Montgomery County Home Building Still Strong

The U.S. Commerce Department reported Thursday that construction was started on 1.353 million new homes and apartments last year, down 24.8 percent from 2006. It was the second biggest annual decline on record, exceeded only by a 26 percent plunge in 1980, a period when the Federal Reserve was pushing interest rates to post-World War II records in an effort to combat an entrenched inflation problem.

Many economists believe that the current slump in housing will rival the dive in the late 1970s and early 1980s, when housing construction fell for four straight years before beginning to recover after the severe 1981-82 recession. For December, construction fell by a bigger-than-expected 14.2 percent.

In Conroe, where new home construction can be seen in numerous areas around the city, building permits for 2007 were down 29 percent from 2006. The total permits for 2006 was 854, while 607 permits were issued for 2007, according to data provided by the city's Community Development department.

The lower numbers are in fact part of the seasonal ebb and flow of home construction, according to a city official.

"Homebuilders will tell you there's a downward trend," Guy Andrews, director of community development said. "What impacts that is speculative. It's stronger than in other parts of the country. We've seen a drop in the number of permits since July, but it's cyclical. The housing market is so seasonal.
"I think it's coming back once people figure out we're not the rest of the country. Houston is still the number one economic market in the nation."
The construction ills in the rest of the country haven't spread to Montgomery, where real estate values are holding strong and construction continues without interruption.
"There's no housing glut in the area," said Norm Frank, president of the Montgomery Industrial Development Corporation. "We anticipate a good year ahead."
Hillary Dumas, vice president of LeFco, the developer of Buffalo Springs, agreed.
"Texas won't be impacted the way areas on the coasts will," she said, referring to the faltering housing market. "This area has very little of the sub-prime, lower end housing that is causing surplus inventory and a glut in other markets."
Indeed, Buffalo Springs has no inventory of finished homes available at the moment. Three houses were available a few months ago, but all sold within 60 days. Several firms are active in the community building houses, but all are custom homes for landowners, according to Dumas.
"There has been a lot of speculative building in other areas of the country which contributes to an oversupply," she said. "That is not an issue here."
The drop in construction in December was bigger than economists had been expecting and reflected weakness in all parts of the country. Housing construction fell by 30.8 percent in the Midwest and was down 25.8 percent in the Northeast and 19.6 percent in the West. The decline in the South was a smaller 3.3 percent.
Economists said the weakness showed that the housing correction was getting worse since the turmoil in financial markets hit in August.
"Builders have finally thrown in the towel," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. "This is a precondition for recovery as it will eventually reduce the inventory overhang. But there is a long way to go."
For December, housing starts totaled 1.006 million units at an annual rate. In an ominous sign for the future, applications for building permits fell by 8.1 percent to an annual rate of 1.068 million units. That marked the seventh consecutive monthly decline and reflected the fact that builders have been slashing production plans in an effort to deal with a glut of unsold homes.
Many economists believe the housing sector will remain weak through this year before starting to stage a rebound in 2009.
Brad Meyer can be reached at bmeyer@hcnonline.com.

600,000 SF Retail Center Coming to Conroe

Teas Crossing

Once built, Teas Crossing will encompass 58 acres and more than 600,000 square feet of shopping space at Interstate 45 and FM 3083. One half-million square feet of the retail space will be located at the northwest corner of the intersection, with the remaining 100,000 square feet to be built on a 9-acre site just north of Conroe Marketplace.

While Read King of Houston will oversee construction and leasing of the $82 million project, the Conroe firm of Angel McIver Interests LP - the original landowner - was responsible for establishing the joint venture, said Jeff Read, company co-principle.

"We've had a relationship with them (Angel McIver) for several years," he said. "This is our first joint venture with them. I anticipate we'll be working with them on several projects after this, including a couple in Montgomery County."

Read King developed the Research Plaza shopping center in The Woodlands, but Teas Crossing will be the largest multi-tenant retail development in the company's 15-year history, Read said. With the presence of the Conroe Marketplace, which opened earlier this year, the I-45 and FM 3083 location will feature more than one million square feet of retail space, rivaling the amount of retail square footage in The Woodlands Mall.

"It will become one of the most powerful regional intersections in Montgomery County," Read said. "We're looking forward to working with the Conroe community and developing a quality project that is indicative of the Conroe market."

Although Read King has not submitted its development plans with the city of Conroe or has yet to sign a lease agreement with any retailers, Jeff Read anticipates tenants will start to occupy the center sometime during the first quarter of 2008. He said the company is in negotiations with Dallas-based JC Penney to anchor the development by moving into a 103,500 square foot building.

"We hope to have an agreement very soon," he said.
Read said Angel McIver initially offered his company to participate in the Conroe Marketplace project in 2004. But Read King passed on the joint venture that eventually involved Gulf Coast Commercial of Houston.

Read King got a second chance with Teas Crossing, "and that's when we pounced on it," Read said.

"We had evaluated the market for some time, but we thought there wasn't enough retail demand," he said. "What Gulf Coast did with Conroe Marketplace convinced us Conroe and the areas north, west and east of the city are viable retail areas."
Michael McIver said Read King's decision to pass on the first project did not disqualify the company for getting another opportunity.

"We watched them and liked the way they work," McIver said. "We do not like to make hasty moves. We wanted to get the (Conroe) Marketplace up and we wanted to see the response of retail tenants."

That response, McIver said, has been "considerably better" than anticipated.
"We understand Ross (a Marketplace tenant) broke sales records," he said. "The advent of connecting FM 3083 across I-45 to (Texas) 105 has completely revamped that corridor. That lends itself to a better traffic situation."

McIver said Bleyl and Associates will serve as the project engineer, while Randy Roan Construction has been hired to complete the initial landing clearing.
"We told Read King to use local people for obvious reasons," Iver said. "As fine as the people are in Houston, you've got good, experienced companies in the Conroe area."
In addition to Teas Crossing, McIver said his company will continue to develop the 152 acres it owns between I-45 and North Frazier and south of FM 3083. Plans could include more retail, some medical and some high-end multi-family development, he said.
Conroe City Administrator Jerry McGuire termed the Teas Crossing project as "outstanding" and added that it "validates the growth trend" in Conroe, particularly on the city's north side. Montgomery County Judge Alan B. Sadler said the construction of one million square feet of retail space essentially creates a shift in which "central Conroe" moves to the FM 3083/I-45 intersection.
"I think it's one of the most exciting projects to ever hit Conroe," he said.
Howard Roden can be reached at hroden@hcnonline.com.

More High Paying Jobs for Conroe

Grant Prideco Inc is in the process of consolidating four of its U.S. drill bit manufacturing facilities into a new facility in Conroe, Texas.

Read full story ...

Search for Jobs at Grant Prideco

Conroe Tops 50,000 Residents

The fourth annual Conroe "State of the City Report" in today's Courier outlines the accomplishments of the city in 2007 and the optimistic outlook council members and city employees have for 2008.

It lists the new businesses and opportunities expected to arrive in town this year and gives numbers on the city's budget and tax revenues.
"This report shows that we are a very transparent city and we want every citizen to know where the tax dollars are going," Mayor Tommy Metcalf said. "We're growing at an average of 10 percent a year and, at the same time, we are reducing taxes."
According to the report, 46 new subdivisions were started in the past four years, contributing to the unofficial population of more than 50,000. If the rate of growth continues, by 2010 more than 60,000 people may call Conroe home.

Even though more people moving to the area, crime has dropped the past two years. Robberies decreased by 54 percent, assaults went down 34 percent, larcenies dropped 19 percent and burglaries declined 14 percent, Metcalf states in the report.
As the population grew, so did the city's budget and the quality of life - except, of course, when it comes to traffic, City Administrator Jerry McGuire said.
"Growth often puts a strain on our roadway system, but everyone has to put up with it and the end result is better," McGuire said. "With more outside companies choosing to make Conroe their headquarters, more jobs are created, which brings new families, which means more homes are built and more retail businesses come, giving residents more choices."

During the last two years in the Conroe Industrial Park, more than 120 acres have been sold to companies that have brought 1, 483 additional jobs and made $456 million taxable improvements, according to the Greater Conroe Economic Development Council.

Commercial tax has contributed to the city's growing tax revenue. Between 2005 and 2007, tax revenues increased by $5.6 million. During that time, however, the property tax rate was reduced each year, McGuire said.
"We have every intention, if the revenues continue to increase, to reduce the property taxes for homeowners this year," Metcalf said.
While city officials focus on growth, they are also concentrating efforts on restoring downtown Conroe and making it a center for entertainment.
"I think a viable downtown gives people a sense of community and a gathering place," McGuire said. "We want to celebrate the history of our area."
Upcoming projects that city officials are looking forward to this year include the addition of Teas Crossing, a retail center that will include a J. C. Penney anchor store; the opening of ReedHycalog, which will employ more than 500 employees; and the completion of the renovated Del Lago resort, which is expected to attract thousands of visitors.

The Owen Theater is expected to open in downtown Conroe and will be home to The Crighton Players.

"We're very excited about where Conroe is going and the vision the mayor and council have for the city 20 to 25 years down the road," McGuire said.
For information about future Conroe plans, visit the city's website, www.cityofconroe.org, and check out the comprehensive plan, available under the Community Development section.
Lucretia Fernandez can be reached at lfernandez@hcnonline.com