The Bomb Factory, a 50,000-square-foot venue that went 20 years without hosting live music before it was reopened by Clint and Whitney Barlow in 2015, is Deep Ellum’s crown jewel, and its perfect poster child. What was once a giant warehouse without air conditioning is now a multimillion-dollar, state-of-the-art development that hosts everything from fashion shows to televised boxing matches.
“Everybody goes, ‘Deep Ellum’s never going to be the same,’ and that’s 100 percent true. But that doesn’t mean it can’t be better,” says Clint Barlow, one of modern-day Deep Ellum’s most successful entrepreneurs. In 2009, when Dallas’ notoriously boom-and-bust entertainment district was in one of its deepest busts, he and his wife reopened Trees, a move often credited with helping breathe life back into the neighborhood.
While people like the Barlows have become the face of Deep Ellum’s flashy new era — the mix of bars and tattoo parlors now augmented by chef-driven restaurants and high-end retail stores — the true driving forces behind the change are the property owners who have leased them the buildings.
The names that once dominated the city property records — the Blanton family, Al Jernigan and Don Cass— are all still there. But they’ve been joined by a new, wealthier group of owners like Madison Partners and 42 Real Estate, and most of all, Westdale, which owns The Bomb Factory building.
“We couldn’t have done the project like we did without a landlord (42 Real Estate) who had some vision and could see exactly what it was we were trying to do,” says Jeff Brightwell, co-owner of Dots Hop House, a new bar and restaurant that opened late last year on Commerce.
It’s these people, more than anyone, who are quietly banking on this version of Deep Ellum going it the distance. But even if it does, they know they’re not liable to be celebrated for it. “As long as the neighborhood is successful, that’s the most important part,” says John Hetzel of Madison Partners, estimating that his firm owns hundreds of thousands of square feet in the neighborhood. “We’re used to being the bad guys, deserved or not.”
Whether they realize it or not, Cass is also arguably the father of modern-day Deep Ellum.
“When I started out down here, I spent three years by myself without any help from anybody,” says Cass, who bought his first properties in Deep Ellum in 1979. “It was boarded up buildings, trees growing inside the buildings, holes in the roof. They were trash, they were tear-downs. When I started to build something, no one else wanted it.”
"The city’s motivation was, if it’s not up to standards, don’t repair it, don’t fix it, don’t use it. Destroy it." — Don Cass
Cass wasn’t the first person to buy up properties in the neighborhood, which at the time — in so far as there was any business to be found — consisted of pawn shops, garages and private storage space. Owners like Lou Reese, Al Jernigan and Don Blanton were all in the neighborhood before him. But Cass, who grew up on a farm outside Paris and taught himself tax law at a public library before getting into real estate, was the one to set about trying to develop the property.
“The city’s motivation was, if it’s not up to standards, don’t repair it, don’t fix it, don’t use it. Destroy it,” Cass says. “What happened was they didn’t care about Deep Ellum. Deep Ellum was a slum. It was falling apart. They wanted it destroyed.” But Cass, undeterred, headed to the Dallas Appraisal District office, where, as he puts it, he “made a lot of friends.”
“I said, ‘You got one option: We work together or I have to file a lawsuit because I can’t afford your taxes,’” he remembers. Then he headed to code enforcement: “I told them, ‘I wear a belt and suspenders. If I lose my suspenders, my belt’s going to hold my pants up. That’s the way I’m going to build everything I build.’”
Far from the multimillion-dollar developments of today’s Deep Ellum, Cass’ business was virtually a one-man show. “It got overwhelming. I had my own construction crew. I built my own stuff. I didn’t go in and throw a million dollars at a building because I didn’t have it,” Cass says. He first set about developing Elm Street before then working on Commerce. “It was nothing but what we owned for three years. [The other property owners] all stood around and watched. They wanted to know if I was going to fail,” he says.
Frank Campagna, owner of Kettle Art Gallery, has lived in Deep Ellum on and off since 1982 and has seen it go through several of its cycles. “I had 2,500 square feet and paid $450 a month. It was a big-ass art studio, and I’d have bands play there,” he says, remembering the first place he lived in the neighborhood. “We’d be outside smoking cigarettes and these cowboys would go past on their way to Sons of Hermann. Stirr used to be a transmission shop.”
Cass remembers that tenant clearly. “I got $500 a month rent out of that [guy] and the taxes were about $600 a month from the city,” he says. “That’s just an example of how much I was fighting upstream.”
In 1986, one of Cass' tenants opened Club Dada which, while not the first music venue in the neighborhood, would be the first on Elm Street and is the oldest today to still be in its original building. Green Room, another of Cass’ properties at the time, would have the first rooftop patio in all of Dallas.
Cass’ son Rich partnered with his father and under his prompting their company became the first to convert old warehouses into loft space. “People were coming down from places like Chicago and New York to open businesses or be tenants in other buildings,” he remembers. “They’d be asking in their thick accents, ‘Where do I find a place like what I’m used to?’ After hanging up the phone a few times and saying, ‘We don’t have places like that in Dallas,’ a light bulb came on.”
But by the late ’90s, when Deep Ellum had turned into such a hot spot that Elm Street would be shut down on the weekends, much like Sixth Street today in Austin, Cass says he’d become “tired of fighting” and decided to start selling off some of his properties. It was around this time that Westdale first entered the neighborhood, but so too did some clubs that began to unsettle the balance.
Things began to fall apart fairly quickly as crime increased and businesses were mismanaged. “In less than three years it was a disaster,” says Rich Cass.
Barry Annino, who served as the president of the Deep Ellum Foundation and director of the Deep Ellum Public Improvement District for nearly 20 years until retiring in 2014, points to the bursting of the dot-com bubble as an important contributor to the downturn. Tech startups run by younger tenants, including one of Mark Cuban’s first offices, had helped fill out the neighborhood during the mid-’90s. “It was around 2000 or 1999 that it started feeling like there was a little tension because all these startup tech companies were leaving, all these young kids were leaving,” Annino says. “Everything was ending at the same time. It all came to a head.”
What ultimately helped seal Deep Ellum’s fate was an altercation at an Old 97’s show at Gypsy Tea Room in 2004, where a man named David Cunniff was beaten almost to death by Jesse Chaddock and left with severe head injuries. When Cunniff subsequently sued the Gypsy Tea Room’s parent company, the Entertainment Collaborative, which also owned Trees and the Green Room, it set a domino effect in motion. “The Entertainment Collaborative could not withstand that, it folded, places closed,” says Rich Cass. “The decline was on.”
Deep Ellum became a problem that needed to be solved. “Everybody, including the city, was waiting for some developers to come in, rip it down and extend downtown Dallas and the high rises. I think that was the whole objective and I think the reason that Westdale bought all that stuff down there,” Cass speculates. (Westdale did not respond to multiple requests for comment on this story.) “I just didn’t want to see that happen. I’d worked hard a lot of years. So I came in, bought it all back up, and started all over.”
One of the people Cass turned to was Campagna, who opened Kettle Art Gallery on Main Street in 2005. “Don Cass came to me and asked about bringing the neighborhood back. I said, ‘It’s easy. Just get back to your roots,’” Campagna says.
But getting the neighborhood back to its roots didn’t mean they could afford to repeat the same mistakes. “I brought all the old owners together and said it’s time to stop doing all the same policies, we got to do something different. We went to the city and they suggested getting special use permits for all the clubs and bars,” Annino says. “Everybody said that was the end of Deep Ellum, but that was the beginning of the renaissance, when everything went dark.”
“Then the recession hit,” says Hetzel, who’s now a vice president at Madison. He leans back in one of the black leather chairs seated around a small table in his white-walled office, which sits above Adair’s Saloon and The Free Man, two of Madison’s properties.
Hetzel had come to Dallas to help with the expansion of projects in far away places like Costa Rica and Colorado, but those plans changed. “[Primary owner] Susan [Reese]’s husband passed away around the same time, so we really focused on the assets we had and maximizing those,” he says. “That’s what recessions will do.”
"Once, as a neighborhood, we could speak as one voice, the more the city would listen to us." — Jon Hetzel
That meant focusing, among other things, on Deep Ellum, where Madison’s clients included some of the few businesses to weather the bust, like AllGood Cafe, Twisted Root and Angry Dog. Madison’s presence in the neighborhood stretches back four decades when founder Lou Reese first started buying property there.
Hetzel said some clubs, including Club Europa and Club One, “were devastating our clients.” “One of my first jobs among many was that I was one of the ones who went down to City Council giving speeches to get three or four worst-of-the-worst actors down here kicked out,” Hetzel says.
“It used to be landlords leased to anybody,” Campagna says. The pattern had always been the same: “People would just come down and say, ‘Oh, I want to open a nightclub.’ It was inexpensive and the landlords were happy to have tenants,” he says.
Hetzel and other property owners decided that more oversight and a better vetting process would be necessary to avoid more of the same. So they pushed the City Council to institute special use permits (SUPs) for tenants in the neighborhood, as was already the norm along Lower Greenville. “I offered an interesting perspective as somewhat of an outsider — and certainly some people thought I was a carpet bagger,” Hetzel says, with a shrug. But it worked. “Once a half dozen or so places got out, crime dropped off about 80 percent overnight,” he says.
Rich Cass echoes that sentiment. “When someone approaches me about a [property], now they get asked questions like, ‘Are you presently in operation? For how long? Are you properly capitalizing? Are you aware you have to get authorization from the city by way of an SUP?’” he says. “And if they’re not legitimate, they hang up the phone and leave.”
Josh Florence, one of the co-owners who reopened Club Dada in 2011 and has since gone on to open Off the Record and Independent Bar & Kitchen, says those were difficult days even for those who stayed in business. “Five years ago, it was difficult for a business to survive,” he says. “We got a handful of good breaks that helped us survive until the neighborhood was thriving like it is now. It’s wonderful to wax poetic about the old days, but for a neighborhood to survive you need customers and there weren’t that many to go around five or six years ago.”
The oversight afforded by the SUPs wasn’t a matter of appealing to the greater good; it was a strategy to help protect the property owners’ investments. “Not only are we vetting and choosing who gets to take over the space, a lot of times we’re contributing a significant portion of the capital to build it out. So we’re taking on a good bit of the risk with that business owner,” Hetzel says. “In a lot of ways, the property owner’s at the nexus point and has to deal with a little bit of everything.”
Getting the SUPs was one of many pieces put in place for a neighborhood plan that’s been playing out over the past 10 years. Hetzel would soon join the Deep Ellum Foundation, a property owners alliance that helps oversee the strategies implemented in the area, including the distribution of public improvement district funds, subsidizing the Deep Ellum Arts Festival, and paying for the off-duty police and security in the neighborhood.
Hetzel, who sits on the board with Rich Cass, Scott Rohrman of 42 Real Estate, and Chuck Hixson of Westdale, is currently the foundation’s president.
Barry Annino held that role himself for many years, but he thinks the PID board played an even bigger role than the foundation in legitimizing the neighborhood in the eyes of the city. Those seeds had been sewn even before Deep Ellum’s last boom had turned to bust. “The reality is that in 1999 we started our public improvement district, which for the first time gave the city confidence that we had some kind of continuity, some kind of leadership,” he says. “We went from having residents paying $500 a month to millionaire guys with big investments [sitting on the board].”
One of the keys to development on the foundation’s end, however, has been its ability to foster unity with the Deep Ellum Community Association, which effectively represents the creative interests of the neighborhood. “Deep Ellum also has a lot of very strong opinions and personalities,” Hetzel acknowledges. “Once, as a neighborhood, we could speak as one voice, the more the city would listen to us. They didn’t feel like if they talked to one group that the other group would be angry.”
One thing that all sides have tended to be in agreement on is maintaining the aesthetic of the neighborhood, and Hetzel has helped enshrine that in subsequent rezoning efforts. “Zonings are usually, from the city permitting point of view, the most powerful document that dictates things,” he says. “One thing that I think is critically important with zoning, and that I’ve always pushed for and expanded every chance I’ve gotten, is giving people special credits and rights for keeping old buildings. So you can build something new, but you have much more onerous requirements than if you keep something old.”
While Deep Ellum has changed dramatically in the past five years, thanks in part to things like a badly needed sewer upgrade, repaved streets, new sidewalks, and increased lighting (much of which was paid for through a combination of the PID funds and an $11 million bond that was approved in 2006), the old buildings have mostly been preserved; even when the interiors are gutted, the facades tend to stay intact.
One of the most controversial new structures, the 17-story Case Building high rise being built by Westdale and StreetLights Residential on the corner of Main and Hall, was previously an empty lot.
Not that those decisions have been driven by pure sentimentality. “There’s an economic factor at play,” Hetzel says. “To push out all those businesses to build a high rise is probably going to be prohibitively expensive, regardless of what the rules say. You’d have all the revenues lost of those businesses and the whole nine yards.”
While Hetzel believes that the property owners have done a good job of balancing their own interests with those of the neighborhood, he acknowledges that they — in particular, Madison, Westdale and 42 — have moved aggressively to expand their portfolios, with one of the three closing on a property “pretty well every single week.”
While Westdale holds the most square footage in Deep Ellum, Madison isn’t far behind, boasting such tenants as Cane Rosso, RBC and Monkey King Noodle Co. “To a certain extent, restaurants are a little more stable long-term sometimes. If you make it past the first couple years,” Hetzel says. “When we have a space come available and a couple people are looking at it, it tends to be more often that the restaurant sounds more interesting.”
That consolidation of power isn’t a new phenomenon; for decades, it was Madison, together with Don Cass, Al Jernigan and Don Blanton (whose wife, Jeanne, has taken over his properties since his death) who owned most of Deep Ellum. “Consolidated ownership is usually a good thing, provided the owners have good vision. That’s a decent-sized caveat but it’s important,” Hetzel argues.
With the exception of Westdale, which is based out of Canada, that ownership remains mostly local. But even Westdale, thanks to Hixson, maintains an active presence at that nexus of neighborhood planning and property management. “The nice thing about consolidated property owners that are local is that you get into the meat of [the neighborhood planning] a lot and understand the gives and takes more than the bigger national ones ever could,” says Hetzel.
“I’m a bit of a kook sometimes, but I walk by buildings and can just kind of sense [the history],” says Rohrman. “I fell in love with the architecture. There are a lot of very simple one-story buildings in Deep Ellum, but if you look closely they have little touches of architecture that make a square or rectangular building very, very fascinating.”
Rohrman, who spent 20 years as a commission broker before getting into development and eventually starting 42 in 2004, is a Deep Ellum interloper. He only started seriously exploring the neighborhood in 2011 and began buying property the year after that. “We kept saying no to Deep Ellum because we thought there were issues we didn’t want to have to deal with,” Rohrman says. “But we started researching Deep Ellum because we couldn’t find what we wanted [elsewhere], and we found a lot of those issues had disappeared, like crime, access and so forth.”
"I’m not interested in trying to turn this into a country club or Uptown, but there’s room for everybody." — Scott Rohrman
Five years later, 42 is one of the three big property owners in Deep Ellum. Their tenants include Twilite Lounge, Stonedeck Pizza and Pecan Lodge, as well as most of the newer developments along Main Street, like Braindead Brewing, Jade & Clover, Filament and High & Tight Barbershop. “Our investors wanted us to have a critical mass. They didn’t want me to go in, spend their money and buy two properties, then a year later buy two properties, then a year later buy two properties,” says Rohrman, who claims to have closed on most of his properties in one week.
Not that there was exactly a welcome party awaiting 42’s arrival. Rohrman remembers going to see one particular bar owner who had been “bad mouthing” him, who in turn refused to talk. “I put my card on the bar, slid it across the bar and said, ‘I just want you to always remember that I came to talk to you face to face,’” Rohrman says. “I turned to walk out the door and when I got to the door, he goes, ‘I just think you’re an asshole.’ I turned around and said, ‘Well, at least we’re talking.’”
Rohrman admits that he doesn’t exactly fit the Deep Ellum mold. “I like to wear golf shirts and khaki pants,” he says. He admits that he doesn’t know a lot about music. “I asked [the bar owner] what he likes about Deep Ellum, and he said, ‘I can be me. I can do anything I want.’ And I said, ‘So you’re not going to let me be me?’ He thought about it for a second and realized, ‘I guess you're right,’” says Rohrman. “I’m not interested in trying to turn this into a country club or Uptown, but there’s room for everybody.”
Still, Rohrman was very much a harbinger of change. His arrival “created a sense of urgency,” says Annino. “He started getting these buildings and fixing them up. He’d make them nice, and charge more rent, but you had better quality. Then Westdale stepped up because they’d been the lone ranger all these years.”
This may sound a lot like classic gentrification, which is anathema to a neighborhood that’s supposed to be a gritty home to artists and live music. But Annino says Deep Ellum had no choice but to adapt to the times. “There was less competition in the city [during the ’90s]. Now you a have lot of stuff in town and a lot of quality stuff, so if Deep Ellum didn’t step up it wouldn’t have made it,” he says. “Whatever Scott and Westdale did had to be done for it to even survive, because otherwise it would’ve just rotted.”
That development has had some casualties, some more alarming than others. Early last year, Lula B’s left its two-story retail space on Main Street, citing escalating rent and a lack of parking space as contributing factors. (They relocated to an even bigger space in Oak Cliff.) In the past couple months another retail shop, Elluments, and a restaurant, Luscher’s Red Hots, have suffered high-profile closures. But that’s not necessarily the sign of a bubble getting ready to burst.
“I just ran out of gas, man. I got down there anywhere from two to three years too early,” says Brian Luscher, former owner and head chef at Luscher’s Red Hots, which was on the corner of Commerce and Pryor. “My location on that street corner, that’s going to be a gold mine at some point for someone. [But] if my restaurant had been on Elm Street, it may be a different story.”
"My location on that street corner, that’s going to be a gold mine at some point for someone." — Brian Luscher
Property owners have tried to ensure there’s a variety of different businesses in the neighborhood beyond bars, but striking that balance has led them to play the long game, a luxury that Rohrman credits to having “patient investors.”
“If we had leased up all the space within the first two years, we would’ve been almost predominantly bars,” he says, pointing out that 42 has still only filled about 60 percent of its properties. “Now we’re getting retail tenants that we couldn’t get two years ago because there just wasn’t enough going on for them to make a living — whereas now there’s enough traffic for retail stores to do well.”
“This time it’s a bit more well thought out,” says Campagna, who is himself now a tenant of 42 with Kettle Art. “For the most part Commerce is food, Main is supposed to be retail, Elm is for live music. So there’s a plan of action this time, to a degree. [That’s] just something everybody came to after going back and forth, maybe six or eight years ago.”
Hetzel makes clear that today’s generation of owners aren’t interested in returning to the more one-dimensional bar-centric days of Deep Ellum, no matter what nostalgia says. “Some people’s views, but not those of the property owners, is that it should be Dallas’ Sixth Street [in Austin] or Dallas’ Bourbon Street [in New Orleans]. My big problem with that is that I don’t see it as sustainable and I don’t think the city needs a street to be that party heavy,” he says. “You can be an entertainment district and a more interesting entertainment district with a wider variety of uses.”
Luscher, even as a now-former tenant, is more succinct. “There are a lot of armchair quarterbacks about Deep Ellum, and they just need to be quiet,” he says.
As the store fronts continue to fill in, the attention of the property owners and the Deep Ellum Foundation has gradually shifted to creating a more livable, mixed-use neighborhood. The foundation, for instance, having identified Deep Ellum’s lack of shared public spaces, came up with Reimagine Crowdus last summer. The monthlong experiment closed off two blocks of the centrally located Crowdus Street and converted them into an urban park and event space. It proved divisive, with complaints ranging from issues of traffic flow to lack of street access for businesses, many of which rely on alleys for deliveries and band load-ins.
Property owners also believe there’s a shortage of residential options, despite a number of warehouses that have been converted into loft spaces over the years. “One of the biggest things the neighborhood is missing is residential density,” Hetzel says. The announcement of the Case Building plans in 2015 was met with considerable outcry, but Hetzel admits he can’t guarantee there won’t be more developments like it. “If you want to be a true 24/7, self-sustaining neighborhood, the residential component is critical. As land prices have gone through the roof, it’s really hard to justify buying a piece of land and throwing up a two-story town home,” he says.
However, making those living spaces affordable for the artists or musicians that Deep Ellum wants to keep at the core of its identity is yet another, more complicated, issue. Even Campagna, whom Rohrman says is allowed to stay there “virtually for free,” admits that Kettle Art owes “everything” to his landlord’s help. For his part, Rohrman says “it hurts [his] heart” to see creatives priced out of a neighborhood like Deep Ellum. “Someone might say they want to see residential units stay cheap so that artists can live here,” he says. “That’s all good in a theoretical sense. But how can you guarantee that’s the guy who gets to rent the apartment?”
Unfortunately, not everyone can get breaks on their rent. Rohrman admits that, at the end of the day, he still has one primary obligation as a property owner: to turn a profit for his investors. “Property owners are easy to be blamed, right? [But] it hurts your feelings when people ascribe to you that you’re just a money-grabbing, greedy person,” he says. “You just got to keep your head down as people throw stones.”
Jeff Brightwell, one of the owners behind Dots, which opened last fall, admits it’s a risky concept, decked out with lighted trees, a giant chandelier and a wrought iron and exposed brick decor. “I guess it’s the Texan in me,” he says, wryly. “This couldn’t have happened any earlier than it did, because [Deep Ellum] wasn’t on the rebound. It would’ve been seemingly riskier if we tried this six years ago, when the only thing you could get down here was a busted window in your car.”
Dots, now a property of 42, is carved out of a building that once housed Rich Cass’ office and is only a couple doors down from where Luscher’s used to be. Brightwell, also an owner of Oak Street Drafthouse in Denton and Seven Silos in Austin, says Rohrman persuaded him to open Dots. “Honestly, when we were approached by 42 due to the other projects we’d done, and they asked us to look around, they couldn’t get us interested in Deep Ellum because of what we remembered,” he says.
"They don’t always give the building to the tenant that has the most money, maybe they go with the little guys like us. I think that’s huge and completely unsung." — Josh Florence
Such “curation” of tenants, as many of the property owners refer to it, is typical of how new business gets brought to the neighborhood these days. “The common Joe I don’t think would ever have any clue that Chili’s and Cane’s Chicken are killing to get into a neighborhood like Deep Ellum. But the property owners, they decide who gets in there,” says Josh Florence, who’s a tenant of both CTC and Westdale. “That they don’t always give the building to the tenant that has the most money, maybe they go with the little guys like us that will try their best to keep the integrity of the neighborhood, I think that’s huge and completely unsung.”
Don Cass, who as a note holder on many of the properties that he’s sold to the likes of Westdale and 42, sees his role as a “shepherd” for the neighborhood, believes that “Deep Ellum is on the right track.” “The reason I’m glad to see Scott and Westdale come in here is, look at the size of Deep Ellum. That takes a lot of money, I mean a lot of money, to develop,” he says. “There were many times I got to the point where I gave up. I couldn’t fight by myself.”
Brightwell is similarly optimistic. “I'm excited about the future direction the area is headed. There are some great landlords down here, genuinely good people doing what’s best for the neighborhood,” he says. “I think the best is yet to come for this area, so I’m stoked.”