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Movin’ on up - Grand Parkway is bringing development to the northeast side of Houston

May 17, 2024

To someone driving down U.S. Highway 90 into Dayton in Liberty County, it may not be apparent what many residents of the roughly 10,000-resident town have known for a while: Change is coming to the area.

While most of the land along the highway outside the city is lined with pastures and cows, some of that change is already showing with something as simple as the city’s first Starbucks, which opened last summer.

“This is a small town, so … if you get excited because you see a Starbucks in town, that says a lot for us,” said Dayton City Manager Kimberly Judge.And not just Starbucks — a Whataburger also recently opened, and a Popeye's is under construction. The locals call it "fast-food row."

"(The fact) that they are here tells us we are growing," Judge said. "Once the population reaches a certain number, that's when you start seeing more restaurants and retailers coming.”Whatever that certain number may be, there is no doubt the area will reach it soon.

Since the Texas Department of Transportation opened sections H and I-1 of the Grand Parkway, from Interstate 69 in New Caney to Interstate 10 in Baytown, in spring 2022, developers have been flocking to Houston’s northeast side and Liberty County.

“When the Grand Parkway opened up, access to the area became much, much easier,” said Paul Connor with Liberty Development Partners, which is developing Gulf Inland Logistics Park just south of Dayton. “So, we’re seeing a lot of traffic over here and people that are interested in this area of (Greater Houston) that traditionally have not been.”

New master-planned communities

While development is in the early stages, a few projects underway along the eastern section of the Grand Parkway bear witness to what’s to come.

It includes one of the largest master-planned communities under development in Greater Houston: River Ranch just south of Dayton.

Plans for the 7,000-acre community were first announced in 2016, when a partnership between developers Ed Gray of Baytown's Gray Enterprises, Bill Sjolander and landowners the Angel brothers from Baytown’s Angel Brothers Construction presented it to Dayton City Council, per reporting by the Houston Chronicle at the time.

The community’s first home was completed in January 2023, said Connor, who is part of an investment group that is involved in the development.

By now, River Ranch has around 200 homes and will have 2,100 homesites within the next three years, he said.

At full build-out, the community in Dayton’s extra-territorial jurisdiction could have about 14,000 homes. Assuming the Texas average of just under three people per household, River Ranch alone would then bring about 40,000 new residents to the area.

Add that to 5,000 lots currently platted within Dayton city limits, which are expected to bring another 14,000 residents, more than doubling its current population over the next five years.A similarly impactful development is underway 15 miles south on state Highway 146 in Mont Belvieu, where the 1,400-acre master-planned community Riceland is expected to eventually double or triple the 9,000-resident town. Riceland developer McGrath Real Estate Partners is also rebuilding the small refinery town’s city center to bring back Mont Belvieu’s historic downtown.

The town was moved 2 miles to the east in the late 1980s because it was threatened by a salt dome after a plant explosion and therefore lost some of its original buildings. That part of town is now heavy industry, with refineries lining Highway 146 between the Grand Parkway and I-10.

Industry and jobs

With the Grand Parkway, more industry is coming to the area, and with it, more jobs.

“We see the Baytown-Mont Belvieu growth on the industrial side continuing to push its way north up into Dayton now that the transportation infrastructure has been further improved by the Grand Parkway,” said Marcus Goering, principal at Liberty Development Partners.

The Gulf Inland Logistics Park, between Highway 146 and the Grand Parkway, has been in the planning for over a decade. After acquiring the first 1,500 acres in 2008, CMC Industries announced plans for the rail-served industrial park in 2012.

Liberty Development Partners, a joint venture between Houston-based Connor Investment Real Estate and Dayton-based Logistics & Development Resources, purchased the park in 2022.

Goering was involved in the project from the beginning, even before the path of the Grand Parkway, let alone a timeline for its construction, was known.

“It was logical that the growth was going to come this way,” he said. “Everything to the west and the north and the south (of Houston) is covered up, and the undeveloped wedge is kind of this, call it (U.S. Highway) 59 to I-10 quadrant.”

Liberty has sold 66 acres to two users in Gulf Inland Logistics Park in the past year and has another 80 acres under contract. In addition, the plan is to expand the park by another 2,400 acres to the south.

Liberty is currently in discussion with eight companies that could end up bringing nearly 10,000 jobs to the industrial park, Goering said.

With job growth comes increased demand for housing, which is where the area’s new master-planned communities come in.

32,000 future lots

Some of the larger active residential communities east of Lake Houston include Friendswood Development Co.’s Newport in Crosby and Baytown Crossings at Barbers Hill and Garth roads in east Harris County. Further north, there is The Signorelli Co.’s acreage community Commons of Lake Houston, and Megatel Homes is developing the 1,000-acre artificial lagoon community Saint Tropez.

In total, developers have platted more than 32,000 future lots in the area, out of a total of 46,000, according to real estate data firm Zonda, although the majority of those are closer to Lake Houston. That pattern is comparable to the Waller Independent School District area, where 41,000 of the total 52,000 homesites are future lots.

Randy and Rachael Hall, of League City-based Windy Hill Development, have also been active in the area for a while. Most recently, the pair started working on the development of the 1,200-home Freedom Trail community along the western side of the Grand Parkway at FM 686.

With future land purchases, the community could potentially be expanded to more than 3,000 acres with up to 7,000 homes, Randy Hall told the Houston Business Journal.

It will likely be the first master-planned community directly on Houston’s newest loop.

Randy Hall, who grew up duck hunting near Dayton 50 years ago, said once the Grand Parkway segment went under construction, developers “jumped across” Lake Houston and began buying land.

“Every large tract between Huffman and the east side of Lake Houston all the way out to Liberty County, to the Grand Parkway, has been acquired by investors or developers,” Hall said.

Ready to sell

Dave Ramsey, executive vice president at NewQuest, said he’s brokered sales totaling about 12,000 acres in the area over the past six or seven years — including 374 to the Halls.

The east side is similar to how the Katy area used to be when the Grand Parkway opened on the west side, Ramsey said. Before, many longtime landowners didn’t want to sell.

“They all used to say, ‘Hey, we're not in the real estate business, we're farmers,’” Ramsey said. “And now the land prices have gotten to the point where they’re in the real estate business.”

While some tracts east of Lake Houston used to sell for as little as $5,000 per acre in the late 2010s, today they are selling for as much as $30,000, he said.

That is still considerably cheaper than in some of Houston’s other growth areas. In the Katy area, $120,000 an acre is not unheard of, he said. And in Waller County, land that sold for in the $30,000s a couple of years ago now goes for more than $45,000.

“That's what's driving people to Liberty County,” Ramsey said. “They can go chase relatively cheaper land, and still there's interest from the builders.”

So how much longer until Houston’s east side becomes similar to where much of the booming west side has already arrived?

Zonda Senior Vice President Bryan Glasshagel estimates the growth will be noticeable in the next five to 10 years, as development is likely not going to happen all at once but in a more staggered way.

“I think you've got some decent developers out there that will know how to balance (building) with demand coming out that way,” he said, “so you're not flooding the market with a bunch of communities.”

Retail follows rooftops

As usually happens, commercial and retail development will follow rooftops. At this point, the still very rural area hasn’t qualified for an H-E-B or Kroger or other big-box stores except for Walmart.

One major project is underway, however, that is poised to bring high-quality food and entertainment development to the Dayton area.

Houston-based Lagoon Development Co. has chosen a 40-acre tract just outside the River Ranch community to build the nation’s first standalone “crystal lagoon,” which can be found in other places as community or hotel amenities. It will include an entertainment district with future retail, bars and restaurants.

The developers of Inland Logistics Park think it won’t take long for Dayton to look much different from today.

“Give us a year and come back and you will be absolutely in awe of what has evolved and changed,” Connor said.

By Florian Martin, Houston Business Journal
https://www.bizjournals.com/houston/news/2024/05/17/grand-parkway-east-side-houston-growth.html