Following on this earlier post, the Chronicle’s Nancy Sarnoff reports on the expected announcement today by Houston Pavilions LP that House of Blues Entertainment Inc. will be its first anchor tenant in the $200 million, 700,000 square foot downtown project that hopes to transform three city blocks into an open-air shopping-and-entertainment mall with offices and condominiums. The House of Blues facility is expected to feature a performance hall, restaurant and retail shop covering about 43,000 square feet of the project, which also includes plans for a 134,000-square-foot condominium tower and 200,000 square feet of loft-office space.
The Houston Pavilions is located between the newly revitalized Main Street on one side and the George R. Brown Convention Center on the other near the downtown Foley’s and The Shops at Houston Center shopping mall, so it would appear that developers Geoffrey Jones and William Denton are banking on creating something of a retail district in the area (Mr. Denton developed a similar project in Denver that opened in 1998). To induce the private investment in the project, the City of Houston and Harris County have provided over $13 million in development grants and local officials redrew the boundaries of a tax increment reinvestment zone to include the project.
As is typical of such deals, the project is not without risks. For over a generation now, Houston’s retail and entertainment areas have gravitated away from the downtown area, perhaps best reflected by the Galleria area about seven miles west of downtown. The developers are also counting on notoriously air-conditioning-conditioned Houstonians to choose an outdoor urban experience rather than the indoor suburban outing that has become the norm over the past several decades. Nevertheless, the recent success of similar (albeit smaller) projects in the Houston area is probably making the developers and prospective tenants more bullish on the project.