Ahealthyeconomy
Private development in a once-nonprofit area could transform the Texas Medical Center
PARKING lots and grassy patches are interspersed with nondescript office buildings and medical towers along Old Spanish Trail, one of Houston’s main arteries into the gleaming Texas Medical Center.
High-end development has largely eluded this stretch of road despite its proximity to the densely packed 1,300-acre collection of hospitals, universities and research facilities. Land-use covenants allowed the Medical Center to flourish into the world’s largest health care complex, but they also discouraged private enterprises from catering to the 100,000 people who work there and the more than 8 million guests, patients and family members who use it each year.
“Some of those restrictions made it difficult to provide the amenities for a more complete ecosystem,” said John Kajander, a medical consultant with Houston First and former Medical Center executive. “As the city of Houston gets denser, the need to have amenities, grocery stores and places to play becomes very important. Those subregions can become their own complete communities.”
Signs offering real estate for sale suggest change may be coming. Construction cranes herald such projects as a high-rise apartment building and a luxury hotel along with several major medical expansions. Brokers are actively marketing large parcels of land for a revitalization
"...the need to have amenities, grocery stores and places to play becomes very impotant." John kajander, medical consultant with Houston first
that is considered long overdue. They envision top-notch restaurants, residential complexes and new places to shop.
The activity throughout the area reflects not just shifting goals from Medical Center leadership but also a growing recognition of medical care as a vital economic engine.
“The old saying goes, ‘Two things that never slow down are the Port of Houston and the Texas Medical Center,’ ” Cushman & Wakefield executive vice president Jeff Peden said. “That has been true for 100 years now.”
The realty company is marketing a 21-acre former Shell Oil Co. site on Old Spanish Trail.
The Texas Medical Center was chartered in November 1945 as a nonprofit corporation under state law. The agreement restricted the use of land to nonprofits in medical care, teaching and research fields. Strict covenants allow the nonprofits to sell land only to nonprofit organizations and the health institutions, leaving few potential parcels to draw investment.
New leadership, headed by TMC president and CEO Dr. Robert Robbins who took the top job in 2012, is pushing for collaboration and change. One part of his idea is a massive innovation campus, on 30 acres that partially hold a parking lot, that would promote collaboration among member institutions and even draw private development. Also crucial is a change to the covenants that will now allow private investment on the property previously designated only for use by nonprofit organizations.
“My hope is that it would become like Mission Bay in San Francisco, which is ringed with commercial properties, offices for venture capitalists, intellectual property lawyers, investment bankers, regulatory experts, pharmaceutical com- panies, medical device companies, all looking to leverage the strength of this collaboration,” Robbins told the Chronicle in 2013. “There would also be affordable housing and green spaces.”
The Medical Center did not make Robbins available for comment for this story, but a spokeswoman said last week that his position still stands.
The strategy for revitalization and development around the Medical Center also includes improving mobility, in part by increasing shuttles and bike-share offerings, said Abbey Roberson, vice president of planning.
“We see development moving south,” Roberson said. “The OST corridor will become more important moving forward for the entire district as a whole.”
The biggest and boldest initiative by far is the TMC³ Translational Research Campus, one of several projects in the works. The 2-million-square-foot plan would include a conference center and hotel, plus retail and housing, and be anchored by the major health institutions. A helix-shaped greenway would run through the middle. Leaders foresee a new “city center” for the area that will help draw research dollars that currently go to other U.S. cities.
The Medical Center is in the early stages of the project, which includes bringing together some member institutions — the University of Texas Health Science Center, the University of Texas M.D. Anderson Cancer Center, Baylor College of Medicine and Texas A&M Health Science Center — for each to have a building attached to the central helix.
“This will truly be a place that is an open mixed-use type of environment for people in this entire area of town,” Roberson said.
Among the hurdles, the boards of each institution must vote to approve the project and buy in for hundreds of millions of dollars. Also, the land promised for TMC³ is currently a parking lot for thousands of vehicles. What to do with these cars during the construction has not been decided.
If everything comes together, the project could open in 2020.
Peden said as the TMC³ gets closer to completion, more will happen up and down Old Spanish Trail.
“This shift change for the Medical Center, being able to translate research into profit, that is a dramatic change,” he said.
Cushman & Wakefield is also marketing the former Kroger site there. The current owners, who have owned it since 2006 with the intention to sell, hope it will attract multifamily or mixed-use development.
There are other signs of private interest on the few other plots available for development in the area. Medistar Corp. is in the middle of construction on a project that includes 375 luxury apartments and a 350-room, 21-story InterContinental hotel.
Also under construction is a high-rise project by Dinerstein on Holcombe and Cambridge. The Vantage Med Center apartments will open next year with 375 units.
Both developers cited the strength of the Texas Medical Center when announcing these projects. Other high-rises are planned.
The health care industry itself may also provide a boon. In the last decade, employment in the sector has grown by 42 percent in Houston, according to CBRE. In the last 12 months, employment growth outpaced medical building inventory, creating a demand, unlike office sectors in the energy field.
“Health care is the shining star of Houston real estate,” Brandy Bellow Spinks, vice president for health care advisory services at Transwestern, said at a recent industry event. “It’s on the minds of everyone because our sector is thriving. We are somewhat recession-proof. We have not been affected to the same extent as the office market in Houston.”