The JV's mixed-used project is located at Weslayan Road andRichmond Avenue between the Uptown Galleria area and Greenway Plazaoffice market. TCC's 15.4-acre portion of the project, penciled fora summer 2008 delivery, will feature a 164,000-sf Costco with a45,000-sf rooftop LA Fitness health club, four-level parkingstructure, 39,000-sf, two-story retail building and two pad sites.Morgan will build a four-story, 526-unit luxury apartment complexon the remaining 8.8 acres. It will break ground in December, withdelivery eyed for one year later.

"Neither of us knew what to do with 24 acres, but we both knewwe wanted to be in this location so we decided to go in together ona project," Morgan COO Stan Levy tells GlobeSt.com. The site is theformer headquartersof the Houston Independent School District, which sold theproperty in 2004 to capitalize on the land's substantiallyincreased value. TCC, Morgan and the Newark-based PREI won asealed-bid auction to acquire the site for $38 million. Because theschool district did not want to move until a new headquartersbuilding was ready for occupancy, the deal did not close untilmid-2006.

Craig Cheney, TCC's managing director of retail development,says the high land cost forced the developer to take the unusualstep of going vertical on a big box-anchored center. "Given thescarcity of inner loop sites, this represented a unique opportunityfor Costco and LA Fitness to secure full-size facilities in an areathat is almost impenetrable for users of their size," he says."Increasing the density by stacking them one on top of the otherwas the only way to make a retail center economically feasible,which led us to a very urban development plan."