On holy ground

The fight over St. Ann's snares the city, Hispanics, and the Catholic diocese in a battle that tests Dallas' commitment to preserving its past

The prevailing belief in the development community is that the lion's share of Harwood Pacific's real estate projects is financed by the Rolex employee pension fund, but Barbier-Mueller's relationship with Rolex is unclear

In addition to Harwood Pacific, Barbier-Mueller's office is home to the Rolex Texas Realty Corp., a subsidiary of the Geneva-based Rolex watchmaker that owns the Rolex building as well as several blocks of land to the west, north, and east of St. Ann's. Under a company called Caroline Investments, Barbier-Mueller also controls more than a block and a half of vacant land that lies southwest of St. Ann's and is a stone's throw away from the site of the new arena.

Since the Rolex building was erected in 1983, Barbier-Mueller has steadily proceeded with a multi-phase, 15-acre "International Center" that travels north along the tollway, from St. Ann's to the KERA building. The corridor now includes the Centex building, the nearly completed Jones Day building, and a 20-story office tower under construction at the corner of Hunt and Harwood streets.

Barbier-Mueller isn't talking about his project, but company officials have said previously that the ultimate plan is to style the International Center after the United Nations center in New York, making it a self-contained complex in which the landscaping and buildings are architecturally related. Seated at the would-be entry of this complex, the crumbling St. Ann's building doesn't exactly match the sleek, modern design of Barbier-Mueller's concrete buildings.

Developer Newt Walker, who has tracked Harwood Pacific's growth in that area, says that aside from St. Ann's appearance it would still be difficult for the company or any other developer to build on the property if the school were kept in place. "It occupies very close to the center [of the block]," he says. "To be able to build around it is probably cost-prohibitive."

The English and parenting classes once taught in St. Ann's have been moved elsewhere, and the building is closed. While Hispanics still have fond memories of the building, Walker says he isn't convinced that designating it a landmark is the best idea.

"As a private property owner, you don't want third parties telling you what you can and cannot do with your real estate, unless it is something so stellar that anybody, without question, would say we've got to preserve that building," Walker says. "With this building, [designation] certainly raises an eyebrow."

But diocese critic Villasana says that what's questionable is the game of "holdout" the diocese is playing because it is aware of the money Barbier-Mueller has to offer. Why else, he asks, would the diocese have rejected Harwood Pacific's original offer of $4 million if it were in such dire financial straits?

"They wanted more money," Villasana says. "[The diocese] has a...reputation in the real estate business for playing a pretty rough game."

Spokeswoman LeMaster says the diocese's perceived prowess in real estate is a myth, especially the belief that the bishop can just "call Rome" and get a cash advance or unload any one of the dozens of properties listed under the bishop's name in the county tax rolls.

Most of those properties are held in trust by the bishop, and the diocese can't sell them because local parishes own them. What's left, LeMaster says, are a few buildings--including the bishop's house--and a handful of vacant lots that have all been mortgaged.

"What was pledged to the bank was everything that was basically pledgeable, and most of it is on the market," LeMaster says. "As I keep trying to say, there is no vault at the chancery."

Assistant City Attorney John Rogers says he's not troubled by the appearance that the designation process was a tool to block a real estate deal. If the diocese decides to sue, he says, he's confident the city is on solid legal ground.

"The important thing to bear in mind is that historic designation does not control who owns that building," Rogers says. "The whole point of the historic-preservation ordinance is to prevent buildings from being torn down. I think that's what's going down in this case. The city clearly has authority to do historic preservation."

Although Rogers says he doesn't believe the church will sue the city if St. Ann's is designated, diocese attorney Bill Dahlstrom says he is carefully studying the option. Dahlstrom won't discuss any specific legal strategies, but he confirms that his primary concerns are whether the designation puts an unreasonable financial burden on the church and whether it interferes with the church's internal operations.

"There are plenty of case laws that support a city's ability to enact these kinds of regulations. You question whether the ordinance is invalid on its face or whether it's invalid as applied to a specific situation," Dahlstrom says. "We are looking at all possible avenues that are available to us to protect our rights."

In a 1978 case involving a developer's plan to build an office atop New York's Grand Central Station, the U.S. Supreme Court upheld local government's authority to preserve historic buildings. In that case, the station's owners argued they had suffered a significant financial loss because they would not benefit from the income the office tower would generate. By using the New York City's landmark law to prevent construction, the owners argued, the city had "taken" its private property in violation of the 5th and 14th Amendments.

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