Axelrad Developers to Create Walkable Neighborhood in Houston’s East End

An ambitious group of entrepreneurs aims to transform a four-acre warehouse complex in Houston’s East End into a mixed-use pedestrian neighborhood that could become an example of socially responsible real estate development in one of the most gentrified neighborhoods from Texas.

Houston real estate company Concept Neighborhood plans to convert more than two blocks of mostly historic properties into a destination filled with hyperlocal businesses, retail boutiques, restaurants and small office spaces. Construction is set to begin in late 2022 on the redevelopment of the roughly 80-year-old buildings that once housed oil and gas equipment maker WKM.

The proposed redevelopment, which encompasses nearly 145,000 square feet spread over several sites around 201 Roberts Street, is just blocks from another Concept Neighborhood project, The Plant, a 20,000 square foot mixed-use development on Harrisburg Boulevard, approximately 1.5 miles east of downtown. Together, the projects could bring more change to the 16-square-mile East End neighborhood, where urban professionals are flocking, real estate values ​​are rising and new cafes, condos and storefronts are popping up in the once mostly industrial area.

Concept Neighborhood’s goal is to create a collection of small businesses reminiscent of the walkable downtown core of Houston or the Bishop Arts District in Dallas. The properties are just blocks from the MetroRail Green Line, unlocking the potential for a walkable neighborhood that city planners typically only dream of in Houston.

“It’ll be like Brooklyn down south,” said Jeff Kaplan, 43, director of Concept Neighborhood, which previously helped develop popular Midtown beer garden Axelrad with a handful of others.

Kaplan, who lives in the East End, has long been passionate about the concept that residents should be able to access most daily needs within walking or public transport distance. His co-directors of Concept Neighborhood – Dave Seeberger, a former private equity professional, David Kelley, co-housing developer and founder of a community bank, and commercial real estate lawyer Jeremy Roberts and former real estate broker Zachary Samet share his vision. The town planner and another Axelrad promoter, Monte Large, are also involved.

For an idea of ​​what Concept Neighborhood wants to create in the East End, take a look at The Plant, the adaptive reuse project that opened in 2020. Colorful murals advertise businesses at the interior, where splashes of pastel paint and hanging lanterns light up the corridors between shops and small offices.

In the morning, hip hop music emanates from HAM Barber Studio as a barber cleans up his tools for the day. Baristas on bikes arrive at Café Louie, where they whip up oat milk lattes alongside bakers who paint pastries with melted butter. Next door, at a bodega-style grocery store called Little Red Box Grocery, hipsters browse for locally sourced tortilla chips alongside residents of a nearby affordable housing complex who shop with food stamps.

In 2016, when Kaplan first came up with the idea for The Plant, he said in an interview that his goal was to create a project that wasn’t “just for yuppies moving into the neighborhood”. So far, it looks like the dream is coming true. Overall, 83% of businesses in The Plant are owned by women, minorities, or people living in the neighborhood.

“What we have here is a truly enduring example of community richness,” Kaplan said. “When a trader is an entrepreneur linked to the community, the chances of success increase. It’s not just about the money, our neighbors are heavily invested in these businesses.

Concept Neighborhood doesn’t just rent space, it aims to help small businesses that might not otherwise have the resources to set up a storefront in a standard commercial development. For instance, in The Plant, Concept Neighborhood has paid for a kitchen for one of its tenants, the Popston ice cream shop will open soon and will pay for a soon-to-be-built outdoor patio. Working with investment firm Next Seed, Kaplan also helped the owners of Cafe Louie raise capital for their new restaurant at The Plant. For some tenants, Concept Neighborhood entered into sliding-scale rental agreements, with rents increasing as businesses prospered. The developer also provided pre-cleared move-in ready spaces for tenants, such as The Second Shop vintage store, to minimize tenants’ expenses and settling-in schedule.

The objective is to amplify this approach during the redevelopment of the WKM. The property’s historic designation will allow developers to leverage tax credits worth a potential $8 million over several years, according to Concept Neighborhood. The location in an opportunity area will also allow the developer to defer capital gains taxes related to their investment.

Concept Neighborhood purchased 16 buildings in the former WKM campus in December from the Grenader family, known for helping convert a former textile factory into a mixed-use project, The Heights Clock Tower, among other projects in the Houston area .

WKM properties have been in the family for more than 45 years, said Jonathan Grenader, 71. A few years ago, he and his wife, Nonya, a retired architecture professor from Rice University, listed the properties on the National Register of Historic Places. , enabling them to access tax credits to restore parts of the buildings into office and retail suites. But as they transitioned into semi-retirement, the two didn’t have the time or resources to revamp the entire campus, they said. Instead, they sought to sell to like-minded developers.

“We really admired the energy of (Concept Neighborhood) and their commitment to continuing a certain legacy of the neighborhood, bringing new things and existing things together,” said Nonya Grenader, 68.

Concept Neighborhood plans to redevelop the WKM campus over the next four years. The site’s handful of manufacturing tenants will eventually leave the project as it transitions from heavy industrial uses, Kaplan said.

Construction is expected to begin in the fourth quarter on the first phase, which includes 50,000 square feet of retail and 23,000 square feet of office space, according to the developer. The redevelopment is expected to be completed in 2026.

Like the rest of the East End, the neighborhood around the WKM campus is a disconnect between modernity and industrial relics of a bygone era when the neighborhood served primarily as a manufacturing and shipping hub near the Houston Ship Channel. Less than a mile from the WKM site, the former Maxwell House coffee roasting factory towers over mid-rise warehouses, abandoned properties with overgrown grass, peeling paint and half-rusted structures.

In between, restored craftsman-style bungalows, art studios, hip cafes and modern townhouses are signs of change in a neighborhood where median household income has more than doubled in the past decade. , according to census data. for ZIP code 77003.

The East End and adjacent East Downtown neighborhoods are dotted with plans to convert industrial sites into residential lofts, retail stores, cafes, restaurants, small offices and coworking spaces. North of the bayou, the 150-acre mixed-use development of Midway, East River, will radically reshape the north side of the East End while the non-profit Buffalo Bayou Partnership has launched a 20-year program of worth $200 million Master project to redesign the east side of the bayou

Many of these changes build on the expansion of light rail to the East End. Between 2017 and 2019, property values ​​jumped 30% on land adjacent to the light rail line along Harrisburg Boulevard, said Veronica Chapa Gorczynski, chair of the East End district economic development group.

What is different about Concept Neighborhood’s approach is its efforts to create a transit-oriented neighborhood hyperlocal businesses “where everyone is from the community and can get around without being dependent on the car”.

“And,” she added, “that’s the part where they’re really innovating and not just for the neighborhood, but I think they’re innovating for Houston.”

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