HOUSTON — Oil and cattle have long been the money makers on the Texas prairie. But sides of beef and barrels of crude can’t match the revenues the Rouse Co. expects to reap with its formula for producing profits from the prairie.
Rouse aims to prove once again that Texas ranches can become gushers of income by making them into master-planned communities.
Rouse is combining two ranches on the far northwestern exurbia Houston to create a 9,000-acre project called Bridgelands.
Well over a billion dollars worth of new construction will rise of the Bridgelands prairie over the next 20 years or so. In short, Bridgelands will generate the kind of revenues that television’s J.R. Ewing never dreamed about for his South Fork Ranch.
When it is finally finished, Bridgelands will be the location of an estimated 20,000 single-family homes, apartment complexes, shopping centers, office buildings, golf courses, schools and houses of worship. About one-tenth of the land, about 1,000 acres will be set aside for commercial development. The first homeowners are expected in early 2006.
Bridgelands, located on the coastal prairie about 25 miles northwest of downtown Houston, seems like an unlikely location for an office complex today. But Rouse executives believe that will change in the future.
“This sounds crazy, but we think in terms of decades,” said Alton Scavo, executive vice president of the Rouse Co.
Although it may be a decade away, Scavo believes office buildings and other places of employment lie in the future of Bridgelands. The growth of an employment base will ensure a steady stream of home buying in the years ahead, Scavo said.
But today the property is a far cry from looking like a business park. The 60-acre Mallard Lake on the Bridgelands site is frequented by abundant fowl and wildlife.
“There’s a lot of hunting that goes out there,” said Alan Hassenflu, president of Fidelis Realty Partners, which recently purchased 1,120 acres adjacent to the Bridgelands.
In addition to the hunter’s prey of ducks and doves, Bridgelands has a plentiful mammal population of raccoons, opossums and rabbits. And there is some wildlife that is not so nice and cuddly.
An unfriendly family of aggressive wild hogs resides along the wooded banks of the site’s Cypress Creek, said Monty Bagwell, who serves as caretaker of the land for Rouse. Bagwell said he stumbled across the band of hogs while walking through the woods recently. They did not attack, but their unfriendly nature was evident as Bagwell slowly retreated.
Bagwell now carries a heavy wooden club and wears thick leather gloves when he enters the hog’s haven.
The Rouse site is the combination of two large ranches that were finally swallowed up by Houstons’ sprawl–the Josey Ranch and the Longenbaugh Ranch. Most of the Rouse holdings there, about 8,000 acres, were purchased last year for about $83 million. Additional parcels were later added to take the Bridgelands site up to 9,000 acres.
The two ranches had been operational for many years, used for agricultural purposes and drilling for oil and gas. At one time, the Josey Ranch alone was more than 15,000 acres.
But many of the large scale ranches from decades ago, get carved up into smaller parcels as heirs divide the assets and sell off acreage that is swallowed into the periphery of Houston’s sprawl.
New communities have been sprouting up in the Houston area like mushrooms, said housing analyst Mike Inselmann of Metrostudy, a Houston-based consulting firm. With almost 40,000 new home sales last year, the Houston market has been stimulating land developers and home builders into a frenzy.
Rouse placed some big bets on Houston real estate last year. In addition to buying the Bridgelands land, Rouse also bought a 52.5 percent stake in The Woodlands, a 27,000-acre community on Houston’s north side.
Rouse, a publicly traded firm based in Columbia, Md., said the Houston’s growth rate has made it hard to ignore.
When making its entrance into Houston last year, Rouse pointed out to shareholders that Houston added 1 million new residents in the 1990s. Although job growth has been off in the last couple of years, the Houston area averaged 60,000 new jobs per year since 1994. And Houston is already the fourth largest city in the nation.
Rouse is no rookie in the development of large scale communities. Rouse already has two of the nation’s biggest community developments notched on its belt — the 22,000-acre Summerlin project in Las Vegas and the 14,000-acre Columbia project in Maryland.
Summerlin, nestled up against the foothills on the edge of fast-growing Las Vegas has been attracting home buyers like sugar attracts flies. It was second in the nation last year with 2,500 home sales in 2003, continuing with a torrid sales pace that few other communities ever reach, according to the Robert Charles Lesser & Co. realty advisory firm.
Rouse’s Summerlin has been successful partly because it maintains strict controls on signage, land use and architectural design, said Summerlin spokeswoman Melissa Warren, as she gave a tour of the massive, but neat and tidy community. Its orderly structure stands in stark contrast to gaudy casinos on the Las Vegas Strip.
“It’s created that little slice of peaceful suburbia away from the 24/7 environment of the Strip,” Warren said. “There is no neon allowed in Summerlin.”
Rouse is hoping to import some of those same standards of quality into the Bridgelands project, Scavo said.
Rouse will create dozens of lakes to complement the natural water features on the property–hence the name Bridgelands.
Bridgeland multiple lakes might be a winning formula, said Houston realty broker Stan Creech, because research shows today’s homeowners love to be adjacent to water even more than being on a golf course.
“What they are doing will set them apart from all of the other master planned communities in Houston,” Creech said. “Water has become the No. 1 amenity.”
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