[CHRON] House of Blues coming to Houston

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Houston Pavilions signs first big tenant

By NANCY SARNOFF
Copyright 2006 Houston Chronicle

A proposed $200 million real estate project near the convention center has landed its first big tenant, moving the project a step closer to reality.

The developers of Houston Pavilions, a shopping, entertainment, office and residential complex planned for three blocks of prime downtown land, planned to announce at a press conference Wednesday that House of Blues has signed the first major retail lease in the project.

Developers Geoffrey Jones and William Denton, who set the wheels in motion for the Pavilions more than two years ago, said they expect to begin construction this spring.

Spanning three blocks along Dallas Street between Main and Caroline, the mixed-use project will include 350,000-square-feet of shops and entertainment destinations, a 12-story condominium tower and a 200,000-square-foot office building, according to the developers.

"This will become the focus of downtown," said Denton, a Los Angeles-based developer who also built a successful shopping and entertainment complex in Denver, near that city's convention center.

The ambitious Houston project would fill an empty zone of what's now three parking lots. The property is situated between an area of huge public improvements. At one end is the convention center, a new hotel, the basketball stadium and a planned central park, and at the other a cluster of skyscrapers.

The Pavilions developers are hoping to create an island of shopping in an area where retail has consisted mainly of the Downtown Foley's department store and the Shops at Houston Center, both of which largely cater to workers in the nearby office towers.

Nick Hernandez, a real estate broker specializing in retail, said the developers could leverage off House of Blues and Foley's to create a successful project.

"If they can put the tenant mix together, I think it would be great for downtown, said Hernandez, a broker with Page Partners who's not involved in the Pavilions development. "A significant project like this could turn downtown around."

'A people place'

The retail space in the Houston project will be housed in low-rise buildings connected by walkways. A central corridor will run the length of the project . It will be served by an adjacent 1,600-space parking garage.

"It's not only a retail and entertainment project, but it's a people place. It's an environment you can watch people — to see and be seen," said Denton.

The residential tower and an 11-story loft-style office building will be constructed above the retail space.

The developers said they are negotiating with a residential builder which would construct the tower. Trammell Crow Residential was linked to the project in a previous news report, but the company wouldn't say if it's involved.

While ground breaking is set for the spring, the developers first will need to lease about half of the retail space, a typical requirement before starting a project of this scale.

"We're very confident we will be there," said Jones, explaining that the current leases and ones in negotiations satisfy the 50 percent requirement.

Along with House of Blues, a minor emergency clinic has agreed to occupy an additional 37,000 square feet of space.

House of Blues will be located in a 43,000-square-foot, multi-story building on the eastern side of the project. It will include a live music venue with space for about 1,500 patrons, a restaurant and bar, a private party room and a retail store that sells souvenirs, music and clothing.
First Houston location for venue

This will be the first Houston location for Los Angeles-based House of Blues Entertainment, a national chain of venues famous for its blues, rock and jazz concerts and Sunday gospel brunches.

Liam Thornton, the company's senior vice president of development, said House of Blues often chooses changing inner-city areas for its new outlets.

"We like to go into urban areas," he said. "We like to be pioneering."

With its roughly 3,700 residents, downtown Houston still doesn't have the critical mass of residents that retailers typically require to open new locations. But Thornton said he's not worried.

"Because we're destination entertainment, we're basically a traffic generator," he said.

Indeed, the developers said the venue will attract customers from far beyond the city center, which will help bring in additional retailers.

House of Blues is expected to open by the fourth quarter of next year, when the developers said the Houston Pavilions will be completed.

The project was conceived more than two years ago. But the developers recently purchased the land for just under $21 million.

Hellmuth, Obata +Kassabaum is the project's primary architect. Dallas firm Larguarda.Low is also involved.

The developers also received financial assistance through an $8.8 million development grant from the city of Houston and $4.4 million from Harris County.

City officials and other industry experts said the project will act as a catalyst for downtown retail.

The Houston Downtown Management District approved a $1 million grant as part of a program established last year to provide financial assistance to developers bringing retailers to downtown.

The owners of the Sakowitz building at the corner of Main and Dallas also received a grant under this program.

Jeff Kaplan, a commercial real estate broker with Wulfe & Co. who is leasing the nearby building where national retailer American Apparel is expected to open a store, said these new retail projects will help connect the convention center and some the new sports venues on the eastern edge of downtown to the existing facilities on the west.

"Dallas is going to be a major pedestrian thoroughfare connecting the convention district to Main," he said.

nancy.sarnoff@chron.com