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800 Car Parking Garage To Go Up on Landmark Tower Site

Downtown Parking Garages New Construction

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#1 John T Roberts

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Posted 01 April 2015 - 03:39 PM

XTO Energy is seeking proposals from developers to build an 800 car parking garage on the site of the old Landmark Tower.  This information was revealed at the Annual Luncheon of Downtown Fort Worth, Inc.  Scott Nishimura of the Business Press has the article below:

 

http://www.fwbusines...15ff3b7e16.html



#2 Austin55

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Posted 01 April 2015 - 03:41 PM

Damnit! That's quite dissapointing...


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#3 JBB

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Posted 01 April 2015 - 03:42 PM

That loud bang you just heard was renamerusk's head exploding. It's a little disappointing that it may go the way of a garage, but I can't be too upset if another surface lot bites the dust.

#4 John T Roberts

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Posted 01 April 2015 - 03:43 PM

The article did say they are open to ideas of more than just a parking garage.



#5 JBB

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Posted 01 April 2015 - 03:52 PM

Yeah, I saw that and that's why I said "may". With what looks like a little development momentum starting to materialize downtown, it's hard not to imagine that someone could make a mixed-use project with a garage work on that space. At the very least, I hope that XTO is open to the idea of true usable ground level space on a garage on that lot.

#6 Austin55

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Posted 01 April 2015 - 04:27 PM

Maybe it's an April fools joke.

#7 renamerusk

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Posted 01 April 2015 - 09:11 PM

XTO Energy is seeking proposals from developers to build an 800 car parking garage on the site of the old Landmark Tower....

 

What is driving the demand for such a large garage? This is quite puzzling. 

 

I hope that any garage will be largely below ground.



#8 John T Roberts

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Posted 01 April 2015 - 09:22 PM

My guess is that the XTO employees are parking all over downtown.  If they built a large garage in this location, then most of their employees would be within two or three blocks of that garage. I think the only exception would be the employees in the old Montgomery Ward/Tindall Storage Building.  They are about 6 blocks away.



#9 JBB

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Posted 01 April 2015 - 09:33 PM

I don't think they have a garage at all at this point, which means that their employees are sprawled out across parking all over downtown. This centralizes some of their employees (not certain, but I believe they have far more than 800 downtown) in a single spot near most of their property. If the employees are paying for their own parking, it would be right in XTO's wheelhouse to move some of them into no-cost parking that they own. (XTO does a lot for their employees. Way more than the average large company.) If they are already subsidizing their employee parking, it might make financial sense to put that expense into a facility under their control.

Edit - The current surface lot has 80 spaces that are pretty spread out (wide aisles). That would put a garage in the 10-12 story range or somewhere there about.

#10 renamerusk

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Posted 01 April 2015 - 09:52 PM

My guess is that the XTO employees are parking all over downtown.  If they built a large garage in this location, then most of their employees would be within two or three blocks of that garage.....

 

 

.... This centralizes some of their employees (not certain, but I believe they have far more than 800 downtown) in a single spot near most of their property. If the employees are paying for their own parking, it would be right in XTO's wheelhouse to move some of them into no-cost parking that they own. (XTO does a lot for their employees. Way more than the average large company.)

 

XTO (Exxon) would then appear to have a very "big" heart.  Is Exxon always this generous?  I would like to believe in my assumption that a for profit corporation would always be seeking to maximize returns on investments.  Isn't it being reported that gas producers are laying off employees and shutting down rigs to reduce losses? Removing a prime site from development to provide free parking for employees seems at odds with economic principles,



#11 Austin55

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Posted 01 April 2015 - 09:59 PM

I'm not positive but I think they own the garage and parking lot that takes up the remaining 1/4 block that the petroleum building sits on. 



#12 JBB

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Posted 01 April 2015 - 10:20 PM

Yeah, I think you're right about them owning that garage, but I think it's pretty small.

I can't speak for the economics of this project and I don't know a lot about how they are positioned to weather the downturn in petroleum prices. That being said, XTO and Exxon existed long before the Barnett Shale play and likely stands to hold out better than the fly-by-night companies that only came into being because of the Barnett Shale play. The shale/gas business survived a prior plummet in prices in 2008. I would assume that Barnett and other gas fields will bounce back when oil and gas prices bounce back (and they will).

As far as XTO being generous to their employees: I have a cousin that works for them and she said little changed after the Exxon buyout. They have a huge family picnic event in the fall that borders on over-the-top, a very nice holiday party, regular catered lunches in the office, golf outings, outings at sporting events, a day at the Stock Show for families, etc. That's just the incentives I remember. I'm sure there are more.

#13 Austin55

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Posted 01 April 2015 - 10:33 PM

Perhaps it would be wise of them to build the garage with enough strength and supports to be able to accommodate future expansion, such as the Wesylan/ A&M Law Building and some others that have been around recently.



#14 renamerusk

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Posted 01 April 2015 - 10:53 PM

Just to give us an idea of what an underground 800-car garage could support even though it was eventually shelved: 

 

http://en.wikipedia....le_Museum_Plaza

 

Is this a teaser? Garage projects like this kind usually come with a major building.

 

I reiterate: This is puzzling, while at the same time, this wets the appetite.



#15 John T Roberts

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Posted 02 April 2015 - 05:44 AM

Austin, they could build a garage with capabilities of adding a building on top; however, most of the downtown buildings that have been built with this design over the years have been demolished before the additions were ever built. The examples I'm thinking about had office use on the portions that were built.



#16 johnfwd

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Posted 02 April 2015 - 12:14 PM

I hope they decide to expand the project beyond a parking garage and, in my view, it makes sense in terms of marketing the site.



#17 RD Milhollin

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Posted 02 April 2015 - 01:04 PM

It might make sense to go ahead and build an office/residential/parking structure since all three elements seem to be in demand in the downtown area. It could also make logistical sense for the company to build something in which a major part of their operations could be combined. It appears from the wording of the article that XTO is looking for a developer who can bring ideas to the project as well as a particular expertise. The ideas could cover any of the ideas forum members have already mentioned in this and other threads covering this property. I believe that XTO also owns the parking lot surrounding three sides of the Waggoner Building, and that in the process of seeking proposals some of the developers might look at how that property could be used for parking/mixed use leaving the old Landmark site for "higher and better uses".



#18 John T Roberts

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Posted 02 April 2015 - 01:24 PM

Good points, RD.  Exploring the idea for a parking garage on the 3/4 block around the W.T. Waggoner Building leaves a parking garage in the same basic design as the one that will be built for Jetta/640 Taylor.  This garage will be "L" shaped, and it doesn't seem like that it could be very efficient. 



#19 cberen1

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Posted 02 April 2015 - 02:14 PM

For reference, does anyone know how many spaces are in the other parking garages downtown?
 



#20 JBB

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Posted 02 April 2015 - 03:05 PM

I looked for that info last night. I couldn't it find it.

#21 Austin55

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Posted 02 April 2015 - 03:13 PM

The garage behind Chase bank is 766, the two connected to the City Center Towers are well over 100 each, the larger is 1,900.

 

Those are the only 3 I could find any on, it'd be interesting to know how many the Omni/CC garage has. 



#22 Jeriat

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Posted 04 April 2015 - 01:58 PM

One suggestion, if they just HAVE to put up a garage on that block...

Build it up, stack it to about 12 levels (however much it would take for 800 spaces), make it take up half the block, make it face 5th street with storefronts on one side with entrances on Houston and Throck, have the other side be a wall with a giant statue or sculpture and waterfall features with more retail space on ground level and then, have the rest of the block be a plaza of some sort. Dress it up to match the architecture of the surrounding buildings and there ya go.

I'll post pics of what I mean later.

If it just HAS to be a garage, on this particular block in downtown, don't make it look like just another garage.

7fwPZnE.png

 

8643298391_d47584a085_b.jpg


#23 PeopleAreStrange

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Posted 04 April 2015 - 02:42 PM

^ If XTO wants to build a garage that only takes up half a block, they should build it on the lot next to the Waggoner building.


- Dylan


#24 Austin55

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Posted 04 April 2015 - 06:54 PM

Could include office and retail!

http://www.star-tele...le17417882.html

If XTO has a lot of space still in 777 and the FWC building I could see them building enough office space to get everyone out of there, and perhaps a bit more if they for see more growth in the future.

It is interesting they want retail as I don't think any of the XTO buildings have any.

#25 John T Roberts

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Posted 04 April 2015 - 07:15 PM

I also didn't know that they did not own the entire block at the time they demolished the Landmark Tower.



#26 Jeriat

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Posted 04 April 2015 - 09:11 PM

Ok... the example of what I was talking about earlier:

Garage1_zps5lvjr3rw.jpg

 

Garage2_zpsckr8vuht.jpg

 

 

(That's Mercury, btw. For some reason, I wanted to use a Greek Myth as an example) 

It won't give you a 360 pano view of the surrounding area, seeing how there's going to be something built on that block. But at least it gives SOMETHING more than just another garage. 

 

I also imagine having it looking alot more elegant, but I just wanted to show you what I had in mind. No time for full on models...


7fwPZnE.png

 

8643298391_d47584a085_b.jpg


#27 renamerusk

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Posted 04 April 2015 - 09:40 PM

Ok... the example of what I was talking about earlier:

Garage1_zps5lvjr3rw.jpg

 

Garage2_zpsckr8vuht.jpg

 

 

 

 

That loud bang you just heard was renamerusk's head exploding.....

 

"You are so right JBB".



#28 Jeriat

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Posted 04 April 2015 - 09:53 PM

 

Ok... the example of what I was talking about earlier:

Garage1_zps5lvjr3rw.jpg

 

Garage2_zpsckr8vuht.jpg

 

 

 

 

That loud bang you just heard was renamerusk's head exploding.....

 

"You are so right JBB".

 

 

Yeah. 

Hate to say it, but it looks like that prime space that currently holds parking is going to be... MORE parking. So it's kinda hard to make it look appealing. Even if you make the most elegant, greatest looking garage in the world, it's still a garage. 


7fwPZnE.png

 

8643298391_d47584a085_b.jpg


#29 renamerusk

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Posted 04 April 2015 - 10:26 PM

 

Point #1 -  Amazing job BBP.  Parking above and below ground...compact footprint....tenants already signed and more to come....gleaming and gorgeous...Check, check, check and check!

 

Point #2 -  I predict that the JOT will be fully leased and spoken for before grand opening day in two years.

 

Point #3  - Thinking and looking at XTO/Waggonner Block to be the next energy holder to surpass what JOT has done.

 

 

We only have to look 150 miles to the north to see what could be in store in Fort Worth.  Like XTO, Devon Energy employee number was 2,000 when it chose to develop Devon Energy Tower - OKC. to consolidate its workers under one roof.

 

http://devonenergycenter.net/

 

So Point#4 - Bennett, Benner + Partners should definitely submit a proposal.  My guess that BBP can convince XTO that they can do better than simply building a garage that would have such a limited purpose.



#30 JBB

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Posted 04 April 2015 - 10:54 PM

Or they'll design exactly what their client is asking for?

#31 renamerusk

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Posted 05 April 2015 - 07:42 AM

.... My guess that BBP can convince XTO that they can do better than simply building a garage that would have such a limited purpose.

 

 

 

Or they'll design exactly what their client is asking for?

 

 

Well this is going to be a thriller with two camps: The Skyscraper Camp (TSC) and The Garage Camp (TGC).

 

It has been exactly 10 years since the opening of this thread and the beginning of our disappointment that the CNB Block (CNBB) would be frozen for immediate development until healthier economics would dictate development.  With natural gas on the ascendancy and the Downtown Market strong, I believe there are both tested economic and substantial accounting factors that favor TSC instead of TGC.  Two recent events, the sell of 777 Main and the announcement to build the Jetta Tower have IMO caused XTO to reevaluate the CNBB and a statement from a XTO spokesperson to say that XTO is open for doing something more than a garage are plenty of tea leaves for me to read that something "Big" is on the horizon.

 

So I am squarely in TSC, even though the tiny window of time to submit proposals to XTO gives reason for me to worry about a big letdown.



#32 johnfwd

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Posted 06 April 2015 - 09:27 AM

The project is still tentative, according to the Star-Telegram article by Susan Baker below.

 

 

http://www.star-tele...le17417882.html

 

Jeriat, is Mercury the god of parking garages?



#33 Jimmy

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Posted 06 April 2015 - 09:48 AM

Please allow me to be the complete dork who points out that Mercury is a Roman god.  I believe you mean Hermes.



#34 John T Roberts

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Posted 06 April 2015 - 10:07 AM

John, it's Sandra Baker at the Fort Worth Star-Telegram.



#35 johnfwd

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Posted 06 April 2015 - 12:20 PM

My faux pas.



#36 rriojas71

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Posted 06 April 2015 - 01:15 PM

That is somewhat disappointing news. That would be the perfect location to build a signature tower and Fort Worth's Tallest. 55 stories would help create a central focal point on the skyline.

Thankfully they are in the early stages of planning and hopefully hey are considering other options and something substantial on the horizon.

#37 Jeriat

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Posted 06 April 2015 - 06:51 PM

The project is still tentative, according to the Star-Telegram article by Susan Baker below.

 

 

http://www.star-tele...le17417882.html

 

Jeriat, is Mercury the god of parking garages?

 

No, but there's a connection to the project, at least...

t2ec1338.jpg

 

And all I know is, Mercury is a god. Just didn't know which culture. 


7fwPZnE.png

 

8643298391_d47584a085_b.jpg


#38 renamerusk

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Posted 06 April 2015 - 10:07 PM

XTO Energy is seeking proposals from developers to build an 800 car parking garage on the site of the old Landmark Tower.....

 

...."Proposals are expected in by the end of April",  Andy Taft, Downtown Fort Worth, Inc. - Fort Worth Business Press, 4/1/15

 

Is 30 days a sufficient amount of time?



#39 johnfwd

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Posted 07 April 2015 - 07:57 AM

An arguable conjecture, if you allow...could XTO Energy be getting a little jealous of Jetta Operating Company--a la high-rise signature building?



#40 JBB

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Posted 07 April 2015 - 09:13 PM

I would like to think that...

1. a multi-billion dollar company like XTO/Exxon has gotten where they are and is weathering the current struggles in their industry because they rise above decisions based on ego, envy, or jealousy.

2. if they really are doing this to get the best of Jetta, they would announce a little more than a 800 space garage with the possibility of something more if a development partner steps up. If this was all about envy, then wouldn't the obvious play be to throw the economic and fiscal responsibility book out the window and propose something that made no sense, like a 70 story tower?

#41 renamerusk

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Posted 07 April 2015 - 10:25 PM

.... then wouldn't the obvious play be to throw the economic and fiscal responsibility book out the window and propose something that made no sense, like a 70 story tower?

 

Someone within the accounting field please help.

 

If for sake of argument,  XTO/Exxon (XE) builds a tower on that lot then that would be the highest return on investment.  Besides the additional tenant rent in the new tower and rent accruing from leasing the vacated spaces in its current properties, there is new efficiency gain by consolidating its workforce, there is a reduction in energy/utility expenses,and there is an attractive rate of depreciation to offset expenses incurred during construction.  Then there is a valuable piece of real estate that can be sold someday in the future. Think equity and housing for example.

 

Instead, XE is being uncommonly altruistic when it shows its concern for the hardship that its workforce must endure because of its need to park all over Downtown and overriding the market behavior of a multi- billion dollar corporation.  If XE believes there is a need to consolidate parking, shouldn't there be a greater and logical need to consolidate its workforce. 

 

I believe the obvious play is to invest in a project that achieves the maximum return. I believe that that is where XE is ultimately headed; and perhaps JOT may have awaken XE.  It appears the trend is to hold your cards close to one;s vest in projects of this nature. From the beginning, the intrigue is what has been puzzling to me. 

 

If a garage is what XE is really planning, then of course, it will be IMO a colossal disappointment; and it would seem to me that XE may be doing what you suggest - "throw.......sense".



#42 JBB

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Posted 07 April 2015 - 10:55 PM

Another question to add to your list: Does XTO's new tower lose value because it also floods the market with class A space in the buildings that they vacate?

#43 renamerusk

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Posted 08 April 2015 - 10:38 AM

Another question to add to your list: Does XTO's new tower lose value because it also floods the market with class A space in the buildings that they vacate?

 

I would guess not.

 

This is beyond my grade, but leveraging skyscrapers which are as a class in smaller supply vs. other types of real estate appears to be quite profitable.  777 Main (Continental Plaza, 1982) has changed ownership three times to my knowledge. It was most recently purchased as part of a larger package for $1.1B.



#44 JBB

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Posted 08 April 2015 - 12:06 PM

Yeah, this is beyond me as well. I wasn't speaking to the profitability vs. non-profitability of a tower built on this site by XTO. I was just saying that, if they were making announcements based on being envious of Jetta, an 800 space garage with the possibility of partnering with a developer seems like a small play.

Just my purely uneducated guess: you can't compare the financial success of a nearly 30 year old building that's changed hands multiple times with the possible financial success of a possible new building. They are 2 different animals. The lack of activity in the way of super-tall buildings in FW should tell you all you need to know: there's too much open space and the money isn't there yet. (This is the part of the script where someone levels the totally baseless accusation of FW wanting to stay "small".)

#45 Dismuke

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Posted 11 April 2015 - 07:52 PM

 


 

Removing a prime site from development to provide free parking for employees seems at odds with economic principles

 

 

 

I don't think that is necessarily the case.

 

In the long run, the biggest asset any business organization has is its talent - especially the talent of individuals in strategically key positions.  Thus the ability to attract and retain talent is key to an organization's long-term success - and to do so, a company has no choice but to remain competitive relative to what other companies offer similar talent.  

 

Employee turnover and the associated costs of recruiting, the learning curve of new employees and the cost of lost investment in new hires who don't work out for one reason or another is extremely expensive.   Unhappy employees and poor morale is also extremely costly to an organization and can even jeopardize the company's competitive viability.   So a company that is focused on the long-term places a high priority on attracting quality employees and keeping them happy.    (Of course, not all companies have the luxury of having such a focus - sometimes it is necessary for a company to sacrifice what would make sense long-term in order to keep the doors open in the short run.  And some companies are simply run by people who have short range, penny wise and pound foolish mentalities).

 

Whether XTO reimburses employees for parking expenses or not, XTO, in the end, is paying for that parking.   If an employee is having to pay parking expenses out of his own pocket in after-tax dollars, for that employee's bottom line that expense plus the taxes that were taken out of his paycheck for him to yield that amount is no different than a lower salary/pay cut.  To remain competitive with other employers that do offer free parking, XTO would either have to offer higher pay or some other type of perk to make up for it.  

 

And if an employee has to spend an additional 20 minutes each day on top of his morning commute searching for a parking space and walking to work - well, over the course of a month and a year that adds up very quickly in terms of time out of the employee's life for other things beyond work.  And work life balance is an huge deal for many employees both in terms of morale and in their choice of employers.

 

Thus a major part of the economics on something like this is the savings that XTO would realize over the long-term in terms of retaining talent and remaining competitive verses other employers as well as the benefits in productivity that comes from employees who are happy and motivated.   Plus, in the very long run, part of the economics is the value that such a parking garage would immediately add to XTO's existing office buildings.   Should XTO ever downsize or leave downtown, those office buildings will be significantly more competitive with nearby parking than they would without.

 

As for other uses of the land such as an office building/apartments/hotel potentially providing a higher return on investment - let's assume for a moment that this is the case.  A company like XTO wouldn't necessarily care about something like that.  There's probably all sorts of things outside of its core competencies that XTO/Exxon could invest capital in that would have a potentially higher rate of return.  But that extra rate of return would come at the expense of the attention and effort that management would have to divert from its core endeavors - and that doesn't always make sense in the long run.  Sometimes it makes better sense to stick to what one knows best than to to be distracted from one's bread and butter business in search of seemingly easier money.  Big companies already have a disadvantage in that it is a huge challenge to prevent them from becoming very clunky and bureaucratic - and a lack of focus only adds to that danger.   It is for this reason that most corporate conglomerates that have been attempted over the years have not been especially successful and frequently end up getting spun off into multiple smaller organizations.

 

Thus, while it is very possible that some other organization might be able to get a higher rate of return from the property, it does not necessarily follow that, in the long run, a company like XTO/Exxon would achieve similar returns when one factors in the risks of venturing beyond their core competencies.  Certainly Exxon is interested in making money.  But it makes its money in energy - so it is much more likely to be far more interested in reducing costs and enhancing efficiencies in its existing operations than the extra pocket change (and it would be pocket change for a company the size of Exxon) that it might pick up from a speculative real estate venture in downtown Fort Worth.


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#46 renamerusk

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Posted 12 April 2015 - 12:43 AM

 


Removing a prime site from development to provide free parking for employees seems at odds with economic principles

 

 

 

I don't think that is necessarily the case.

 

(1) In the long run, the biggest asset any business organization has is its talent - especially the talent of individuals in strategically key positions.  Thus the ability to attract and retain talent is key to an organization's long-term success - and to do so, a company has no choice but to remain competitive relative to what other companies offer similar talent.... work life balance is an huge deal for many employees both in terms of morale and in their choice of employers....

 

(2) As for other uses of the land such as an office building/apartments/hotel potentially providing a higher return on investment - let's assume for a moment that this is the case.  A company like XTO wouldn't necessarily care about something like that.....Sometimes it makes better sense to stick to what one knows best than to to be distracted from one's bread and butter business in search of seemingly easier money.....

 

(3) Certainly Exxon is interested in making money.  But it makes its money in energy - so it is much more likely to be far more interested in reducing costs and enhancing efficiencies in its existing operations than the extra pocket change (and it would be pocket change for a company the size of Exxon) that it might pick up from a speculative real estate venture in downtown Fort Worth.

 

#1 - If Exxon/XTO's (EX) goal is to attract and to retain talent from today's pool of young and tech savvy  workers, then EX will be competing with other large corporation who are finding that these workers are increasingly living in the downtown and near downtown neighborhoods.  The post war II suburb model is quickly fading with the revitalization of the central cores in cities. Providing a parking benefit to workers who drive to work from the suburbs while not providing a similar benefit to workers who use public transit, who might walk or who might cycle to work is not a recipe for harmony between these two groups.  It is unfair; it penalizes workers who are environmentally conscientious; and it can become a source of resentment and harmful to overall morale within the corp between generational workers. 800 workers will have parking; 1200 will not. Again this may present a morale problem.  I find if difficult to see how a new garage will make it convenient for a sizable chunk of EX workforce when so many of its workers will remain scattered across downtown. This sounds more like the "key to the executive bathroom" for some but not for all.

 

#2 - There is no economic reasoning for not seeking a higher return on investment whatever the opportunity.  In capitalism, we are taught that every action can be judged by whether the result produces the best and most efficient use of resources. This can be measured by savings or by production. EX epitomizes more than any other entity the notion of supply and demand and its fundamental success is based upon this principle.

 

#3 - Yes, indeed; EX is interested in making money. Yet money can be made in various ways through diversification, ie real estate, credit, mergers, etc.  Another way to make/save money is to consolidate operations into one location. This is the efficiency that dictates a more robust project to meet both parking and office needs all at once on the CNB/Landmark Block.

 

Now, there is a possible explanation for a garage only project and that explanation may be in the tax code and may be actually what EX is attempting to do in this project.  According to the post below, the provision of free parking can become a taxing dilemma that may do neither employer or  employee any favors.

 

Even still, I am unconvinced that limited tax benefits can trump unlimited potential that would come from a project through leasing/depreciation/reselling; and that these latter economics returns for EX would make more sense in the long term than the returns gain in workforce morale realized by a portion of its total downtown workforce.

 

http://www.shrm.org/...le-benefit.aspx



#47 Dismuke

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Posted 12 April 2015 - 04:02 PM

All quotes below are from renamerusk's immediately previous posting:

 

 

There is no economic reasoning for not seeking a higher return on investment whatever the opportunity.

 

But that's not correct.  Investment opportunities with a higher rate of return usually have correspondingly higher level of risk associated with them.  it is very common for individual investors and companies to choose a course of action that they know will have a lower rate of return because they don't want to expose themselves to the risks associated with another course of action that has potentially higher rates of return. 

 

Oil and gas exploration is an industry that already has a high amount of exposure to risk associated with it.  It wouldn't make sense for oil and gas executives (or executives in any industry) to expose themselves to risk in areas that are too far outside their areas of expertise.  If they are interested in diversification, it could very well be that they would do so in order to lower their risk exposure which would necessarily mean investing in something that is not likely to have as high a level of potential return.

 

 

In capitalism, we are taught that every action can be judged by whether the result produces the best and most efficient use of resources

 

But "resources" include far more than tangible assets.  The single scarcest, most precious and most non-renewable resource on earth is the hours, minutes and seconds that make up an individual human being's life.  For a busy executive, the single most precious resource is the amount of time and attention that is available to focus on the enterprise.  Time and attention focused on one area of concern comes at the expense of the time and attention that is available for focus on some other area of concern.

 

Perhaps Exxon would be able to get a higher rate of return on its capital operating, let's say,  a hedge fund than it does on its energy business.  And Exxon certainly has pockets deep enough to go out and find the very best, most talented hedge fund guru available and put him in charge of it.  The problem is, in the end, the higher ups at Exxon would still be responsible for overseeing the hedge fund guru and for keeping the fund going in the event he does not work out as expected or quits.  My guess is that is something that is way out of the range of expertise of most oil and gas executives.  In the end, such a venture is probably not the best and most urgent use of upper management's time, attention or talents - i.e., not the best use of scarce resources.

 

 

In capitalism, we are taught that every action can be judged by whether the result produces the best and most efficient use of resources

 

It all depends on who is judging and in what context.

 

Let's define what capitalism is.  Capitalism is political freedom in the realm of production and trade.  it is the separation of State and economics in the exact same way and for the exact same reason as the separation of Church and State.  

 

Economics is the social science which studies production and trade.  All social sciences ultimately reduce down to the study of the behavior and interaction of individual human beings.  A company or a corporation is nothing more than a large scale, organized cooperative endeavor comprised of many individuals acting in various roles and capacities.

 

How does one define  "the best and most efficient use of resources"?  That is entirely contextual.  There are all sorts of things that individual human beings spend time and resources on that someone else may not consider to be the best and most efficient use.   I spend money feeding and maintaining three cats.  I spend a lot of time and money on my Internet radio station - I am basically providing a service that its audience gets for free and for which I don't get one dime back in reimbursement.  Is spending my time and money on my cats and Internet radio station "the best and most efficient use" of my resources?    There are some who might argue that it is not - that I could have placed the money I have spent on both over the years into my 401(k) and spent my free time getting paid working some sort of part time job and by now have a nice sum of money to show for it.  But those who would make such a judgment don't have to live my life - I do.  Life is to be enjoyed and the purpose of having money, ultimately, is the freedom it provides for one to pursue one's values.  It would be a different story if I were starving and begging for charity  to survive because I blew all my time and money on projects that I am not able to afford.    But since I can afford it, I consider it to be an excellent use of my resources because of the joy I have received as a result.  But what is "the best and most efficient use" of my resources may not necessarily be the best and most efficient use of your resources.

 

The same can be true for a company because, in the end, it is nothing more than a group of individuals in various roles and capacities acting towards a common objective.  Obviously a major common objective for a business enterprise is a obtaining a return on capital invested. But some companies also pursue certain values which come at the expense of the bottom line financial statement - which is entirely appropriate so long as the shareholders are on board with it.  There are some companies that donate large amounts of time and money to various community and charitable endeavors simply because management considers them to be important and worthy causes.    There are some companies that go so far as to take stands on controversial social issues -  which is something that can be risky and drive away customers.  But they do it because management thinks the issue is important.  Again, as long as the shareholders are on board with it, it is certainly their prerogative.  

 

And, to use XTO as an example, was it "the best and most efficient use of resources" to so thoroughly, lovingly and expensively restore the historic office buildings they occupy?   After all, XTO could have left the nasty facades that were added on in recent decades intact and just used sheet rock and cheapo drop ceilings on the interiors and had essentially the same amount of useful office space.  Instead they spent a lot of extra money for no other reason that the fact that management valued the buildings' history and thought that restoring them would be a cool thing to do.  And the shareholders obviously did not mind - most likely because the company was, when all was said and done, performing very well.

 

By way of contrast, Radio Shack built a beautiful new corporate campus because it obviously thought it would be a cool thing to do.  But Radio Shack's business model was already on shaky ground when the campus was built - so that clearly was NOT the best and most efficient use of Radio Shack's resources.

 

The wider point is this: terms like "best" and "most efficient" are evaluative and highly contextual.  What is deemed "the best and most efficient" in the eyes of the bean counter who is responsible for balancing the company's books might not necessarily be "the best and most efficient:" in the eyes of other significant stakeholders in the enterprise.

 

 

If Exxon/XTO's (EX) goal is to attract and to retain talent from today's pool of young and tech savvy workers, then EX will be competing with other large corporation who are finding that these workers are increasingly living in the downtown and near downtown neighborhoods.

 

My hunch is that most of XTO's workforce is a bit older than what one would find in a tech company where there are a lot of younger workers who fit the stereotype you mention.   Middle aged people tend to live in the suburbs.  Inner city neighborhoods are definitely popular with young workers and single workers.  But the question is, once they marry and have kids and no longer have time and money for things such as nightclubs and restaurants will such neighborhoods continue to have an appeal?  Or will they prefer a back yard and the fact that one can get more space for the money in the suburbs?  In Dallas, many end up moving to the suburbs to escape the DISD.    The nice thing about Fort Worth is it is still possible to buy a decently priced house in a safe neighborhood with what I am told are decent schools and still be close to downtown.

 

Providing a parking benefit to workers who drive to work from the suburbs while not providing a similar benefit to workers who use public transit, who might walk or who might cycle to work is not a recipe for harmony between these two groups.

 

 

 

If employees who walk to work or use transit are filled with rage and envy because the company provides free parking to employees who drive - well, then XTO has issues that are much larger and more serious than parking.

 

Most employers, by the way, provide free parking.  It is only in downtown where this is not the norm.  I used to work for a company in Los Colinas that was on a bus line.  It also had parking lot.   I am not aware of the employees who rode the bus being upset because the company had a parking lot and that people like me who drove to work were able to park in it at no cost.

 

800 workers will have parking; 1200 will not. Again this may present a morale problem.

 

 

Some years ago I interviewed for a job in downtown Dallas (which, I am thankful I did not get as the company subsequently nose dived).  If I recall correctly, they had a limited number of free parking spaces which were assigned on the basis of seniority.  Basically, the only way someone would get one is if someone with greater seniority left the company.  The rest of the employees had a choice between significantly discounted parking nearby or a DART/TRE pass which the company provided for free.   The DART/TRE pass was definitely the better deal if one could make it work.  For me, it wouldn't have worked because there were occasions when I might have had to work without any advance notice past the departure time for the last TRE train to Fort Worth.


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#48 renamerusk

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Posted 12 April 2015 - 10:14 PM

 

 

There is no economic reasoning for not seeking a higher return on investment whatever the opportunity.

 

But that's not correct.  Investment opportunities with a higher rate of return usually have correspondingly higher level of risk associated with them.  it is very common for individual investors and companies to choose a course of action that they know will have a lower rate of return because they don't want to expose themselves to the risks associated with another course of action that has potentially higher rates of return. 

 

Oil and gas exploration is an industry that already has a high amount of exposure to risk associated with it.  It wouldn't make sense for oil and gas executives (or executives in any industry) to expose themselves to risk in areas that are too far outside their areas of expertise.  If they are interested in diversification, it could very well be that they would do so in order to lower their risk exposure which would necessarily mean investing in something that is not likely to have as high a level of potential return.

 

 

...........

 A thoughtful and credit worthy explanation, however it does not undo my puzzlement about EX's single purpose use (a parking garage) upon what is arguably a prominent lot within Downtown. 

 

I suppose it is possible that before coming to its decision, EX will have considered the pros and the cons of each of the factors laid out in Post#44;  but in reality, the outcomes fly in the face of such analysis.  I can say so with reasonable assurance by presenting to the debate the Case of Houston, a energy capital second to none.  What the facts will show is that Houston's energy sector is heavily invested in real estate ostensibly in most cases to consolidate workforce in one location.  Obviously, there is an enormous difference in Houston and Fort Worth or the US for that matter, however, the principle remains the same: "build something that will address multiple needs and have something which is a tangible asset". 

 

If EX was to decide to do a single purpose project only, IMO, it would be swimming against the current established by the decisions of other energy companies and even against its parent company Exxon's decision to consolidate its operations in The Woodlands, Texas. Such a decision would remain a puzzle to me regardless of the humanistic reasons laid out again in Post#44.

 

To demonstrate this point, if you please, I give you Houston -

 

http://www.coydavids...-building-boom/

 

http://bizbeatblog.d...tual-bust.html/

 

http://www.bizjourna...rters-move.html

 

http://www.bizjourna...evelopment.html



#49 cberen1

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Posted 13 April 2015 - 08:32 AM

Wow.  That's quite a debate.  I think we're overanalyzing it a little.  I think it all comes down to this:

 

 - XTO has a parking problem. 

 - XTO also has a space in the middle of their various real estate assets downtown which would make an excellent location for a parking garage.

 - Prior administration felt strongly about the responisble development of DTFW, current administration is busy with other things.

 

The parking garage is just a very practical solution to their current problem.  Whatever money they might make or lose on DTFW real estate in the next ten years is of little consequence to EX (assuming no crazy vanity projects).  They just want to make sure their industrial machine works efficiently.

 

That being said, I imagine that if someone came to them with a really compelling project, they'd listen.  They're not stupid.  They're not afraid of big projects.  They have shown a willingness to be good community partners.  If I was on the board at DTFW Inc., I'd be all over this deal hoping for a better than average outcome.

 

To me the problem is, how to overcome a current shortage of parking, while at the same time adding more office space that will itself require additional parking.  Any solution that doesn't solve EX's current parking shortage just won't work, regardless of the best/highest use of the real estate.



#50 John T Roberts

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Posted 13 April 2015 - 09:29 AM

The previous administration at XTO did explore a 50 story tower on that site to consolidate their office space.  It's also my understanding that they also studied options with multiple buildings on the vacant lots, including demolition of their non-historic properties. 







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