Photo: Kim Christensen/For the ChronicleA struggling national economy and tight credit market have taken their toll on the proposed WaterLights District in Pearland, which announced Wednesday that Amegy Bank has posted the property for foreclosure.
Plans for the mixed-used project at Texas 288 just south of Beltway 8 included offices, restaurants and retail and residential components. But perhaps the most anticipated aspect of the development was the Presidential Park & Gardens which eventually was to have featured giant busts of all the U.S. presidents.
All that, however, came to a halt after negotiations with the bank fell through on refinancing the loan and working out the release of potential legal claims, said David Goswick, executive director of Boardwalk at the Spectrum LP, the project's developers.
Goswick said the developers are hoping to find a capital partner to come to the rescue.
“The fuse is lit, and we have a short time period to work a deal with the bank,” Goswick said. “If (Amegy officials) are asking the full sticker price, they won’t get that from anyone.”
Boardwalk and the Spectrum LP purchased the 48-acre site in February 2007 for $5 million in cash and a $10 million bank loan, Goswick said. That translated to $10 per usuable square foot.
“Today, the same property is only worth $4 (per square foot) to $4.50 per square foot, or approximately $5 million," Goswick said.
“The property’s value has taken a $10 million hit, and it’s (value is) about 33 percent of what we have invested in it,” he said.
Despite the tightened credit markets early last year, the developers had “remained optimistic that the WaterLights District and the Presidential Park & Gardens could be a successful destination development,” Goswick said.
But in February 2009, the bank rejected the developers’ request to extend the loan for another year and later increased the interest rate to 18 percent, from the previous 7.5 percent, he said.
“The inflated interest rate, combined with the current commercial real estate crisis, made it impossible to succeed,” Goswick said.
Goswick’s partner, Richard P. Browne, director of planning and development at Boardwalk at the Spectrum LP, put it bluntly in an e-mail.
“When Amegy Bank’s parent bank (Zions Bancorporation) receives over $1.4 billion in (federal Troubled Asset Relief Program) money and can borrow money at 1.5 percent, then turn around and charge 18 percent, it is a sin and a shame. The numbers don’t work anymore."
Browne added, “Unfortunately, the banks stopped lending to everyone and we ran out of time.”
In an e-mail, an official at Amegy Bank declined to comment.
“As a matter of customer privacy, Amegy Bank is unable to comment on the specifics of loan agreements with individual customers," bank spokesperson Leigh Akin stated in the e-mail. "It’s important to note that we work for many months with our customers placing significant time and emphasis to exhaust all other alternatives prior to posting a property for foreclosure.”
Pearland Mayor Tom Reid said the WaterLights situation is disappointing news for the city.
“We had expected it to be a significant draw to Pearland as a destination city,” Reid said. “The people involved certainly did everything they could to be successful. It’s just a sign of the economic times.”
Join in the conversation. What do you think about the development?
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Comments
What a Shame
Even though I wasn't looking forward to the increased traffic, this would have been a great addition to our city. I'm sorry for their misfortune.
With Sam Davis
Waterlights
Unfortunately this was a project that was not to be. Project lacked financial backing and was started at worst possible economic time. The Developer also was rather new at his craft which further hindered the project and its backing.
The retail area of the Spectrum will happen one day with patience on the part of the developers. Unfortunately, the timing right now is not good with tight capital markets and a slow economy.
Patience is the word.
On the bright side...
...maybe Hwy 288 will be expanded and ready by the time a new Waterlights project starts up again.
You heard it hear first!
This is what I have been saying for the last few weeks about these projects. I am not proud, I am disappointed. We have/are spending tons and tons of money on these two projects and progress has not materialized because of various undisclosed reasons. Is it the economy? Maybe; but, I believe there is more to this story than what Robert has just scratched on the surface.
I think it is time that we step away from these projects at BW/288 and begin spending our money where it will do Pearland some good. Let’s support the areas that have a more natural growth and enhance those areas for better mobility and sustainability. Let’s revisit our older neighborhoods that have been neglected over the years and enhance them by fixing the roadways adding sidewalks. Bike trails along our major roadways would also be a nice addition, but let’s just stop spending money on top of money for two projects that died well over 3 years ago. It is a waste of tax dollars and the real cost is the neglect other areas have received!
Use the money where needed!!
I agree with george. Sidewalks in the rest of town would be nice. Smooth streets would be nicer.
I agree!
I wholeheartedly agree with everything in your post. Some infrastructure improvements would be great. Improve 518 and the side streets, add sidewalks, lamp posts landscaping, etc.
its bad news
This project would have been a great project and would have brought more business into the empty land underbeltway 8.
Hope something good happens and this project will be alive and gets finished ASAP.
I dont think the city is doing enough. City of Pearland, Do something ? or make the west a new city.
SCR Developer do something, just like you sponsered FM518 from Kingsley to FM521.
Amegy Bank should be thrown out of pearland.
I didn't realize Amegy Bank had a location in Pearland ?!?
I didn't realize Amegy Bank had a location in Pearland ?!?
I'm sorry to let it go
However, I agree with previous posters that much more needs to be done for other parts of town. I live in Hatfield/O'Day/Garden area and it seems to be forgotten. No sidewalks, no safe routes to school despite the neighborhood being 1 mile from two schools, no services, walkability score of 9 out of 100. Woody Street Park is a joke: weeds instead of grass, half-overgrown gravel path, and gravel parking, allegedly because local residents don't want people from other parts of town to use the park. Really? Is this a city park or isn't this a city park? What a contrast between this and Centennial Park where I often take my offspring. Yes, it's a drive, another car on already busy FM 518, but oh boy, slides and swings galore, nice bridge over Mary's Creek, splash park, places to sit down, tennis courts, basketbal courts and places to walk. Why is area north of FM518 and west of Mykawa treated so poorly?
I'm sure my neck of the woods is not alone in needing investment from the city.
I hope the planned development in Spectrum area picks up one day; I would welcome generation of a few jobs that would lighten up the traffic load that SH288 receives. But I would like to see how much money the city has sunk into providing the infrastructure for Spectrum. I second George Fishman's call for investigation.
They have no reason to care about existing residents
In response to the person who lamented about the neglect of the West Mykawa - North FM 518 area: why should they do anything there? Making it "look nice" here will bring no new influx of new residents, because people already live here. All the people in charge care about is keeping up the image that this city is GROWING, and they could care less about the people who have lived here for many years.
I can guarantee you one thing, though: if all of the people who live in this area would sell their 5-10 acre tracts of land to a developer who would turn it into a giant neighborhood, they would waste no time coming to fix up your park.
Wow! As one of the full time producing Realtors at Shadow Creek
Wow! As one of the full time producing Realtors at Shadow Creek Ranch Realty, I am saddened that this project is distressed! What a waste! i've seen the time, energy and creativity that has gone into this process. It is the type of development that would bring folks from all over, thus bringing more money into all of Pearland. This project could fuel beautification for the Eastern concerns. I agree that the East side does need a face lift but sometimes we cant see the forest for the trees. I for one was looking forward to the unique draw this development can do for our economy. It is a big artery that could feed the rest of Pearland if we would get behind it and have some vision! I hope and pray this project is saved!
Wow! As one of the full time producing Realtors at Shadow Creek
Wow! As one of the full time producing Realtors at Shadow Creek Ranch Realty, I am saddened that this project is distressed! What a waste! i've seen the time, energy and creativity that has gone into this process. It is the type of development that would bring folks from all over, thus bringing more money into all of Pearland. This project could fuel beautification for the Eastern concerns. I agree that the East side does need a face lift but sometimes we cant see the forest for the trees. I for one was looking forward to the unique draw this development can do for our economy. It is a big artery that could feed the rest of Pearland if we would get behind it and have some vision! I hope and pray this project is saved!
What a Loss
This would have been a major attraction to the area. We currently only have chain resturants and I was eagerly awaiting some real food, martini bars, jazz bands, cigar bars, etc... to be brought into this area. This is truly a loss... Hopefully it will recover the land is an optimal location
We need something FUN!
This really is a big loss to the area. Although the increased Traffic would not have been welcomed, Waterlights most certainly would have been. Really there is far too much development doing on, Houses, Offices, Stores.... but what is really needed is a recreational facility, something fun, somewhere to take the family for a nice day out, rather than driving for miles and miles to have fun!
I have also noticed this is being kept very quiet, why is it that I didnt know anything about the Waterlights project going in to foreclosure until I "googled" Pearland Waterlights to read about progress..... I hope another investor comes in to save the project.
Extremely sad news!!
I hope some other developer sees a potential in Pearland. This project would have been a great attraction, not just for tourism, but for jobs as well.
Bad news
Well, this was absolutely predictable. The situation will not change itself, its quite uderstandable. The things are not going the way they could go, but the reason is one - ignorance. You want some change - do something. You can make a resume, but you won't be hired right now. You can buy a soap, but you won't be clean immediatly. You can turn to Jesus, but your sins won't repent right away.
Same here.
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