Mark Cuban: Good at Owning Basketball Teams, Terrible at Real Estate
Dallas -- nay, America -- has many good reasons to love Mark Cuban. He turned the Mavericks into NBA champions. He's the most accessible billionaire in the universe. He yells at terrible refs on our behalf and feuds with the Perots. He was a disruptor before disrupting was cool. But for all of Cuban's endearing qualities, let's be honest about something: He's really terrible at real estate.
The sample size here is small, just the office complex he wants to build at Preston Road and Northwest Highway and Wonderview, the gigantic mixed-use development he was going to build on a landfill next to Cedar Crest Golf Course.
Wonderview was announced in 2010 to great fanfare and rosy predictions that it would save southern Dallas. It would be massive, 176 acres of shops, apartments, townhouses, sports fields, parks, the Mavs' headquarters and so on costing up to $1 billion Construction was imminent.
In retrospect, the name alone should have been enough to trigger bullshit detectors citywide. "Wonderview" sounds like a ride at Disney World. Not a cool one like Space Mountain either but one in the little kid area with polyresin Dumbos and bored 3-year-olds. How can that development not flop?
Four-and-a-half-years on, Cuban's shovel has yet to pierce the earth, and neighbors and everyone else have mostly forgotten about the grandiose promises. Even the government-subsidized apartments haven't been built, thanks to HUD's refusal to support the project.
"Nobody's paying attention because that property's been over there vacant for over 100 years," says Betty Culbreath, the district's plan commissioner. She doesn't think Wonderview is dead, but she's never met with Cuban or his reps and there is no sign that activity is imminent
Cuban is not unique among real estate developers for over-promising and under-delivering. Deals fall apart. Relationships sour. Even realistic plans can be derailed.
Cuban's proposed office buildings at Preston and Northwest Highway is stupid for different reasons. From an economic standpoint, putting offices there makes sense. Preston Center is the hottest/most lucrative office market in the city right now, and there's plenty of demand for more space. It's how he's gone about getting in on the Preston Center office market that's curious.
As we mentioned last week, Cuban has been collecting properties on that corner since 1988. He now owns six valued on the tax roles at $7 million. This year, according to DCAD's property tax calculator, he'll owe about $200,000 in property taxes. Stretched over three decades, the total he's paid to Dallas County is well into the millions.
That's little more than a rounding error for Cuban, but paying it only makes sense as an investment if there's a payoff at the end, and it's all but guaranteed that Cuban's office buildings won't get built. Trying to do so in a corner of Preston Hollow that is marginally wealthier and more powerful than the one that just killed two less offensive residential projects is akin to vigorously shaking a hornet's nest while naked and deathly allergic to hornets, doubly so when you go about it as Cuban has. Even die-hard opponents of Transwestern's plans to build an eight-story apartment complex on the northeast corner gave the firm credit for transparency and trying to compromise with neighbors. Cuban, by contrast, started razing fences and uprooting trees unannounced and hired a property developer, Michael Romo, whose flippancy has not endeared him to neighbors.
Maybe, though, Cuban is playing a game that's longer and smarter than non-billionaires can comprehend.
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