Dallas' Victory Park Struggles to Deliver a Win
In October 2007, Dallas businessman Ross Perot Jr. was featured in a USA Today story about the unlikely rise of urban living in Texas. Photographed on the balcony of the towering Ghostbar, at the apex of the posh W Hotel, Perot looked confident as he discussed why developments such as his Victory Park—a $1 billion glimmering collection of high-rises, pricey restaurants and shops jutting from the American Airlines Center—were the Next Big Thing.
"You can move into a beautiful downtown home, walk to the arts, walk to a basketball game, walk to restaurants," Perot said. "There is something unique in the downtown fabric that you couldn't get in the suburbs."
Only these days, at his Victory Park development, that fabric isn't getting much wear.
On a Saturday in January, a little after midnight, there are only a few people milling about Perot's district. Most of them are headed to the Ghostbar, one of the few places that hasn't shut down for the night. At the AT&T Plaza, the heart of Victory Park that fronts the southern edge of AAC, two mammoth super screens blare a series of artsy images to a crowd of, well, no one. Billed as "one of the largest outdoor digital mediums in the world," the screens were supposed to be a landmark attraction in the glamorous development. Now they just seem a once-coveted Christmas gift tossed awkwardly aside.
In startling contrast, a few miles across town, in the cozy, older North Henderson Avenue neighborhood just off North Central Expressway, there remains a veritable parade of nightlife. Many of the men are dressed in snug jeans and untucked shirts; the women are mostly clad in denim and tight-fitting blouses. All of them, as if it were a law, are fashionably thin. On both sides of Henderson, running nearly a mile toward Ross Avenue, people crowd the sidewalks and spill into the streets, enhancing the authentic neighborhood feel of the area's blend of homespun hangouts and high-priced restaurants.
While Victory Park, the well-hyped, taxpayer-funded district, can't buy a crowd, North Henderson has gained immense popularity as if by accident. The same tale of two developments can be told about Victory Park and the West Village. On a Tuesday lunch hour in January, there is barely a soul wandering through Victory Park Lane, the boulevard that runs through the heart of the district. Meanwhile, at the always-bustling West Village in Uptown, parking is hard to find—as is an empty table at Taco Diner.
More than a decade earlier, Perot named his project "Victory," which seemed a reflection of his epic ambitions, as if the gods themselves had predetermined its success. He didn't want to open another Cheesecake Factory or an Old Navy in the shadow of a new, publicly funded arena. He wanted an upscale, one-of-a-kind retail and residential district, one that would surprise and titillate. His would be a destination district that the right kind of people would seek out.
Perot didn't apologize for his pretensions. Interviewed by the Wall Street Journal Online in an October 2006 story about the kind of crowd he wanted to frequent the American Airlines Center, he said, "A U2 concert is fabulous. KISS, not so good."
But now, nearly three years after its first shops opened, Victory Park still hasn't found itself. Even before the economy went south, the district often turned into a ghost town when the arena was dark. Ritzy retailers have fled, while other businesses are struggling to hang on. Hillwood, the Perot real estate firm that runs the development, still has big ambitions for its development but recently postponed plans to build a second luxury hotel and now hopes to shed Victory's exclusive image by leasing to more affordable shops and restaurants. The KISS crowd, or any crowd, is now welcome.
"I don't think they spent this kind of money thinking it was going to be this quiet," says Mike Malin, an owner of the parent company that owns the Board Room sports bar in Victory Park. "I think Hillwood put together an impressive mix of nightlife and restaurants, and they expected the community to embrace it more."
It's an unlikely turn of events for a master-planned, 75-acre district that had everything going for it: A rich developer, a prime location, ultra-modern architecture and those towering screens reminiscent of Times Square. On top of those amenities, the AAC is home to the Dallas Mavericks, the Dallas Stars and nearly every musical act popular enough to sell out its 12,500-seat concert capacity.
But Victory Park is still trying to secure its place in the city. On special occasions, like New Year's Eve, when the plaza teems with an electric crowd, the district feels like a public square, a space for collective celebration. No other part of Dallas—not even a resurging downtown core—holds that promise. But at other times, the district seems like a flop—an ill-conceived, sterile mega-development that is as predictable as a shopping mall.
Perot's project doesn't seem like a sure thing anymore. It didn't help that Hillwood bungled the debut, opening with too few stores, and all of them pricey. Or that Victory Park is a destination location that is difficult to find and has innate design flaws that seem to steer foot traffic away from its retailers rather than toward them. And then there's the economy, which continues to sour and decimate high-end retail.
People, particularly the young and the beautiful, are as finicky as they are fickle. Maybe they just like to stumble upon their own haunts rather than fall for a district that was gift-wrapped for them.
"There's the famous line: 'Build it and they will come,'" says Patrick Colombo, the president of Restaurant Works, which operates the Victory Tavern City Grille. "I think that's what Hillwood expected. I think the original leasing team thought they'd set the world on fire."
In November, Lifestyle Fashion Terminal (LFT), an über-trendy clothing store at Victory Park, closed its doors after a 20-month run. In a press release, the owner blamed the down economy and the district's "yet-to-mature trade area."
In many ways, LFT was the embodiment of Perot's original vision. At 30,000 square feet with cold, concrete floors, the place had an edgy, mechanized feel that fit right in with the district's hyper-modern look. In its annual "Best of Dallas" issue, the Dallas Observer saluted the retailer for catering to "serious fashionistas," who were advised to "rethink those plans to make a binge shopping trip to New York and drop the airfare on a spree at LFT."
LFT's demise came just weeks after Nove Italiano, a restaurant with a prime spot in the plaza next to the AAC, announced it was leaving. Before that, Hillwood said it was halting plans to build the 43-story Mandarin Hotel, which, like the W Hotel across the street, was set to include condominiums. Meanwhile, the AFI Film Festival moved its box office to NorthPark, and Noka Chocolate, a high-end Victory Park chocolatier, moved to the upscale mall as well.
Other retailers seem to be barely hanging on. Unlike the district's restaurateurs, they don't see a bump in business on game or event nights. And during lunch hour, Victory Park's shops are often empty; at G Star Raw, a clothing store featuring $180 jeans and $125 wind breakers, a friendly clerk seems surprised when a visitor walks in.
"My personal opinion—and I don't know this for a fact—is that [many retailers] are going to go the way of LFT," Colombo says. "There are so many good shopping centers in Dallas they are competing with."
The recurring complaint you hear about Victory Park—and it comes so often it might as well be etched into center ice at a Stars game—is that the district offers very few low-priced shops and restaurants. Unlike the West Village, which blends high-end retail with affordable places like the Gap and the TomTom Asian Grill, Victory Park doesn't give you the choice of buying an $8 lunch or a $40 pair of jeans. Everything is expensive. If Victory Park did offer low-end retail, the pricier shops might benefit too.
"More and more people are doing high-low dressing where you combine something you bought at an expensive store and something at Target," says Holly Jefferson, a local fashion writer. "At NorthPark you can go to Neiman's or Nordstrom's and then Forever 21 to balance it out, but at Victory, you don't have that option."
The president of Cityplace, Neal Sleeper, who has developed property around the West Village, admits he was initially envious that Victory Park had an anchor tenant like the AAC. That's a guaranteed crowd of around 15,000 people for at least half the year, he figured. But then he realized that it would be difficult to find retailers that could complement an arena. And at Victory Park, the initial dining and shopping offerings seemed too expensive and out of context to appeal to a person who was already emptying his wallet at a basketball game.
"I'm not sure that many people say, 'I'm going to go to a Mavericks game, and say, while I'm down there, I'm going to buy a suit,'" Sleeper explains. "I think [Hillwood's] on the right track by adding some more affordable restaurant and retail options."
To any urban mixed-use district (an area that combines shopping, dining and housing), the vital element is foot traffic. Even if people don't buy a beer, they can add to the energy and bustle of an area, giving off a hospitable feel that makes people want to stay and play. Besides, impulse buys can be a significant chunk of any retailer's bottom line, but not if the area lacks the kind of density that will offer a crowd fleeing a game more reasons to remain.
The original design for the project included developing both sides of Victory Park Lane. But Hillwood put that plan on hold when it postponed construction of the Mandarin Hotel. So now, one side has all the shops and restaurants, while the other is largely reserved for parking lots. That creates a disjointed look and makes Victory Park less pedestrian-friendly.
"The plan was to have both sides of the street filled with stores," says David Levine, who has worked as a consultant on Victory Park. "You can't have a single loaded street; you don't create the synergy of people crossing the street."
It appears that Victory Park didn't follow the fundamentals of mixed-use projects by opening with so few tenants. Levine, who now is a partner in Urban Partners which owns and leases West Village, says viable urban districts need to have at least 50 shops to create a sense of place. West Village has more than 70 different shops and restaurants and has plans for around 30 more as it expands toward Central Expressway. But Victory Park, nearly three years after its launch, has fewer than 30—and opened with far fewer than that.
"You have to fix the problem of door count and store count," Levine says. "It's time to rethink the program and that doesn't mean just putting in more affordable dining."
For a mixed-use development to succeed, you have to get people walking around. But if you only have high-priced stores on one side of a closed-off street, you've failed Urban Planning 101. "You want to have a situation where people feel connected," says Bill Hudnut, a consulting fellow with the Washington, D.C.-based Urban Land Institute. "It has to be a walkable area....you need short blocks, smaller stores, and mom and pop operations."
Perot declined a request for an interview, as did Hillwood CEO Todd Platt. Instead, Platt issued a statement through the company's public relations firm:
"While our project is well ahead of its originally announced schedule, we have experienced some setbacks in terms of store and restaurant closures. As we look to the future, we are refining our strategy—placing a greater emphasis on providing more options that appeal to a broader base of consumers to ensure that Victory Park remains a vibrant part of the new downtown Dallas."
It's easy to forget how starkly magnificent the district looks, particularly in the evening with the Dallas skyline as its powerful backdrop. It would have been less bold to assemble brick and stone buildings and remain true to the architectural context of the arena's retro-look. But Perot has spun a whole, new metallic city out of thin air.
Victory Park is a place that evokes a range of feelings. Its detractors say it's like a Park Cities trophy wife—robotic, cold and plastic.
"It just feels really, really Dallas over there," Jefferson says. "I love to shop and check out new areas, but it just seems closed off, intimidating and exclusive."
But on an aesthetic level, Victory Park is on the cutting edge of architectural design. In particular, its two prominent high-rises, the W Hotel and Cirque, a luxury apartment building, give the city its first truly modern buildings in nearly 20 years.
"We have a great contemporary skyline and the W and Cirque are consistent with that," says John Sughrue, the chief executive officer of Brooks Partners, a Dallas-based real estate and investment firm. "They are progressive, they are modern, and, in essence, they are emblematic of what's happening in the architectural arts at the moment."
But despite the district's artistic flourishes, two fundamental flaws of Victory Park may actually lie in its design. On a warm Wednesday evening in January, when the Dallas Mavericks were hosting the New Orleans Hornets, hundreds of fans were walking from downtown to the AAC. This was the crowd that Victory Park promised for its restaurants and retailers. But there was one small problem. Only a handful of people were strolling through Victory Park Lane, the district's signature street. The rest were walking down Houston, on the east side of Victory Park, where they couldn't see any of the district's shops and restaurants.
"When there's an event, the foot traffic is walking on Houston—so everyone misses all the stores," says Josh Babb, the general manager of Kenichi, an upscale sushi restaurant at Victory. "That hurts a lot of the retailers. They don't get anything on game nights, it seems."
Fans who park their cars in the massive northwest lots may never encounter the Victory's plaza at all. All those businesses who were lured to Victory Park by the promise of a built-in customer base might as well be located in North Dallas.
The second design flaw is related to the first. If you are walking out of the south gate of the AAC and into the plaza where two sleek glass buildings flank the arena, the first thing you see is the side of the W Hotel. There is no clear view of Victory Park Lane. You might not even realize it's there.
"The plaza and Victory Park Lane...would interact better and foot traffic would flow better with a more direct linkage," says Robert Bagwell, one of the founding developers of the West Village. "Since the AAC was built first and had a different architect/planner, its placement may have been set before the rest of the site was laid out. It may have been too late."
Another misstep occurred when Hillwood allowed two of the restaurants on the plaza, N9NE Steakhouse and Nove Italiano, to cover their glass walls. Passersby, walking to a game or a concert, cannot take a quick peek inside. The whole point of the plaza is to create a vibrant public space—think Rockefeller Center—which is why the giant screens line the plaza. You can't let your two most prominent restaurants operate in what amounts to suburban anonymity.
The success or failure of Victory Park doesn't just affect Ross Perot Jr. It impacts the entire city, which has partnered with Perot in the project since its inception.
Victory Park is propped up by tax dollars and incentives, even though other developers in surrounding areas have managed to construct their towering condos and office high-rises without public dollars. Of course, Ross Perot Jr. and his father, the billionaire two-time presidential candidate, have a knack for making millions from government contracts.
In 1998, in a referendum that made the recent Trinity tollroad contest look like a fraternity election, Dallas voters narrowly voted to finance $140 million of the cost of the new arena, more than half the project's price tag. At the time, Perot owned the Dallas Mavericks, who along with Dallas Stars, were to be the two main tenants of the facility. Both Perot and Dallas businessman Tom Hicks, who owned the Stars, wound up selling the naming rights of the new arena to American Airlines for $150 million dollars. Now that same arena serves as the main drawing card for Victory Park, a nifty bit of positioning that few businessmen could have wrangled.
Shortly after passage of the arena package, the Dallas City Council voted to hand Perot and Hicks another $25 million to help develop the abandoned property around the arena. The council also created a special financing district for Victory Park that basically redirects the property taxes that Hillwood pays on the project back to the project itself. In other words, while the property taxes paid by most developers go into the general fund to, say, hire police officers and fill up potholes, Victory's taxes finance its own infrastructure costs like road improvements and street lights. This special arrangement, which is limited only to Hillwood-owned or controlled properties, continues until 2012.
City officials are protective of Victory Park. Typically, before they even discuss the district's struggles, they will point out that Victory Park sits on a site formerly occupied by an old railyard and rickety power plant. After Hillwood carted away the contaminated soil, the Environmental Protection Agency designated the site "the nation's largest brownfield cleanup."
Karl Zavitkovsky, the director of the economic development for the city of Dallas, notes the stark improvement. "It was a blighted area and one of the most polluted areas of the city," he says. "They completely transformed it."
The city's annual report on the arena and Victory Park project suggests that city's incentives spurred nearly $1 billion in development from Victory, greatly adding to the taxable value of the once toxic site. As a result, Dallas will more than recoup the tax dollars it redirected into the project, the report concludes.
But other businesses have financed projects in the area without any help from the city. Harwood International, a Dallas-based developer, built Azure, a 31-story luxury condominium tower, in the shadow of Victory Park. The city didn't give Harwood a dime to construct Azure, which now has to compete for buyers with Victory Park.
"Everything around Uptown and Oak Lawn was already booming," says Sharon Boyd, who led the campaign against the arena. "Ross Perot Jr. knew that. That's why he wanted that land."
David Levine, the former Victory Park consultant, thinks that Perot and Hillwood need even more support from the city to make Victory Park work. Merchants on Main Street, for example, receive rent subsidies from Downtown Dallas, a nonprofit booster group that has been funded by the city. The partnership, which only focuses on the traditional downtown core, needs to expand its boundaries and give Victory Park a hand too, he says. "[Perot's] vision will be realized in time as Hillwood refines its strategy and enlists public support."
The North Henderson neighborhood, however, receives no tax advantages from the city. If Victory's every move seems to be choreographed in a corporate boardroom, the North Henderson neighborhood has an offbeat, spontaneous vibe.
Marc Andres, whose family-run company, Andres Properties, controls a good swath of Henderson Avenue, confirms the obvious. His businesses are thriving, and over the last three years, only one restaurant out of the 30 or so in the area has closed.
"You definitely have the feeling that you're in an established neighborhood," he says about why people come to Henderson. "The sense of place is critical; it's not fabricated. We didn't build a new building and make it look old; these are 100-year-old buildings."
Victory Park, on the other hand, looks monumental and can feel overwhelming; as designed, it can't compete with the cozy neighborhood cool of Henderson Avenue or the upscale hip of West Village.
Levine, who has worked on urban projects all over the country, says he has learned a bit about development by working on a project with director George Lucas. "He told me that the key is to make it look like it's not all planned; the key is to make things look and feel real."
It's a warm Tuesday eveningin January in Ross Perot's district, a little after 8 p.m., but if you didn't know better you'd think ice storm warnings had kept people at home. At nearly every restaurant, the waitstaff seems to outnumber the patrons. At N9NE, the hostess says the kitchen closes at a different time each night, depending on traffic. Tonight, that's 8:15.
This is a trying evening for Victory Park, and it underscores its greatest challenge: How does it survive without a game to rely on? Tonight, like nearly 15 other days this month, there is no event at the AAC. Restaurants might draw patrons on a game or concert night, but on other nights, particularly in the summer months, it's a struggle.
"It was tough, and it still is tough," says Patrick Columbo of Victory Tavern. "You have to work really hard for your base revenue."
There are, however, signs of life. The W Hotel doesn't live or die off the arena and has lived past the white-hot buzz that surrounded its opening. According to the Texas Alcoholic Beverage Commission, the Ghostbar earned over $5 million in alcohol sales between November 2007 and October 2008. That's a 22 percent drop from the year before but still an impressive tally. Kenichi also draws its share of customers. The sushi restaurant had its best night ever on New Year's Eve when a gala on the plaza drew an astounding 40,000 revelers following the Stars game.
A crowd of 300 also gathered to watch the inauguration of Barack Obama on the plaza's mega-screens. The diverse group instinctively gravitated to Victory Park that morning, which suddenly seemed transformed into a place for public celebration. On other occasions too, when Victory Park shows a movie or college football game on its 30-foot screens, the plaza is vibrant and relevant, like an ultra-modern town square. These types of ordinary gatherings could become one of the defining features of Victory Park—and may help turn the district around.
"That plaza, right now, has become the de facto public meeting space, whether it's to watch New Year's Eve or the inaugural, and Dallas needed that," says developer Sughrue. "It's important to the city, and Victory set out to do that."
Other establishments are hoping that Victory's new office tenants will create enough synergy to boost their business. Haynes and Boone, one of Dallas' largest law firms, recently moved its offices from downtown to One Victory Park, a handsome new building on the southwest corner of the district. Ernst & Young, the prominent accounting firm, is relocating to Victory Park. Hillwood has also added three new restaurants to the district including a reasonably priced Asian eatery and a pizza place. Meanwhile, the Dallas Museum of Nature and Science is scheduled to break ground this year.
If enough people move into Hillwood's residential properties, Victory Park's businesses can feed off each other, in much the same way a pinball ricochets off metal bars. That would help the district reach "critical mass," a phrase heard in nearly every conversation about the development's viability. The critical mass figure, though, is hard to quantify. No one knows exactly when or if the district will have enough people to become a vibrant, bustling community. It's a tricky, chicken-and-egg dynamic too: People won't come to Victory Park unless more businesses open, but more businesses won't open unless more people come. To some, this is an intractable problem, especially if Hillwood doesn't start leasing out more affordable apartments.
"Unless we design mixed-use districts for people of multiple income levels and we have the critical mass of retail and rooftops, [Victory Park's] doomed to be deserted," says Neil Emmons, a city plan commissioner.
While some developers wonder if Hillwood can turn things around, others think that the district, for all its headaches, is simply too big to fail. Eventually, it will achieve that elusive critical mass of retail, restaurants and residents.
"With each building that opens up, it's going to feel more comfortable and more dense, and it's going to start having that sense of place," Sughrue says. "It's way too early to describe Victory as anything more than a work in progress, but if you step back it's remarkable what they've done over there."
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