The Former Texaco Headquarters: A Case Study In Mixed-Use Rebirth
Limestone vaulted arcades, Tuscan columns and deep window ledges highlight the historic frame of The Star, a century-old landmark building recently converted into a residential tower in Downtown Houston.
Yet, beneath the beauty lies an incredibly difficult redevelopment process. Redevelopment of historic property presents a complicated combination of what needs to be done, what can be done while meeting tax credit guidelines, what developers want to get done and what it will cost.
The Star, Texaco’s headquarters in the late 1980s, serves as a case study of the challenges of converting a historic building into a mixed-use development.
Reactivating Historic Spaces — To Change Or Not To Change?
Executing the redevelopment dream requires patience and tough decisions, Provident Realty Advisors’ Kip Platt said. Platt is the project development partner over The Star. A key part of this redevelopment was selecting which spaces to renovate and which spaces to leave alone.
Provident is already on year seven of work at The Star, a 286-unit luxury high-rise community, and it isn’t done yet. The company bought the property in 2012, after it had stood vacant since Texaco moved out in 1989, and completed converting it to multifamily in 2013. That redevelopment focused on the build-out of the residential units.
In 2016, the site underwent another round of renovations, which modernized all of the units and common spaces and added new on-site amenities, such as an outdoor pool and an attached garage.
Last year, it turned to the basement, which had never been finished out. Provident Realty Advisors made a sizable investment to build out that space.
The company created a game and lounge room in the basement, inspired by speak-easies with gentle lighting. The space is all new but brought back in a historic feature — an authentic 12-foot-long TEXACO illuminated sign is a focal point of the space. Designer Lauren Parsons purchased the sign from a former Texaco employee, Jim Conard. The sign was designed for a gas station that never opened in the ’80s, he told Parsons.
“He was happy to send it back home,” she said.
The game room walls are splashed with other memorabilia from the oil company. The bottom level also features a virtual golf simulator, a dog spa, a theater and a poker room.
Parsons also redesigned the top floor lounge area, which includes an open meeting and kitchen space, a sitting area with a television, an Equinox-inspired fitness center and an outdoor rooftop lounge.
The final piece of the redevelopment will include an 18K SF full-service restaurant on the ground level by popular restaurateur Benjamin Berg, who also runs B&B Butchers. Stepping into historical mixed-use is new for him. His first location for B&B Butchers was a free-standing industrial building on Washington Avenue and Sabine Street. On that project, he had more build-out options (like putting things on the roof) and didn't have to consider how space engages with another space.
But when you’re working with historic space, not all sought-after design elements will make it to the final draft.
For example, Platt wanted to add a balcony to the units that featured deep window ledges. But as Provident began to research the option, it discovered that it could cost upward of $2M to repair the Renaissance Revival-style exterior finishings if they were damaged, and the finishings can only be rehabbed by Italian designers. The add-on was not worth the financial risk so the developer skipped it, Platt said.
Tax Credits: A Boost But Also A Pain
Many developers dive into historical redevelopment projects in order to maximize state and federal tax credits. However, the guidelines can be strict, the process often spans years and developers must be willing to partner with regulators to get the final stamp of approval.
"If a building still has a lot of intact historic fabric it is important to understand what must be retained and preserved before any work begins," Texas Historical Commission Director Chris Florance said.
The Star was added to the National Register of Historic Places in 2003 and is an active tax credit project, Florance said. The National Park Service’s guidelines for the rehabilitation of high-rise buildings, one of the most common historic redevelopment types, say the building must be 50 years old to be listed on the National Register or awarded the state's Recorded Texas Historic Landmark designation.
The first phase of work on The Star, which includes everything except for the first-floor tenant space and the rooftop amenity space, has already been certified for the State of Texas Historic Preservation tax credits. The project cannot be certified for federal credits until all of the work is completed.
The developer has been working with the THC since the asset was purchased in 2012, Florance said. He said it is critical that anyone interested in the historic tax credits or other related programs should contact the organization before finalizing any plans.
Since much of the building had been gutted before it was purchased by the current developer, there was not a great deal of historic interior fabric left to preserve, Florance said.
The most historically significant features included the first-floor entry, the original elevator lobby and the overall exterior facade. The exterior work involved cleaning, repair and restoration of masonry and the replacement of the non-historic windows to be considered for tax credits.
As the design process began for the restaurant, Benjamin, Berg discovered that he was in for a big challenge.
Situated on the corner of San Jacinto and Rusk streets, Benjamin will occupy the former lobby of the pre-war building. The original wing of the building was designed by the New York firm of Warren & Wetmore, which is also responsible for Manhattan's 1913 Grand Central Terminal.
The build-out includes constructing two kitchens, relocating the elevator and adding a balcony to overlook The Star’s heated outdoor pool.
Berg found that some of the tax-related requirements were more difficult to overcome, and he had to find creative workarounds. In order to retain and expand the original flooring, he will implement a sealing system to level it with the new flooring.
Other regulations disallowed structures or objects from being placed within 15 feet of the floor-to-ceiling windows, Berg said. Developers are also not allowed to closely mimic the previous use without pictures and other documents as a reference. The restaurant's design takes inspiration from the original black-and-white flooring but will not re-create the former lobby.
Benjamin, which requested construction permits in late December, has faced delays as it worked through the redevelopment constraints. It was originally scheduled to open in 2018 but is now slated to open later this year.
Making Everyone Play Nice
Even when there is no historical component adding hurdles, mixed-use developers have to figure out how to accommodate the space to welcome customers without disturbing the other tenants. Common residents’ concerns include parking, increased building traffic and additional odors, Platt said.
The newly added parking garage in The Star will offer free valet for the residents' guests and designated spots for customers. Benjamin will feature a cold room that will be used to store trash and contain the smells.
You Can't Buy Special
With all the pain, why does anyone bother?
It is the built-in character of historic buildings that makes it worth the trouble, Berg said. Many features of older buildings would be too expensive to build today. The cost for The Star's grand windows would probably range from $50K to $100K per window, Berg said. The all-in renovation budget for Benjamin is about $6M.
Plus, buildings like the former Texaco HQ are unique.
"There is nothing like it in Houston," Berg said. "If you tried to build it yourself it would lose the specialness of it."