John Crawford and I just had a long talk about downtown -- since, ya know, it is his thing. And later today I'll get to some of newsier items he revealed during the course of our chitchat. But I'd originally phoned the president and CEO of Downtown Dallas Inc. to talk about two downtown buildings that are still up for sale -- two of the biggest in downtown, matter of fact: 1401 Elm Street and 1907 Elm (otherwise known as the Tower Petroleum Building, the last of the downtown art deco greats, next door to the Majestic Theatre).
About eight years ago, you may recall, there were plans to turn architect Mark Lemmon's 1931 Tower Petroleum into condos; then came word it would become a hotel; then the economy tanked; now, nothing except a $7.9 million price tag hanging off the side of that extraordinary building. As for 1401 Elm, that's the 52-story, 1.3-million-square-foot George Dahl-ing emptied out and closed down at the beginning of 2010. But when it went back on the market last May at the low, low price of $19 million, Collier's International's exec veep David Glasscock was optimistic it would sell sooner than later.
Glasscock and I spoke again today, and he says, sure, he's had nibbles on both, but nothing substantial -- for the obvious reasons.
"There's just a lot of money sitting on the sidelines right now," he says. "We're seeing some institutions being more realistic about the market price of properties these days, and 1401 is a million-plus office building, and it takes somebody with a lot of vision and equity capital to take it. You don't eat all the elephant at once. You take one bite at a time. And that building is an elephant."
Crawford says that in recent months, his organization's had "an enormous amount of interest in people looking at 1401, more than Tower Petroleum." And part of that, he says, stems from investors seeing real change come to downtown -- or at least, the promise of and potential for change. He points to Leobardo Trevino's purchase of the old LTV Tower and the Statler Hilton and old central library and says, "People are looking to take advantage of the changing face of downtown." Which is why, Crawford says, he's had three calls in the last three days about the old Crozier Tech -- which the California-based owner has said he'll sell over his dead body, just to spite the city.
"What's going on downtown is piquing people's interest inside and outside of Dallas, and 1401, with its parking capabilities and location on DART, and with people trying to be creative with big buildings downtown, is a project ripe for development. But there's a downside -- the size of it." Which Glasscock would agree with -- whoever winds up with the project will need to develop it floor by floor, as Trevino's hoping to do with the Grand Ricchi on Pacific.
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"It's over a million square feet, and trying to get something that large financed, redone, cleaned up, etc., is very difficult," Crawford says. "The people I've talked to, we haven't gotten past first base on moving forward. But people continue to look at 1401 and Tower Petroleum, and there are all kinds of options and variations people talk about. But it's big, and people talk about the price not of the building, but of the redo.
"And it is a concern: Because of where it is, the size of it, we would hope it would not sit there forever in its current state. But it's a concern about how quickly something can be done with that size of a project. The Tower Petroleum is a different animal. It's not as big, but there's not any parking. We were going to do a hotel there, and we were well down the road till the market changed."
Glasscock says, sure, the asking price remains $19 mil. But the owners would no doubt be willing to budge; some real-estaters I've talked to said they thing the building can be had for around half that. Which is still a hell of a lot, given the redo's the thing that'll eat 'em alive. It's what Glasscock calls "sweat equity -- and this take a lot of sweat equity ... that, and a lot of capital." Guts too, he adds.
"Whoever purchases it will have to have a vision and a strategy, because you can't abate it and fill it overnight," he says. "It takes a long time to get your arms around a project like this. Maybe it'll be a foreign entity that has a vision, that says, 'This has been done before in Frankfurt, Paris, somewhere else in the world.' And it'll need to be somebody with equity."