The Thing That Ate Downtown

Downtown’s real estate barons are terrified that Perot-Hicks’ slick Victory project could wreak havoc on their own tax-funded plans to fix the city’s core

In Dallas, city-core advocates say their plans for bringing new retailers and restaurants will not compete with Victory because their focus is more on serving downtown workers, tenants and out-of-towners who might walk from the Dallas Convention Center toward Main.

But from their consultant studies and city staff briefing papers used to support the use of tax incentives, it sounds as if downtown is trying to create in the core precisely what Palladium builds from scratch on raw dirt.

A group of retail experts brought in by the Central Dallas Association last year concluded that downtown needed a "critical mass" of on-street retail space, a better "retail mix" and a host of things that have to do with parking, from making it easier to park on the street to building public parking garages.

Signs of life: A one-block stretch between Main and Elm streets is being redeveloped into a quaint row of restaurants and shops called Stone Street Gardens. All it needs now is tenants.
Peter Calvin
Signs of life: A one-block stretch between Main and Elm streets is being redeveloped into a quaint row of restaurants and shops called Stone Street Gardens. All it needs now is tenants.
Ross Perot Jr. and Tom Hicks hired Palladium to develop their land at the arena. The company's Victory development, displayed above in an artist's drawing, would arrive as an instant cityscape--except one landlord would run it all.
Mark Graham
Ross Perot Jr. and Tom Hicks hired Palladium to develop their land at the arena. The company's Victory development, displayed above in an artist's drawing, would arrive as an instant cityscape--except one landlord would run it all.

In passing its Main Street retail initiative last spring, the City Council endorsed the idea of restoring the core 10 blocks to a "24-hour urban destination neighborhood."

One can imagine how difficult it will be with a fresh competitor, a 21st-century mall less than a mile away. There is evidence, in fact, that competition already has begun.

Cheryl Pickens, a senior project director for the recently renovated Republic Center, says she has talked to an upscale restaurant and several other prospective tenants who have told her Victory is marketing to them, as well. From the looks of it, the Republic Center could use all the new tenants it can get. The steel-skinned complex, owned by financial giant Credit Suisse First Boston, has undergone $75 million worth of renovation for offices, and the owners expect to spend $25 million more converting a now-empty tower to housing. At the street level, though, where retail is supposed to go, it remains see-through.

Since the Boeing Co. chose Chicago over Dallas last May for its relocation from Seattle, the Central Dallas Association has been pounding the table in op-ed pieces and interviews that the city needs to take a much-expanded role if it truly wants downtown fixed.

"Our downtown has been touted by a lot of people as being one of the country's worst downtowns, period. We're a poster child of a bad downtown," Mead says. "There were some bad decisions in the past, bad planning, some bad professional advice. The product of that was the tunnels and skyways that took people off the street." She says the consultants she has spoken to say a turnaround will take at least three to five years. "It's not going to be fixed with one magic bullet."

If Dallas wants results, she believes, it will take a whole bandolier of ammo, paid for in many cases from city coffers: use of sales taxes, a public parking authority, bond money, a development corporation with the power of eminent domain. The latter would buy property from owners, or from quarreling multiple owners who refuse to get with the program.

Mead has taken a leadership role in a newly formed nonprofit group, Downtown Partnership Inc., funded by downtown's property barons and charged with drawing up a coordinated plan for bringing stores and restaurants to the district between Elm and Commerce streets. The city kicked in $150,000 from its downtown TIF. This fall, the organization brought in Washington, D.C.-based Madison Retail Group, best known for its revitalization of that city's chic Georgetown neighborhood, to work as the central planner--sort of like Palladium, but with a more complex job.

One of the "catalyst" projects to get it all going involves the Spire Realty Group of Houston's plan to renovate the Mercantile complex, a full city block of office buildings between Main and Commerce streets. Topped by the Mercantile Building--a 60-year-old limestone hulk with a distinctive, austere clock tower, a feature the developer says will be made to work again--the block is the largest collection of empty space in Dallas, about 1 million square feet. Nineteen years vacant, it is the deadest block in the zone.

Spire's plans for the $100 million-plus project include a mix of apartments and stores, perhaps a much-needed grocery for downtown apartment-dwellers, a bookstore and a parking garage. When it gets down to the big dollars--for this project and Palladium's--the mundane matter of parking is almost always at issue. Garages are expensive to build, usually lose money and can be justified under state law as public improvements worthy of tax dollars if they let anyone come in and park.

To pay for the garage, asbestos removal and other work, the Dallas City Council approved $28 million in tax incentives last February. Nine months later, though, no signs of construction have appeared. "It's moving along, just not as fast as people would like," says Spire President Tom Trzanowski, describing a project that sounds as if it is still in the early stages of design. He says leasing and retail studies are in the works.

Another major addition was supposed to be the 20-story Davis Building on Main Street, an apartment/hotel renovation to be done by Colorado-based Hamilton Properties. In April 1999, the council voted to kick in $1.3 million in incentives for street-side improvements and restoration of the building's façade, but that will have to wait. In June, a bank foreclosed on the building, making it the most obvious part of the Main Street initiative to fall victim to this year's economic slump.

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