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Houston eyesore becomes a landmark

By Candace Talmadge

HOUSTON -- During the late 1980s and first half of this decade, real estate agents in southwest Houston carefully avoided taking prospective homebuyers anywhere near Meyerland Plaza.

"Now, it's the first thing the agents show them," Edmund D. Wulfe, CSM, said proudly. He is president of Wulfe & Co., the Houston-based brokerage, development and property management firm that co-owns and manages Meyerland Plaza.

The neighborhood shopping center was built in 1957 on a 59-acre parcel by W.S. Bellows Construction Co., and opened in 1958. But the property's future was put into jeopardy when, in 1984, William Adkinson, president of Meyerland Co., purchased and divided it into several tracts. Meyerland Co. filed for bankruptcy in 1987, and Mr. Adkinson later was convicted on federal bank fraud charges. Federal officials say Mr. Adkinson had tried to use Meyerland Plaza in schemes to defraud several savings and loans.

By this time, Meyerland had hit a low point. It was perhaps 35% leased, down to just 15 retail tenants. The plaza's open-air interior courtyard was in poor condition and the signage was inadequate. By this time too, the whole open-air concept was outdated, with shoppers seeking protection from Houston's hot, steamy climate in enclosed, air-conditioned malls.

These factors, combined with the Houston real estate bust of the 1980s, took a heavy toll on Meyerland Plaza.

Continental Savings Association and Lamar Savings assumed control of the center, and the S&Ls hired Ray Bailey Architects Inc. of Houston to complete a series of design studies on the property.

"We realized a new coat of paint and new landscaping weren't going to work," recalled Ray Bailey, FAIA, president of Ray Bailey Architects. On the contrary, Meyerland Plaza required the architectural equivalent of open-heart surgery. "The patient was dying and needed a transplant," Mr. Bailey said.

It would be another six years and several more owners before that would happen, however. Continental Savings and Lamar Savings failed in 1988, and Meyerland Plaza passed to Southwest Savings, which in turn failed later that year. The center then became a ward of the Resolution Trust Corporation (RTC).

In 1990, RTC began seeking bids to redevelop Meyerland Plaza. This is where Mr. Wulfe, a longtime Houston commercial broker, first became involved, when he was brought in as a consultant for one of the initial redevelopment bidders, Friendswood Development Co. Mr. Wulfe had lived in the Meyerland Plaza area for many years, and knew the center's enduring local reputation within the community.

Meyerland Plaza was "an icon" that had simply become a victim of the financial failures of four owners and the federal bureaucracy, he said.

"The neighborhood looked at Meyerland Plaza as a town center," Mr. Bailey said, and during its heyday it was considered one of the nation's hottest regional retail properties. Meyerland Plaza was the forerunner of the mall concept, he added.

When RTC offered the property for sale in 1991, Mr. Wulfe was determined to be the buyer. First, he had to find financial backing, which ultimately was provided by an endowment fund affiliate of Harvard University. Second, Mr. Wulfe faced a tangle of extremely complex legal issues along with a delicate tenant relations situation.

Due to the string of owner bankruptcies and the subdivision of the land into several parcels, the title to the center was enmeshed in a web of liens and conflicting claims. Moreover, several longtime tenants with extended leases had control over how the center could be redeveloped. And, Mr. Bailey, the architect, pointed out, not all of these tenants were rushing to embrace change.

Mr. Wulfe spent two years, between 1991 and 1993, sorting through the mess. During this period, Wulfe & Co. conducted a market survey, sending out 1,100 questionnaires to residents within Meyerland Plaza's five-mile-radius trade area. Instead of the usual 5% survey response rate, the firm received close to a 28% response rate.

"That told us that people in the area knew about Meyerland Plaza," Mr. Wulfe said, adding that it also showed they were enthusiastic about the prospect of its redevelopment.

The fundamentals were all there. Meyerland Plaza was located in an established, heavily populated residential area that was undergoing a renaissance. Older, smaller houses were being torn down and replaced by larger homes. And while the average annual household income in Houston is $58,000, it is $68,000 in Meyerland's trade area, according to Mr. Wulfe.

Meyerland Plaza also was in an excellent, highly visible location. It was on the southwest corner of West Loop 610 and Beechnut Street, a major Houston thoroughfare. It had easy off-and-on highway access, and its trade area was significantly underserved by retail.

Armed with all this data, Mr. Wulfe helped convince some of the remaining anchor tenants, such as Houston-based retailer Palais Royal, to buy into the redevelopment project. He finally closed a deal with RTC in the summer of 1993, when he and his partners paid $16 million for the property. Originally RTC had asked for $18 million.

Redevelopment and construction began in 1994. The redesigned main building opened in 1995, and construction of the last pad is scheduled to be completed this year.

The original, doughnut-shaped design has been turned inside out, with all store entrances now facing outward; the former interior courtyard no longer exists.

"This was not a timid design approach," Mr. Bailey explained. "It was a radical departure from the former appearance."

The new Meyerland Plaza has what Mr. Wulfe called a "federal" design that fosters an image of stability and permanence. It also looks very different from the colonial brick that marks most of the retail centers in Houston, Mr. Bailey said.

Not everything has changed, though. The old Meyerland Plaza sign -- a neighborhood landmark -- was recreated and set atop the new cinema complex, and some material from the old plaza found its way into the new construction to lend a sense of continuity.

Leasable space increased from 650,000 square feet to 910,000 square feet. Today, the 59-acre site has a new strip shopping center, a new, larger General Cinema theater and several additional retail pad clusters. Parking areas were repaved and trimmed from 5,000 to 4,092 spaces.

Tenant mix is always a key to any shopping center's success, Mr. Wulfe noted, explaining that Meyerland Plaza is best suited to a mix of power retailers -- Bed, Bath & Beyond, Border's Books, Marshall's, Office Max, Service Merchandise, Steinmart -- along with longtime anchors such as Palais Royal and JC Penney, restaurants and smaller tenants. These include Bridesmart, Hallmark and Lane Bryant.

The big-box tenants face toward the freeway, and Mr. Bailey said the new signage is large for better visibility to drivers. The center is 98% leased.

Annual sales per square foot have nearly quadrupled, from about $50 per square foot before redevelopment to approximately $180 today, Mr. Bailey said.

Chains claim that their stores in Meyerland Plaza are among the best performers in the Houston area, Mr. Wulfe said.

Ironically, although Meyerland Plaza once lost out to the enclosed malls of the late 1970s and 1980s, Mr. Wulfe said its new design is more appropriate than malls for the time-pressed shoppers of this decade. Consumers no longer have hours of leisure time to spend hunting for stores that are tucked away inside large malls, he argued.

Instead, shoppers can see immediately where all retailers are located in the plaza. They can drive right up to the storefront, park, enter and shop. Mr. Bailey visited the plaza recently and, although it was a rainy weekday afternoon, the stores were crowded and the parking lot at least half full, he said.

The new Meyerland Plaza also has served as a catalyst for additional commercial and residential property redevelopment in the neighborhood, Mr. Wulfe added. Where once it was given a wide berth by realtors who felt the center was dragging the area down, it now is pulling the neighborhood up.