The JV's mixed-used project is located at Weslayan Road and Richmond Avenue between the Uptown Galleria area and Greenway Plaza office market. TCC's 15.4-acre portion of the project, penciled for a summer 2008 delivery, will feature a 164,000-sf Costco with a 45,000-sf rooftop LA Fitness health club, four-level parking structure, 39,000-sf, two-story retail building and two pad sites. Morgan will build a four-story, 526-unit luxury apartment complex on the remaining 8.8 acres. It will break ground in December, with delivery eyed for one year later.

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

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