Will a Trendy Facelift for an Old Oak Cliff Apartment Building Make It the Next Big Thing?
Chris Epp walked onto Stevens Park Golf Course in West Oak Cliff nearly a year ago for a day of golf with his co-workers. Although their visit was for pleasure, Epp couldn't help but notice a business opportunity lurking ahead. "On the first hole, I looked up, and there was this giant, 11-story, white monolith sticking up out over the canopy of trees," he says. Epp, who works for the Dallas office of Apartment Realty Advisors, says that was the first time he or any of his co-workers had been to that area. As they played the course, Epp realized it was an apartment complex. "I jokingly said that I was going to sell that tower by the end of the year," he says. "They all laughed and said to have another drink."
Shortly after their outing, Epp called the owner of Wedgwood Tower Residences to strike a deal. Unknown to him, the owner died a couple months before his call, and the estate was planning to sell the property. Epp pounced on the opportunity to broker the sale, saying he was struck by Wedgwood's mature landscaping, 8.2 acres of park-like land, location next to a golf course and proximity to Oak Cliff's thriving Bishop Arts District. Epp says it was an obvious undervalued asset, and he saw it as a diamond in the rough.
He didn't make good on his promise to sell the property by the end of 2007; Wedgwood wasn't put on the market until January 2008, and on April 10 Wedgwood was sold to Bostonian Investment Group, which has been in the Dallas market for one year and the Texas market for three years, where it has acquired more than 4,000 of its approximately 6,000 units. Chief Executive Officer Justin Meszaros says he felt an impulse to buy the property, which will be changed into The Indigo to create a more "upscale, trendy, urban feel." The restaurant on the first floor will be phased out, he says, because it operates at a loss of $40 per day. Meszaros says he hopes to attract a new restaurant, along with a café or possibly a Starbucks.
Dorothy "Dot" Toops, who has lived at Wedgwood for nearly two years, says the change has been met with a mixed reaction by residents. She claims the tower is split 50-50 between those embracing the change and those opposed to the new ownership's plans. "Many of the older residents are out of touch and fear change," Toops says. "And they are upset that the restaurant is closing soon." The majority of the older and handicapped residents rely on the restaurant for their meals, according to Toops. Several residents were approached for interviews, including an elderly woman who has lived at Wedgwood for more than 21 years, but none of them were willing to talk about the ownership change, and some weren't aware of the new plans.
Built in 1963, Wedgwood Tower was originally a community for residents ages 50 and above. The demographics changed over the past several years, and only 60 percent of the tenants were in the 50-plus range one year ago. There has been a dramatic shift since residents with children were allowed six months ago, resulting in a drop to 40 percent of residents older than 50 at the time of the sale. Toops says there are still regular ambulance visits to the tower, but the younger residents represent "the greatest ethnic mix I've ever seen."
Toops, who describes herself at the lower end of the over-50 crowd, is excited about what is happening in West Oak Cliff, calling it "the new Oak Lawn." She says the upcoming changes at Wedgwood are simply a microcosm of the city. "Bring it on. Bring us change. Give us a chance to grab a beer every once in a while."
The property was owned for more than 40 years by Ray Stern, who died March 6, 2007, at age 74 of an antibiotic-resistant infection after having an elective surgery. Before becoming a real estate entrepreneur, he was a bodybuilder and champion professional wrestler for 21 years. Known as Ray "Thunder" Stern, his first business venture was building health clubs in California before buying Wedgwood Tower. "All of the residents mourned when he passed," Toops says.
In the years preceding Stern's death, Toops claims, the property fell into disrepair. At the back of the lobby, more than a hundred phone books are stacked next to mailboxes held together with duct tape. Two glass doors lead outside to a swimming pool and a pond with geese, ducks and other wildlife. Within a few feet of the doors, 11 peafowl are gathered in front of a rusted iron fence. Some of them are perched on the fence, and chips of white paint falls when they move. In front of the complex, one bird with a blue neck and green feathers passes by. It makes a loud squawk, and Toops says, "That's the sound they make every night." She claims about 70 peafowl roamed the property in recent years and she hopes part of the new plans will include removing the birds, although she says keeping a couple might be good to keep the history of the complex intact. Meszaros says he is meeting with specialists to find a way to relocate them to a safe environment.
Bostonian Investment Group, which changed its name from The Lindahl Group at the beginning of the year, plans to put another $2 million into the project to cover the name change along with giving the building a fresh coat of paint. The lobby will be redesigned, more landscaping will be added, the leasing office will be expanded and work will be done on the roof and penthouse. Meszaros plans to have the windows glazed blue to create a "soft, inviting atmosphere." He says he spoke with "trendy individuals" in Dallas, Las Vegas and South Beach, Florida, to come up with the new name and theme. Meszaros will be working with architects and designers over the next couple weeks and hopes to start making changes in 30 days. "We want to create a vibrant community and really put together a structure where people are excited to live."
Meszaros, who moved to Dallas' Uptown three months ago, says the Massachusetts-based company acquired the property at a great price of approximately $13 million, even though it is on the tax rolls for a paltry $1.8 million. He would not reveal the independent appraisal amounts done on the property, but Meszaros says they were "significantly higher" than the purchase price, which he maintains is roughly a quarter of the replacement cost of the complex.
A fourth-floor fire on December 3, 2005, caused damage to 70 of the tower's 299 units, and Meszaros says the previous owner recovered nearly $7 million of insurance money, which was used to renovate the rooms and build a state-of-the-art fire alarm system and new elevator. "All the types of things that could literally take us under if there was something wrong with them have been taken care of, so that's exciting," he says. "Now we just have to focus on the cosmetic things, which we're very good at."
Wedgwood's change to The Indigo is just one of many new developments in the area. Just north of the apartments, the Fort Worth Avenue TIF District was created with $80 million in tax money allocated to the area. Several mixed-use developments including a movie theater are planned nearby. "The Oak Cliff area is going to be a new hotspot," Meszaros says. "Seeing how fast Uptown developed and how fast the Trinity River Project is coming together as well, Oak Cliff is going to be big."
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