Seeking to Join Top Tech Hubs, Houston Plans an Innovation District

Houston—Houston’s tech renaissance could spring from the former location of one of the country’s top business innovators.

A shuttered Sears store, located in the city’s Midtown area, has been designated as ground zero of a new tech-focused innovation district, a project that officials hope will help place Houston among the nation’s top tech hubs.

“We want to create a dynamic destination, where startups want to be and where people come to Houston and say, ‘That’s our first stop to find out what’s happening in innovation,’” Rice University president David Leebron told me in an interview.

The repurposing of the Sears site and the surrounding area as a tech hub was originally part of Houston’s proposal to attract Amazon’s HQ2 project. But while other Texas metro areas like Austin and Dallas-Fort Worth are still on the short list of possible sites, Houston was eliminated early. Houston is the nation’s fourth-largest city, and the three cities with higher populations are still in the running for Amazon’s HQ2. “[Amazon] would have been great for Rice and the city, but it didn’t work out, so the question was, ‘What’s the next step?’” Leebron said.

The fledgling tech district would be the physical representation of an effort called Houston Exponential, which was launched last year to boost Houston’s startup scene. In October, the group—abbreviated as HX—launched the HX Venture Fund, a $50 million fund of funds that aims to make investments in about a dozen startups with innovations in connected devices, robotics, advanced materials, and other sectors. In February, HX also absorbed the Houston Technology Center—which had been the city’s oldest tech-focused organization.

Leebron said the innovation district should complement other initiatives underway, such as the Texas Medical Center’s efforts to foster biotech and digital health innovation through its TMCx accelerator and working with JLabs and AT&T’s Foundry programs.

Rice University, through its Rice Management Company, is managing the renovation of the former retail site, a $100 million project that is expected to take two years. The plan is to convert the four-story, 190,000-square foot building and surrounding parcels of land into a startup hub with coworking spaces, classrooms, and offices for corporate innovation arms. City leaders say they envision a revitalized section of Main Street that would attract tech companies and venture firms to set up adjacent offices. Not only would such a district boost the city’s startup scene, but the project could also boost an underdeveloped portion of the city, leaders say.

The development is already counting on two tenants: Houston Exponential and Station Houston, a two-year-old co-working space currently located in downtown, are expected to move to the midtown location.

Leebron said it makes sense for Rice to take the lead on this project. “One of the keys is our ability to invest for the long term,” he says. “These districts aren’t successful without strong participation and engagement from top-tier research institutions. Let’s get the Sears building underway so [the private sector] can begin to see what’s possible.”

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