Developer cites need to match the right services to mixed-use project

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Developer cites need to match the right services to mixed-use project


16.JUN.10

Ann Fowler

Read More: http://oakhillgazette.com/default.as...te=&ccat=&ccat

Terry Mitchell, president of Momark Development, says he's in the service business, not the real estate business. Mitchell spoke at the June 9 meeting of the Oak Hill Association of Neighborhoods, and said he looks for the services that can serve his developments. Mitchell said picking the right services for a mixed-use development can be a guessing game. Mitchell took a church in San Marcos and turned the 3-acre property into the Sanctuary Lofts, just blocks from Texas State University. With 500 students living upstairs, Mitchell had hoped to put in 15,000 square feet of retail. But he spoke to other developers who cautioned him that retail doesn't always work when you think it will.

Another snag was the lack of dedicated parking for those retailers. No one wanted to risk putting in a business that would have to rely on pedestrian traffic. Mitchell thought the residents alone could support a coffee shop, but the businesses he spoke with said much of their business comes from people who drive up to get a cup of coffee. The retail was reduced to 3,000 square feet — and included no coffee shops. Asked if Oak Hill's proposed town center would generate enough business if it was designed like the town center of Wimberley, Mitchell said it would be "very difficult." Mitchell said the Hill Country Galleria ran into problems with the severe economic downturn. The project went into foreclosure then was bought out. "The reason," said Mitchell, "is that the retail was not generating the revenues they thought it would." He added, "It's got great demographics, but it's much larger than the actual area of the retail that it's serving." The developers felt it would draw customers from 10 miles away. Mitchell said that has not been the case.

Mitchell is familiar with the sort of community outreach the West Park PUD owners have performed in Oak Hill. Momark Development has conducted numerous meetings with neighborhood groups who were disappointed that the Salvation Army's plan for 60 retirement homes was turned into Momark's plan for 123 to 145 lofts, cottages and townhomes at South First and Cumberland in South Austin. The Salvation Army could not afford its project, so it sold the land to invest in a project elsewhere. Meantime, residents have expressed concern with a doubling of the residences and an increase in traffic. Momark is also involved in the 56-story Austonian condo building at Second and Congress. Mitchell pointed to a picture of an awning, saying it took $75,000 in legal fees and six months of talks with the City of Austin to obtain it. Looking at it from a service standpoint, Mitchell is selective about the retail for the development. A downtown group suggested a furniture store and an electronics store, but Mitchell feels something like a pharmacy would be more successful. "I don't go to a furniture store every day," he said, but residents would find the ability to buy flowers, gifts and greeting cards useful.

[llamaorama]

I usually walk past the building mentioned in this article, small world right?