By all accounts, CityCentre has been a success. The mixed-use project with 2.1M SF across 47 acres is an example of what developers hope for from a mixed-use project. CityCentre has not been without issue though. Taking a closer look at CityCentre (with help from a recent study by ULI and Allen Matkins) reveals key insights into how to improve mixed-use development.
Midway chairman Brad Freels (above with his family) says Midway’s commitment to develop most of the properties on-site proved invaluable. Brad says the mindset from the outset was: “If we’re going to do this, we had better be prepared to do every element of it.” Many mixed-use projects planned around Houston never moved forward because they involved partnerships and complex deals with too many parties. Having one developer handling it all (and committed to seeing it through no matter what) ensured it got done. But not everything went smoothly.
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When CityCentre began, Midway was unsure of how much space could be absorbed or how dense the project should be. In hindsight, Midway could have increased the density to achieve even greater success. The original office buildings were five stories. Demand could’ve supported 10. The newest building planned for the site will have 20.
The density of the development has caused critical issues in parking. CityCentre taught developers that parking needs active management. Originally, it offered free valet, street and garage parking, but it was quickly discovered that street spaces were being used by long-term office users, not the intended short-term retail users. To address the problem, CityCentre added meters.
Compounding parking issues was the fact that mixed-use environments generate higher demand for parking because patrons often linger after dining, which can be a major problem during peak times. CityCentre solved the problem by implementing a coordinated valet program that serves all restaurants, avoiding conflicts and resulting in more efficient use of parking during high demand.
Midway conceded leasing should have been approached in a more holistic way. Initially, it focused on leasing the office and restaurant space, which caused serious problems when the recession hit and soft goods retailers cut back. More emphasis should’ve been put on leasing soft goods retail space earlier, the ULI study found.
Timing also hit Midway in construction contracts, which it signed at the top of the market and delivered at the bottom. It may have been better to sign during the depths of the recession, but at that point the project may have been difficult to get financed, so it may not have happened at all.
As population growth continues to shift Houston west, Midway's commitment to making CityCentre the best possible mixed-use development is paying off. Through hard work and willingness to learn, Midway has transformed a defunct second-tier mall into one of the city's brightest spots.
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