PD-15 Update: Preston Place Back On Market While Provident Signs Royal Orleans

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It seems the years-long process for changing PD-15 didn’t end at City Hall, as expected.

And the residents of Preston Place won’t have a buy-out check under the Christmas tree, at least not from Provident. Preston Place, which burned down to the parking lot garage,  is the main reason the whole painful PD process occurred. It even brought former Mayor Laura Miller out of her swank Preston Hollow estate to run for city council against incumbent Jennifer Staubach Gates.

But now Preston Place is heading into 2020 still unsettled, while Royal Orleans has a deal. So as much as I want this story to be over, put to bed and tucked in (to all a good night!), it ain’t.

Weeks ago, we learned that Provident Realty Advisors’ contract was terminated to redevelop the burned-out Preston Place property. There are several rumors out there as to what happened.

  1. The first paints Provident as wanting to negotiate their contract for a lower price, Preston Place saying firmly “no,” and booting the developer.
  2. The second says that Preston Place re-appraised and re-valued their parcel and found values had increased. As a result, they were looking to boot Provident to seek more money perhaps from a new developer.
  3. A third says Provident wanted a six-month extension, and Preston Place refused.

My guess is that the reality is likely a mixture of all three rumors.  Either way, Provident is out, for now. When Preston Place goes back on the market, one assumes they could put it under contract again.

Anyway, after trying their hand with a local commercial broker, Preston Place is now seeking a national representative to begin marketing the parcel in January. As of press time, HOA president Arnold Spencer said they hadn’t made a selection on that representative just yet.

Burned-out Preston Place

During this process, I’d said there was a better than 50-50 likelihood that Provident would walk away. They simply hadn’t put the time and energy into the project that A.G. Spanos had with the neighboring Diplomat. While Spanos was at nearly every meeting, Provident rarely made an appearance, and when they did, their proposals were each wildly different and typically larger than their last.

I’d also had experience with them from the Oak Lawn Committee where their proposals had precipitous changes from meeting to meeting. The analogy I used was pretty typical of most sharp developers: Spanos was like the kid who asked for a dollar when all they really needed was 90 cents; Provident asked for a dollar when 50-cents was needed.

Together with all this, Preston Place had the property reassessed, which returned a higher valuation and so they’ve raised their asking price. I’ve spoken with one developer interested in the parcel but was told that their offer would be less than Provident’s rumored contract value.

In these situations, I always find it interesting that when something doesn’t sell for X dollars, the best course is to raise the price. But from what I’m hearing about the price offered to Royal Orleans (keep reading), there just might be a chunk of change left on the table – or not.

I also find it interesting that throughout this three-year process, the overriding justification from Preston Place was resident hardship – paying two mortgages, residents dying, and residents couch-surfing – all with the over-arching message of wanting to do right by the neighborhood. When City Council approved the final zoning change, Preston Place residents who spoke to me afterwards were happy they could “move on.”

But apparently only for the highest price.

But before you wag your finger at them and accuse them of being greedy, remember, you’d likely do the same thing. We all would. If there is money left on the table, sellers want it. My first house was under contract for less than I wanted. A second offer came in for a higher amount. I did everything I could to get the first deal tossed so I could take the higher offer. So I get it.

But there is a clear dissonance with Preston Place’s public pity party.

Royal Orleans + Provident

One of the other three parcels “in play” during the PD-15 authorized hearing was Royal Orleans. It occupies a scant acre on Northwest Highway adjacent to the western side of the Athena. During the PD-15 process, Provident had some informal understanding with Royal Orleans whereby Provident’s proposals called for building on both Royal Orleans and Preston Place plots.

We can confirm from multiple sources, including Royal Orleans representative Ken Newberry, that while out of Preston Place, Provident has inked a deal to move forward with a project on the Royal Orleans lot.

The rumor mill is saying their design is for a 16-17 story pencil building on the small lot. Attempts to reach Provident representatives have gone unanswered.

A project like that would raise questions. The rewritten PD-15 ordinance seemed pretty tight on only allowing a single high-rise on Northwest Highway. A separate project on Royal Orleans would open the potential for a second on the southern side of Preston Place. We’ll have to wait and see how permitting and zoning weigh in on the feasibility if a high-rise is accurate information.

The second issue I’ve raised before is parking. The higher the building, the more units, the more parking, the deeper you have to dig to bury them, the higher the cost.

I also wonder about the city’s 70-foot setback which flies in the face of the contract spelling out the 100-foot setback and agreed to by the properties in the 1960s. It seems a pretty open-shut case to me.

Again, with no firm idea on the project, I’m flying blind.

Summary

So yeah, it seems the years-long process for changing PD-15 didn’t end at City Council as expected. No settlement for Preston Place, even three Christmases later.

It makes me wonder what the future holds for the Diplomat project and the thus far silent Diamond Head Condos.

I guess the PD-15 saga will spill over into the next decade. Maybe by 2929…


Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. In 2016, 2017 and 2018, the National Association of Real Estate Editors recognized my writing with three Bronze (2016, 2017, 2018) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.

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Jon Anderson

Jon Anderson is CandysDirt.com's condo/HOA and developer columnist, but also covers second home trends on SecondShelters.com. An award-winning columnist, Jon has earned silver and bronze awards for his columns from the National Association of Real Estate Editors in both 2016, 2017 and 2018. When he isn't in Hawaii, Jon enjoys life in the sky in Dallas.

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Comments

  1. Bill Kritzer says

    I will not only wag just my middle finger, I will wag my entire hand at the Preston Preston Place Condominium Association for their total disrespect for the previous homeowners in the name of pure GREED. After sitting through 2 City Plan Commission meetings and the September 11, 2019 City Council meeting and listening to all the sympathy stories about hardships, unpaid mortgages, having no place to call home, and losing everything that they owned, their Association should be ashamed. Why not interview these people that spoke at these meetings and do a real “human interest story” . Oops, my mistake, your “beat” is about high-rises, HOA’s and renovations and not the reality of people living there. Maybe Candy needs to add a real journalist with compassion that actually lives in PD -15 who sincerely cares about the homeowners of Preston Place and the community.

    • Dr. Timothy B. Jones says

      I think your insights are a little unfair Mr. Kritzer. First, the PP HOA made the horrible mistake of trusting an incompetent management company about many things, most of all maintaining inadequate insurance coverage. At this point, you cannot fault them from wanting to recover for their members what will still be grossly inadequate given what that have been through, both financially and emotionally. The own some VERY valuable land and I don’t begrudge them from wanting to recover whatever they can from this horrible loss. Your unfair judging only makes it worse. Try losing your home to grossly insufficient insurance.

      As for Jon and Candy……well you have missed the mark there too. You don’t have to always agree with them but it’s unfair to question their motives. They have a keen interest and many insights on Urban real estate that I appreciate and enjoy…..even when I occasionally disagree. Happy 2020 to both of you!

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