master plan for the Energy Corridor's management district, has been hired as the landscape designer for Republic Square. Other consultants on the project include national firms Elkus Manfredi Architects and Pickard Chilton.

The buildings there will be laid out in such a way that encourages walking, Ward said.

"What really matters is the fabric that ties them together," he said. "That I feel is what we're going to do much differently than what exists today."

The developer is taking an urban approach to the site by combining as many as 800 residential units with five office buildings totaling 2.6 million square feet, two full-service hotels with connected conference space and 100,000 square feet of retail space including a fitness facility. The scale of the buildings will be in the 14- to 16-story range, though some could be shorter or taller.

The design and amenities incorporated into Republic Square will be a draw to companies seeking a dynamic office environment, said development consultant Tom D'Alesandro, one time president and CEO of The Woodlands Development Co. and now president of Blakefield LLC.

Office workers, particularly millennials, place a higher premium on workplace environments, he said.

PM Realty said "the capital is currently in place to develop the entire project," but it would not reveal specifics.

New type of street grid

The first phase, to include an office building, parking garage, hotel and conference center, fitness facility and additional retail, as well as the public square, is scheduled for completion by early 2018, the company said.

The site will have a new street grid system that the developer said will help alleviate congestion despite the higher density of the project.

Exxon Mobil had about 700 employees who worked on the property previously, said Clark Martinson, general manager of the Energy Corridor District. In the new complex, he said, "We'll probably have 1,000 people living on site and a couple thousand people working on the site and hundreds of people visiting daily."