I'm here for one last blog today to talk about this article, which touches on just how important certain real estate can be to the welfare and identity of a city. The article talks about the groundbreaking of a new arena for the Sacramento Kings, the only professional sports franchise in the city.
The history behind the building of the new arena is complicated and dramatic, but an integral part of the reason this new arena is under construction in downtown Sacramento. Before 2013, the Kings were owned by the Maloof family. The Kings have played in the Sleep Train Arena since 1988, but in the late 2000's, the Maloofs began to become very unhappy playing at what they considered to be an aging, ugly liability of an arena. They began to threaten the city that they would move if they didn't get massive amounts of public funding for a new arena immediately. The city council dragged their feet on that demand, to the point that the Maloofs sought permission from the NBA to immediately relocate to Anaheim at the end of the 2010-11 season. Although the NBA denied the petition for relocation, the Maloofs then began the process of selling their stake in the team. The first serious bid to become public was from hedge fund manager Chris Hansen, who intended to move the team to Seattle should he end up buying the team. Seattle was offering a good amount of public funding for a new arena. However, the NBA denied the sale to Hansen, and the team ended up being purchased by a group led by Silicon Valley tycoon Vivek Ranadive, who promised to keep the team in Sacramento, but insisted upon building a new arena in town. In fact, the agreement with the NBA said that they had until the 2017 season to build a new arena, or the NBA would buy the team and immediately move it out of Sacramento, so obsolete is the Sleep Train Arena.
I like to think that at that point, the city of Sacramento realized the lesson they needed to take from what happened to Seattle. The SuperSonics lobbied for public funds for a new arena for years, but never got it. Unsatisfied with their prospects in the city, the SuperSonics were sold to a new group that immediately moved them to Oklahoma City to become the Thunder. Since then, Seattle has been trying to get any NBA franchise they can, luring them with the money they never wanted to give the SuperSonics. Presumably, Sacramento didn't want to become the next Seattle, and thus decided to give $255 million to the Kings for a new arena in order to keep them.
Sports franchises, and especially their arenas, have a huge financially impact on the areas in which they are located. I know that the sports bars and other restaurants around the Quicken Loans arena in Cleveland lost a noticeable amount of business when Lebron James left in 2010. Additionally, Irving, Texas lost a good deal of jobs and several Cowboys-centric businesses folded after the Cowboys left Texas Stadium for the new AT&T Stadium in Arlington. Thus, Sacramento likely didn't want to willingly inflict such losses upon themselves by effectively driving away the Kings.
Additionally, the construction of the new arena will directly add 3,000 jobs to the city. With all of the new retail and food service businesses that will be going in to the plaza around the stadium, many hundreds of other jobs will be created as well, with those jobs being more long-term than the construction jobs. Lastly, the new arena is being touted as the jumping off point of a much larger-scale revitalization of downtown Sacramento, meaning that many many more jobs will be created in the coming years, amongst other economic benefits. It will be interesting to see the new arena, as well as its overall economic impact on Sacramento, in the coming years and even decades.
Sunday, December 7, 2014
Google's New Hangar Office
Today, I'm going to discuss this very interesting article about Google's newest lease for an office in Los Angeles. This article caught my attention for two reasons, the first being the creative possibilities facing Google for how they will use the hangar, and the other being the history of the hangar itself.
Google is well-known for their fun, perk-laden offices. Just this week, we watched a video documenting some of the amazing things available to Google employees at their headquarters in Silicon Valley, as well as some of the highlights from around the world. That video was several years old, and in the years since, Google has opened several new high-profile offices with similar if not even more impressive perks for employees. Now, with a giant aircraft hangar at their disposal, I can only begin to imagine what the creative minds at Google will be able to come up with in the over 300,000 square feet they are leasing.
The second interesting thing about this hangar is its history. It was originally owned by Howard Hughes' Hughes Aircraft company, and was where the company built the Spruce Goose. The Spruce Goose was a large transportation aircraft made almost entirely out of wood. It had the largest wingspan of any aircraft ever, and is one of the largest aircraft ever made. It only ever made one flight, but was unable to get more than 70 feet off the ground, and was largely considered a failure. The Spruce Goose is a legendary example of Howard Hughes' hubris and landed him in hot water with the Senate over the amount of government funding used to build such a failure. One must appreciate the historical connection between the bold innovation of Hughes across all of his companies and Google in the many aspects of their businesses. I look forward to seeing what Google does with the massive blank canvas that is the Hughes Hangar.
Google is well-known for their fun, perk-laden offices. Just this week, we watched a video documenting some of the amazing things available to Google employees at their headquarters in Silicon Valley, as well as some of the highlights from around the world. That video was several years old, and in the years since, Google has opened several new high-profile offices with similar if not even more impressive perks for employees. Now, with a giant aircraft hangar at their disposal, I can only begin to imagine what the creative minds at Google will be able to come up with in the over 300,000 square feet they are leasing.
The second interesting thing about this hangar is its history. It was originally owned by Howard Hughes' Hughes Aircraft company, and was where the company built the Spruce Goose. The Spruce Goose was a large transportation aircraft made almost entirely out of wood. It had the largest wingspan of any aircraft ever, and is one of the largest aircraft ever made. It only ever made one flight, but was unable to get more than 70 feet off the ground, and was largely considered a failure. The Spruce Goose is a legendary example of Howard Hughes' hubris and landed him in hot water with the Senate over the amount of government funding used to build such a failure. One must appreciate the historical connection between the bold innovation of Hughes across all of his companies and Google in the many aspects of their businesses. I look forward to seeing what Google does with the massive blank canvas that is the Hughes Hangar.
Tuesday, December 2, 2014
Skiing in Texas?
Howdy!
I'm here today to discuss a new development that would allow Texans to hit the slopes without ever leaving the state. And I'm not just talking about Mount Aggie. Rather, I'm talking about this, a new proposed indoor ski resort and many other things tentatively set to open in Grand Prairie, Texas in 2018.
I think this project is fascinating, yet also worrisome. Let's get the interesting things out of the way first. Obviously, this is an indoor ski resort, an idea which is in and of itself very very cool. I'm sure there are at least a couple dozen of them around the world, but the only other one I've ever heard of is the one in Dubai, which made quite a few headlines several years ago. Additionally, this resort will diversify its revenue streams by also including retail, a movie theater, and a Hard Rock Hotel. The affiliation with Hard Rock is especially interesting in that it will allow the development to get business from people who want to stay at the hotel without necessarily using the ski slope. This helps to widen the potential audience. Its also interesting that the project has already raised over $200 million, which, while seemingly a large amount of money, only covers half of the projected costs. And that's not taking into account any overruns that are typical of such a complex project. I also think its interesting that Dallas, of all places, was the first place this company chose to build a ski slope in America. I would love to see the feasibility study that made them choose Dallas over more typical resort towns like Orlando, Los Angeles, or San Diego.
In addition to the things that interest me about the project, there are some aspects of it that worry me. For one, I don't know how good it is for the development to be associated with the Hard Rock Hotels brand. Hard Rock Hotels, from what I have read, have generally struggled when they don't also include a casino. Thus, the most successful Hard Rock Hotels have been in Las Vegas, Florida, and Oklahoma. Since Texas doesn't allow gambling, I don't think that's a good sign for the hotel. Additionally, I don't know that Hard Rock Hotels have any particular demand over any other luxury hotel chain, but perhaps it does have its loyal customers. Also, having spent a good deal of time in Dallas, I know that the movie theater market is pretty well saturated. Every mall in the Metroplex has a movie theater, on top of the countless other theaters and specialty theaters that are able to differentiate their products. I don't know that this theater would be able to compete with others well enough to warrant the additional cost to build it. Lastly, I feel like the specialty resort market in Dallas is fairly saturated, especially considering Dallas' status as being a less attractive tourist destination than many other cities in America. With Great Wolf Lodge, the Gaylord Texan, and the Hilton Anatole already well-entrenched in the area, I don't know if a new place such as this will be able to gain enough traction to be truly successful.
Overall, however, I must say that this is a very exciting project, and one I will keep my eye out for news on in the coming years. I very much look forward to being able to go skiing without having to go to the mountains.
I'm here today to discuss a new development that would allow Texans to hit the slopes without ever leaving the state. And I'm not just talking about Mount Aggie. Rather, I'm talking about this, a new proposed indoor ski resort and many other things tentatively set to open in Grand Prairie, Texas in 2018.
I think this project is fascinating, yet also worrisome. Let's get the interesting things out of the way first. Obviously, this is an indoor ski resort, an idea which is in and of itself very very cool. I'm sure there are at least a couple dozen of them around the world, but the only other one I've ever heard of is the one in Dubai, which made quite a few headlines several years ago. Additionally, this resort will diversify its revenue streams by also including retail, a movie theater, and a Hard Rock Hotel. The affiliation with Hard Rock is especially interesting in that it will allow the development to get business from people who want to stay at the hotel without necessarily using the ski slope. This helps to widen the potential audience. Its also interesting that the project has already raised over $200 million, which, while seemingly a large amount of money, only covers half of the projected costs. And that's not taking into account any overruns that are typical of such a complex project. I also think its interesting that Dallas, of all places, was the first place this company chose to build a ski slope in America. I would love to see the feasibility study that made them choose Dallas over more typical resort towns like Orlando, Los Angeles, or San Diego.
In addition to the things that interest me about the project, there are some aspects of it that worry me. For one, I don't know how good it is for the development to be associated with the Hard Rock Hotels brand. Hard Rock Hotels, from what I have read, have generally struggled when they don't also include a casino. Thus, the most successful Hard Rock Hotels have been in Las Vegas, Florida, and Oklahoma. Since Texas doesn't allow gambling, I don't think that's a good sign for the hotel. Additionally, I don't know that Hard Rock Hotels have any particular demand over any other luxury hotel chain, but perhaps it does have its loyal customers. Also, having spent a good deal of time in Dallas, I know that the movie theater market is pretty well saturated. Every mall in the Metroplex has a movie theater, on top of the countless other theaters and specialty theaters that are able to differentiate their products. I don't know that this theater would be able to compete with others well enough to warrant the additional cost to build it. Lastly, I feel like the specialty resort market in Dallas is fairly saturated, especially considering Dallas' status as being a less attractive tourist destination than many other cities in America. With Great Wolf Lodge, the Gaylord Texan, and the Hilton Anatole already well-entrenched in the area, I don't know if a new place such as this will be able to gain enough traction to be truly successful.
Overall, however, I must say that this is a very exciting project, and one I will keep my eye out for news on in the coming years. I very much look forward to being able to go skiing without having to go to the mountains.
Monday, December 1, 2014
The High Line's Final Act
Today's topic is the recent opening of the third and final section of the famed High Line Park in West Manhattan. The High Line is an elevated park on the west side of Lower Manhattan that has been created from an old freight rail line. The High Line has been under construction since 2006, and the final section finally opened in September of this year.
I chose this topic for several reasons. Firstly, its the first architectural project I can remember peaking my interest without being the biggest of some variable. I've always been intrigued by the project. Secondly, its the development that sparked my love for urban refurbishment/renewal developments, so it only seems fitting to return to it for this assignment. I really am quite fascinated by the High Line. One of my favorite aspects of the development is the use of the old rail line and rail ties to create new features. In some places, the rails have been left exposed as an homage to the origins of the park. In others, the rails have been turned into playgrounds for children. Along the length of the park, rail ties have been used to create benches, picnic tables, and seesaws. I really appreciate designers who go out of their way to give credit to a project's history in their designs for a development.
One of the most interesting facts about the High Line that the final segment cost $35 million, despite only being a few dozen feet wide and less than half a mile long. The other phases each cost even more money for a similar size, making the High Line the most expensive park per acre ever. Although this seems like an extravagant amount of money for a city government to be spending, especially back during the worst of the recession, the park has been primarily funded and exclusively maintained by private donations. I praised the concept of public-private development ventures back in my post about the Cowboys new headquarters, and I was surprised to find such an agreement here. I've never heard of a public-private venture being used on a development that would normally be in the realm of the government. Usually they go the other way around. And I was especially surprised to see such a massive influx of private dollars on a park, which is usually one of the first things people demand spending cuts on in times of trouble.
Also, I find it very interesting the High Line is just the beginning of a much larger, much more expensive redevelopment project, that of the Hudson Yards Redevelopment Project. In the coming years, what was formerly a rail yard will become home to 16 new skyscrapers, in one of the most expensive developments in American history. Although I've never been to New York, I am amazed by the scale and speed of the changes happening on the Far West side of Manhattan.
I chose this topic for several reasons. Firstly, its the first architectural project I can remember peaking my interest without being the biggest of some variable. I've always been intrigued by the project. Secondly, its the development that sparked my love for urban refurbishment/renewal developments, so it only seems fitting to return to it for this assignment. I really am quite fascinated by the High Line. One of my favorite aspects of the development is the use of the old rail line and rail ties to create new features. In some places, the rails have been left exposed as an homage to the origins of the park. In others, the rails have been turned into playgrounds for children. Along the length of the park, rail ties have been used to create benches, picnic tables, and seesaws. I really appreciate designers who go out of their way to give credit to a project's history in their designs for a development.
One of the most interesting facts about the High Line that the final segment cost $35 million, despite only being a few dozen feet wide and less than half a mile long. The other phases each cost even more money for a similar size, making the High Line the most expensive park per acre ever. Although this seems like an extravagant amount of money for a city government to be spending, especially back during the worst of the recession, the park has been primarily funded and exclusively maintained by private donations. I praised the concept of public-private development ventures back in my post about the Cowboys new headquarters, and I was surprised to find such an agreement here. I've never heard of a public-private venture being used on a development that would normally be in the realm of the government. Usually they go the other way around. And I was especially surprised to see such a massive influx of private dollars on a park, which is usually one of the first things people demand spending cuts on in times of trouble.
Also, I find it very interesting the High Line is just the beginning of a much larger, much more expensive redevelopment project, that of the Hudson Yards Redevelopment Project. In the coming years, what was formerly a rail yard will become home to 16 new skyscrapers, in one of the most expensive developments in American history. Although I've never been to New York, I am amazed by the scale and speed of the changes happening on the Far West side of Manhattan.
Denton Fracking Ban
Today I will be discussing this article, about the recently passed fracking ban in Denton, Texas. Although it isn't directly a real estate issue, it has an interesting side effect pertaining to real estate.
Denton is a town of about 120,000 people that sits 40 miles north of Dallas along I-35 and is the home of the University of North Texas. Before this new law, they had already banned new wells from being drilled within 1200 feet of houses in the city. This new ordinance, however, places an outright ban on all fracking activity within the city. The ban was passed with 59% of the vote, which came in response to environmental and safety concerns over the air and water effects of the drilling, as well as concerns about the waste disposal protocols used in the industry.
One of the interesting effects of this ban is that which it has upon real estate values. The article brings up the fact that the ban prevents mineral interest owners the right to gain value from their property, but the real estate effects goes beyond that, even. If somebody had been looking to sell their mineral rights to a drilling company, that deal is moot now, as there is almost no value in selling mineral rights within Denton city limits. Additionally, this devalues fee simple estates as well, as mineral rights can be taken into account when selling fee simple property. Overall, this has the effect of devaluing desirable property in Denton, and even making desirable property undesirable.
However, it must be stated that the future of drilling in Denton is still in question after this ban, and that's without taking into account the mounting legal challenges against it. For one, this ban only affects hydraulic fracturing, but not any other form of drilling. One of the authors of the ordinance was quoted as saying that drillers could revert to conventional drilling to get to the oil. However, it is my understanding that hydraulic fracturing is the only viable method of retrieving oil and natural gas from shale deposits, such as the Barnett Shale atop which Denton sits. So, I'm not entirely certain that is a true statement. That being said, it is also my understand that fracturing can be done several miles horizontally. Thus, in theory, new wells could be drilled outside city limits and then drilled horizontally into the city in order to get to deposits. I'm not entirely certain that's a possibility, but I would love to find out. I'm very interested in learning more about the mechanics of fracking and the future of the Denton fracking ban as it faces many legal challenges.
Denton is a town of about 120,000 people that sits 40 miles north of Dallas along I-35 and is the home of the University of North Texas. Before this new law, they had already banned new wells from being drilled within 1200 feet of houses in the city. This new ordinance, however, places an outright ban on all fracking activity within the city. The ban was passed with 59% of the vote, which came in response to environmental and safety concerns over the air and water effects of the drilling, as well as concerns about the waste disposal protocols used in the industry.
One of the interesting effects of this ban is that which it has upon real estate values. The article brings up the fact that the ban prevents mineral interest owners the right to gain value from their property, but the real estate effects goes beyond that, even. If somebody had been looking to sell their mineral rights to a drilling company, that deal is moot now, as there is almost no value in selling mineral rights within Denton city limits. Additionally, this devalues fee simple estates as well, as mineral rights can be taken into account when selling fee simple property. Overall, this has the effect of devaluing desirable property in Denton, and even making desirable property undesirable.
However, it must be stated that the future of drilling in Denton is still in question after this ban, and that's without taking into account the mounting legal challenges against it. For one, this ban only affects hydraulic fracturing, but not any other form of drilling. One of the authors of the ordinance was quoted as saying that drillers could revert to conventional drilling to get to the oil. However, it is my understanding that hydraulic fracturing is the only viable method of retrieving oil and natural gas from shale deposits, such as the Barnett Shale atop which Denton sits. So, I'm not entirely certain that is a true statement. That being said, it is also my understand that fracturing can be done several miles horizontally. Thus, in theory, new wells could be drilled outside city limits and then drilled horizontally into the city in order to get to deposits. I'm not entirely certain that's a possibility, but I would love to find out. I'm very interested in learning more about the mechanics of fracking and the future of the Denton fracking ban as it faces many legal challenges.
Subscribe to:
Posts (Atom)