A low cost of doing business, an abundance of land, low taxes, and a business-friendly environment. Those are just a few of the reasons companies are discovering Southern Dallas County. It’s also the location. The region’s transportation infrastructure – multiple interstate highways, rail lines, and airports – allows businesses to serve the entire North American continent, while being only minutes from downtown Dallas. Companies such as Amazon, BMW, Frito-Lay, and Whirlpool have established large industrial centers. Now, momentum is building to bring more retail and residential to the southern sector, too. To get an update on activity, we gathered a panel of investors and developers helping to pioneer the region. Here’s what they had to say.
CHRISTINE PEREZ: Let’s start by getting a little background info and learning more about what each of you do.
TERRENCE MAIDEN: I’m executive vice president at Corinth Properties, a retail and mixed-use development firm owned by Frank Mihalopoulos, who has been keeping us busy in southern Dallas. We just finished up Glen Oaks Crossings, a mixed-use development anchored by WalMart and we’ll add some residential to it. That area was considered a food desert, so it’s been well-received by the community. We’re also involved with The Canyon in Oak Cliff, a 211-acre mixed-use development, with Stratford Land. We recently broke ground on a Marriott Residence; Civitas and the EB-5 program is a part of that development. And we’re doing Alexan in West Dallas with Trammell Crow. Then finally, the big project that we’ve recently been tapped to redevelop is Southwest Center Mall. I’m a product of Oak Cliff and went to Carter High School.
BRENT JACKSON: I’m president of Oaxaca Interests. We started finding opportunities in Oak Cliff in 2007, and our flagship project is Sylvan Thirty. It’s a mixed-use development comprised of 201 lofts — don’t ask me where we got the one extra loft—and then about 48,000 square feet of retail, anchored by a local grocer named Cox Farms Market. They’re a fourth-generation grocer out of Duncanville whose roots are actually in Hereford. We’ve been very selective on what type of tenants go into that space, particularly local and regional tenants. We’re trying to steer clear of national brands, so curating that has been a challenge but also a welcomed opportunity. We have several land holdings in West Dallas, and we’re also actively pursuing the redevelopment of the Chase Bank building that’s across the street from Sylvan Thirty.
DREXELL OWUSU: I’m managing director and chief of staff at Civitas Capital. We’re a real estate private equity group that invests primarily through the EB-5 program here in Dallas. We’ve raised about $350 million of projects in and around Dallas, including seven investments in southern Dallas. We also manage the GrowSouth fund, a real estate investment vehicle focused on real estate investments in southern Dallas. It’s got a double bottom line, because we’re also trying to ultimately seed and help southern Dallas grow.
CHRIS TEESDALE: I’ve been with Colliers International for 11 years and industrial real estate has been my specialty since 1978. We got planted in South Dallas about 2007 and have been working with Mike Rader down there on quite a few projects. We’ve had a long run down in the region.
MIKE RADER: I’ve been in southern Dallas a long time, too. I’m a Tarrant County guy that came to Dallas County. I made a passive investment in 1984 at the corner of Interstates 20 and 45, and it has turned in to be more than a passive investment over the years, and now I’m very active in trying to bring development to that corridor. We’ve had a lot of opportunity show up and, finally, after about seven years of effort, I got Union Pacific Railroad to agree to build their intermodal facility and that has been the stimulator for creating an Inland Port in that area. The Inland Port is very crucial to the development of industry and bringing goods into this area to support all the population growth for the whole corridor—Dallas, North Dallas, everybody. So we’re having some good times right now. We’ve put together a 900-acre park, Sunridge Business Park, and it has some new tenants in it. Now I’m working on a 3,000-acre real estate industrial park. We’re trying to bring manufacturing into that area and create some new dynamics for the whole corridor.
ROB RINER: You done?
RADER: Well, I can keep going but…
RINER: I know. Well, I’m Rob Riner and I follow guys like Mike Rader, who went to L.D. Bell High School and the University of Texas at Arlington—the only other guy in the business besides me who has done both of those things. So I hang around the rim and just pick up his crumbs. I’m a real estate developer by training. My last tour of duty was with Panattoni, but I’ve gone back out to focus on Rob Riner Cos. full time, which just had its 10-year anniversary. My most recent deals in southern Dallas are the Procter & Gamble building down in Wilmer for 1.4 million square feet, and right before I left Panattoni we acquired 100 acres in Lancaster in a joint venture with MetLife to build out part of Dallas Avenue, which would eventually be 4 million square feet. Lastly, we’re just wrapping up two buildings that are both 211,000 square feet at Park and 35. Those will come online in May. Other than that, I’ve been looking at South Dallas since my days at First Industrial in 2004 and I’ve watched it develop, as Mike laid the infrastructure and it actually turned it into a market.
STEVE BANCROFT: I’ve been with Trammell Crow for 18 years. I started in industrial in 2005 and then really got into building residential with Trammell Crow Residential in 2011. I cover Dallas, Austin, Fort Worth, Denver, and the Pacific Northwest for TCR. We’ve got about 22 deals either under construction, financed, or completed in those markets, and about a $1.5 billion capitalization since then. In southern Dallas, we’ve done a deal in Oak Cliff over by Methodist Hospital, we have a deal next to Brent in West Dallas, and a deal in the Design District as well.
AMANDA LAKE: I’ve been working in Oak Cliff for 26 years; I started back when Bishop Arts wasn’t Bishop Arts. It was all boarded up—I’ve got pictures to prove it. I’ve done a lot in Oak Cliff, and in Waxahachie and Ennis, as well. I’ve probably pulled about 280 certificate of occupancy permits in the last year alone, so I’ve become a zoning expert. I’ve been very involved in Oak Cliff in almost every boarding commission you can think of or every planned development that’s ever been created, I’ve been involved. But that’s what I do, I like old things and I turn them into beautiful things and revitalize them.
What led you to get involved in developing or marketing commercial real estate in southern Dallas?
RADER: I participated in a partnership that made an investment around the three interstate highways, thinking I had an opportunity to get out in about three years. But it has taken a quite of bit longer time to get my investment returned. I saw a lot of opportunity for that interstate highway system to generate more business activity and industrial growth possibility; there’s a lot of things you can put on those corners. Now we’ve got Amazon sitting there, but it’s a beautiful piece of property and it could have gone, I thought, to a higher better use. I had to learn a lesson. Experience tells you a whole lot, and it wasn’t going to happen that way.
RINER: I got to South Dallas by getting beat by South Dallas. I was in south Fort Worth with a large spec building in 2007 and every deal that came through ended up locating in South Dallas and so the light bulb kind of went off and I said, “Well, why are they locating in South Dallas?” It came down to one major thing: the freeway system and where that freeway system is situated within our region. If you look at North Texas and the 7 million people we have here, and then you look at the Texas triangle, down to Austin, San Antonio, and Houston, then you’ve got 25 million people within a four-hour drive. Every move that has been made in South Dallas has been logistically driven—Ace Hardware, Procter & Gamble, Georgia Pacific, Pepsi, Quaker—everyone has gone down there. That’s why it’s lit up.
TEESDALE: My business partner, Tom Pearson, and I got involved down there in 2007, listing 400 acres of land. We knew that everything made sense down there. Interstate 20 was improved, and I-20 and I-30 go to both coasts. You’ve got a massive highway crossing through there and you’ve got I-45 down to the ship channel, so it all converges right there in the southern sector. From that standpoint, it made sense just from the trucking standpoint. Then you add the rail and the availability of a lot of inexpensive land. All of those factors just kept making more sense. As long as we’ve been down there — it’s going on nine years — it’s been a great ride. Everything we’ve been telling people about is coming to fruition.
BANCROFT: I’ll tell you what’s new this cycle, though: institutional capital wants to be there. We can’t do a deal unless capital wants to be there, because Trammell Crow Residential is only 3 percent of the money in a typical deal. So, we’ve got to raise money from a bank or a Civitas or a UBS to finance the transaction, and in the last cycle that wasn’t available in South Dallas. This cycle it is, and I think it’s because of the infrastructure. The vision of the city of Dallas and the infrastructure the city has invested in — the bridge and what they’ve done with Fort Worth Avenue has got people making big bets. I’m going to use a term; in history, it’s a negative term, but in real estate, it’s good term, and that’s a dictator. You have a dictator, like Phil Romano in West Dallas, who owns a lot of land and can actually make something happen. You don’t have 40 different owners that are pushing and pulling in different directions, and because of that, I think West Dallas has been a success.
LAKE: I also think that the fact that the mayor (Dallas Mayor Mike Rawlings), with his GrowSouth initiative, has done a great job in promoting the southern sector. It wasn’t until the city of Dallas invested $2.1 million in Bishop Arts that it became popular, and it wasn’t until the mayor started really promoting the southern sector that a lot of people started focusing there, and more money started coming in.
OWUSU: I agree. I think one of the big differences we’re seeing in terms of the emergence of southern Dallas is that everywhere else got really pricey. We’re all real estate folks and in the end, we like you go to where the opportunities are. Southern Dallas kind of emerged as this, “Oh, why is nobody doing anything here, and look at all the great opportunities there are to get things done.” I think it’s fascinating. I mean this geography—it’s a massive area that has historically been underdeveloped, and I think that’s the golden opportunity. There aren’t a whole lot of cities where the population is bigger than Atlanta, but you can go five minutes from downtown and find raw land to develop. That doesn’t happen.
BANCROFT: Drive time to jobs is a major factor in residential; clearly West Dallas, South Dallas, and East Dallas have that advantage.
TEESDALE: That’s one of the things we sell to corporations. You’ve got access to a huge geographic area within a 30-minute drive time, which seems to be the acceptable maximum drive time to and from work. You plot a map down there, look at geographically how big a 30-minute drive time is to South Dallas — it’s huge.
MAIDEN: Yeah for our company, a lot had to do with timing from the Mayor Rawlings’ office and his vision for GrowSouth. It just seemed like there was a lot of energy focused down south. And then for me personally, being a product of the area, it goes back to a motto that my high school coach told me: “Pride, respect, and responsibility.” I take great pride in being a product of southern Dallas and that fuels my energy. The respect factor is having individuals like Frank Mihalopoulos and everyone around the table who are willing to invest. I think we’re all responsible as developers to give back to communities that are underserved.
JACKSON: In 2007 when I was looking for a house and ended up buying one in Oak Cliff, I saw that Dallas was changing as a city. I don’t think it’s out of line to suggest that Dallas has had a history of prejudice, and to finally see the newer generations let go of that was a big driver for me. Anywhere that you can find socioeconomic diversity, I think you’re better suited for a long-term investment. South Dallas has those elements, so that’s why we’ve put a lot of capital in. I, too, have to commend the mayor’s role in driving interest in the southern sector. As we continue to move forward, I think we’re going to only see more growth—I think we’ve just scratched the surface. I can’t speak to the industrial component, but from a residential standpoint and clearly from a retail standpoint, we are well underserved.
When you’re out there selling the region to either investors or tenants or buyers, what kind of story do you try to tell? And how has that changed in recent years, if it has?
RINER: It has changed a lot over the last 10 years, from our perspective. Steve hit on it earlier, it’s an institutional market now. When the institutional capital comes in, the story gets easier to tell, because you’re not pioneers any longer. With the Chamber, The Real Estate Council, and the mayor’s office all behind it, South Dallas has become a market in itself now. People are trying to get a position in the sector and they’re willing to hold that position for this cycle and for the next cycle, too.
TEESDALE: A lot of the corporations that have moved down there didn’t have an operation in the Dallas area, so they looked at all the logistical benefits that are offered in South Dallas and it made sense to put a new facility there. North Texas has become a safe harbor for so many of these big corporations because Houston continues to have flooding and you continue to have the snowstorms up in the east that just freeze the city, so then trucks can’t move and product can’t get to where it needs to go and so it shuts down. That disrupts the entire logistics model. So more corporations are recognizing the benefit of being here just from a safety standpoint, for getting product in and out. That’s one of the things we’re selling to a lot of corporations.
What about retailers?
MAIDEN: I think one area in South Dallas that we’ve garnered the confidence of retailers in is Cedar Hill. Glen Oaks, surprisingly, was a home run. Once we were able to land WalMart, we got our center leased within 12 months. We actually had more users than we had space. That speaks to the reality that there’s a pent-up demand in southern Dallas, if you can deliver a quality product and development. With Southwest Center Mall, our pitch is more about the regionality of the area and not just focusing on just Oak Cliff, but being able to pull from Duncanville, DeSoto, and Cedar Hill, which has raised the eyebrows of a lot of retailers.
So where does that project stand right now?
MAIDEN: It’s very encouraging. We are very fortunate to have a good owner in Peter Brodsky. He is really committed to the area, and he’s committed to our team and to the vision. What’s been most surprising is that as bullish and out there as our plan is, people are really buying into it and that is exciting. I think it’s going to be a catalyst for a lot of other things that’s going to happen in southern Dallas, and I think it could be a good litmus test of what can really happen if you can pull the right capital group, the right retail team, and the right vision altogether. It can really transform a whole community.
LAKE: And you’re thinking of adding a grocery store?
MAIDEN: Yes. We’re definitely thinking mixed-use. We’re underserved for grocery, so we’re having conversations with different grocery stores. We think with the number of different churches in the area, maybe some sort of hospitality, definitely some more urban residential, and then office, which is underserved in the area, too.
We talked about some of the selling points. What are some of the challenges that still remain in the region? And what types of investments can the city make to help?
RADER: We’re creating jobs in the Inland Port area, the Dallas Regional Chamber has been very helpful in that. We’ve identified about 2 million people living within 30 minutes of that area, and those 2 million people represent a good portion of the population of South Dallas. But we need public transportation bad in the southern Dallas corridor. DART has some activity coming in around the University of North Texas-Dallas campus now, but this population is really east to west. Having that could definitely help us get people to the Inland Port area, where so many jobs are being created. Infrastructure is the next big need. The cities of Wilmer and Hutchins along I-45 do not have the economic capability to do all of it, so Dallas County and others have stepped up and assisted in that and it has helped out a lot. I think there have been projects that would have come into the Inland Port area that went someplace else because we didn’t have more infrastructure in place. We are getting it in place now and it’s showing to be significant, as far as the additional amount of interest it’s generated.
OWUSU: One of the big challenges is still the mythology of Dallas, this perception that things can’t happen down south; even though, as we all know, everything is happening down there. We have this EB-5 program to promote to foreign nationals. They don’t know Dallas, so they don’t have this view. We get to tell this great story about how awesome our city really is and whether it’s in southern Dallas or northern Dallas, they don’t care. They’re like, “Oh, great, there’s a ton of people coming here in the last 10 years? Awesome. Oh, there’s jobs? Great, how do I invest?” It’s telling the story to help people understand what’s really possible.
JACKSON: I think that’s a challenge I saw, too. The old guard — and most of them have retired by now — thought that the low-hanging fruit was along the toll road going north. That’s all but gone now, thankfully, but for a while there it was tough selling (Southern Dallas). But when foreign nationals or people from New York or San Francisco flew in, they drove around and they thought, “Oh my god, this is the most beautiful part of the city.” So there was some leapfrogging that happened, but I think we’re past that now.
TEESDALE: One of the other things you can track is the capital. The capital was slowly moving down to I-20 and then it started moving east toward I-45 and then it went on down to I-45. From our standpoint it’s extremely important to watch where the institutions are willing to put their money, and the more they gain confidence, the more opportunities opened up for us down there from an industrial standpoint.
BANCROFT: Yeah, we don’t need all aspects of live-work-play-recreation to make a deal and drive capital to a site, but we have to have two or three of those aspects. In West Dallas, we had two or three of those aspects we were able to drive capital to that location. I don’t think I’m giving away a secret here, but we’re a $5 Uber ride away from all four aspects in Uptown, and if you live in West Dallas or you live in the Design District or you live in the Cedars, Deep Ellum, you’re saving $400 to $500 a month in rent for a new, Class A product. That’s a lot of Uber rides.
Do you think we’re going to see more multifamily development in the southern sector? And what about single-family, and trying to get some middle-class housing options going?
BANCROFT: I think you’ll get the Cedars fully built out, then we’ll get West Dallas fully built out, I think you’ll get Deep Ellum, which now has kind of that dictator-type leadership with Scott Rohrman. Further south, I think education becomes a real factor, from a residential standpoint, but for the single-family and multifamily, I think we’re making great strides as a city and heading the right direction.
MAIDEN: The need for student housing around that UNT-Dallas campus can spur a lot more residential growth in that area.
What kind of impact do you think the campus and the DART station is going to have?
MAIDEN: The president of UNT-Dallas has a really bold vision for the area. They’re committed to increasing their enrollment over time, and I think the rail system is going to help. From my understanding, they’re getting ready to start construction on a new phase, and there’s a lot of land around the campus, so that makes it attractive for residential groups to come in and take a look at it, too.
On the industrial front, we’ve seen a lot of distribution centers. What’s the demand for manufacturing?
RADER: We’re talking to multiple parties right now with regard to manufacturing facilities; infrastructure is a big key. Two of the users we’re talking with are very large rail users, and we’ve got a great rail system tied to the interstate highways, so that’s going to have a good bearing on it. We’ve got a labor force to show with a 30-minute commute, and 15 minutes to downtown Dallas if you want to go have lunch at Capital Grille. Everything is easily accessible, but our key is the labor force. These are 100-acre type manufacturing facilities, a good asset to have in the southern Dallas. It changes the economic considerations from a distribution facility to a manufacturing facility, as far as payrolls go, and that can generate a need for more residential growth.
TEESDALE: We’re working with two manufacturing operations in the 250,000- to 300,000-square-foot range in the southern Dallas County sector. And oddly enough, one of the things driving both of them is the Houston ship channel. They’re bringing things up from the Houston ship channel, and it’s being processed here. We’re seeing more demand for foreign trade zone facilities. It’s coming, but again, one of the things that will help drive that point home is the accessibility to labor. Amazon wouldn’t have planted a 1.5 million-square-foot fulfillment center if they didn’t have good access to labor. The labor is there — it just needs to be promoted.
So what does it mean to the sector, having Amazon and some of the other big brands that we have down south now? Does that put a stamp of approval on things, and what can be done to leverage that?
TEESDALE: I think a lot of major corporations feel comfortable being around where other major corporations are. So the more brand names we get in the southern sector…
BANCROFT: Herd mentality, huh?
TEESDALE: It is the herd mentality, exactly. The other thing we’re starting to see is major park developments; a lot of the companies we work with like to be in a planned business park.
RINER: And the FedEx hub doesn’t hurt you down there.
TEESDALE: Right. It’s huge.
BANCROFT: One of the things that turned my head is looking for new housing under $150,000. That’s hard to find in North Texas right now. You can’t find it. You can’t find it north, you can’t find it east, I don’t know if you can find it west. That’s going to be a driver, because there’s a housing shortage in Dallas.
So what does it take to get builders to start building those homes?
RINER: Well, the manufacturing, like the GE locomotive plant in North Fort Worth…
BANCROFT: Proximity of jobs.
RINER: If you get more manufacturing, you’ll get that and then the schools. We need a little bit of help on the schools in the southern sector. I know that there’s some things in the works on that.
RADER: We’ve got a new elementary school at J.J. Lemmon and I-20 in the Wilmer-Hutchins school area. The No. 1 school to be built off the bond program is going to Wilmer, and we’re trying to assist in finding a location for that school and hoping that we can build some residential right around it and stimulate more education investment in that area. Education is a big key. If you’ve got quality education, you’re going to find people wanting to move and live close to it. I like what I’m seeing from Dallas Independent School District right now, as far as education for the kids. They’re getting out of the box and they’re creating some new educational tools that I think will be very good for children. We’ve got a junior college down there, we’ve got UNT-Dallas. These companies want the labor force, labor force wants to have good education,
TEESDALE: Well, UNT-Dallas and Cedar Valley are both there and promoting education for jobs in the industrial environments down there; that’s something that’s not talked about much.
OWUSU: Again, this goes back to the fact that we have to tell the story, because the world doesn’t know all these people are down here. I live in southern Dallas, and I didn’t know all these people were down there until I was, too. We have to tell this story more and more, because the bigger it gets, the faster it’s going to happen. It’s a momentum business. That’s what real estate is.
Switching gears a little bit, let’s talk about the impact of small developers in southern Dallas. We’ve got several great examples on this panel. What kind of impact you’re having and will continue to have? And how have things changed since you first got involved?
JACKSON: At Sylvan Thirty, we raised our first dollar in April 2008, so it has been patient capital, to say the least. I don’t know if it was youthful exuberance or just ignorance, but nonetheless, I jumped in and my capital stuck with me. At that point the capital wasn’t institutional. It was sophisticated, local, high-net-worth capital that had been through several cycles and saw the opportunity, but they had to be patient. What I have seen is that institutional capital has finally shown a willingness to partner with smaller developers in this portion of the world. Smaller developers can hold their head up high, because any time that the institutional capital comes in, they need to take the cue from what local, small developers have done to be successful. I point to Bishop Arts as a great example of that. I think their biggest obstacle is parking, but I think people are figuring a way around that, and that’s just one example of how a small developer tackles a problem, rather than just throwing a bunch of money at it.
MAIDEN: One of the biggest advantages is the lack of competition from other developers that are focusing on the north. I mean, you can become an expert in the region and really know where certain retail nodes and voids are and the core of the tenants that go out there. So whether it’s in Cedar Hill or Glen Oaks or The Canyon or Alexan West Dallas and other projects that we’re involved in, the greatest asset to our development is the fact that we are developing in an underserved community and there’s not as many developers vying for the same real estate.
BANCROFT: And I would add on to that, there’s no development that’s too small. The small developments bring in the larger ones. As an example of that, in the Design District, we were the first ones to go on the other side off Irving Boulevard to build apartments over there, which was a little bit of pioneering. The bowl lounge was there, and it’s relatively a small development, with Twisted Root, but we would use that to pitch the area and say, “See, we’re not the first, there are others. Residential needs restaurants, needs entertainment, and it’s all within walking distance.” So, no development is too small because larger developments will follow.
MAIDEN: And what Jack Matthews has done in the Cedars is incredible. He started with the South Side at Lamar project and now he’s changed the whole corridor.
He got a lot of criticism when he first started going down there from the established development class in Dallas. But he came in from Canada and he didn’t get why people weren’t looking south. He has shown others how it’s done.
LAKE: For me, the biggest challenge is dealing with the city of Dallas and zoning. It’s still an issue even for me, and I’ve been pulling permits for a long time. The interpretation of an ordinance depends on who’s reading it. I haven’t built a project from the ground up; I just redevelop, which I think is more expensive because it’s like Pandora’s box, you never know what you’re going to get into until you start taking it down to the bones. So when I started I used my own money and didn’t have experience dealing with banks. Since then, I’ve learned to deal with banks and use everybody else’s money and keep my cash. That was a learning experience. Oak Cliff now has just gotten way too expensive. I can go to other municipalities like Waxahachie, where we purchased 220,000 square feet of the downtown space, and Ennis, where there are beautiful old buildings.
You’ve got a lot of that whole city square in Waxahachie.
LAKE: Yes, including The Rogers Hotel. I’ve never bought a hotel in my life, but it was an experience. And now we’re 100 percent leased in Waxahachie. We’ve also acquired about 92,000 square feet in downtown Ennis to redevelop, along with The Ambassador Hotel, for which we have a different concept. We’re going smaller; we got that idea from The Rogers Hotel. We had 38 spaces and we kind of hit a roadblock leasing office and retail, so we just put in some kitchenettes and now we have people living in The Rogers Hotel, even with the small spaces. Younger people these days, they just go and take a shower and they don’t cook, they don’t have a family. So you may have a unit of 300 square feet, you put a kitchenette in there, and their playground is their city. I think that’s a concept that we’re going with at The Ambassador Hotel.
Are you seeing more competition coming in?
LAKE: Competition is good, that’s what makes this world go around. I kept quiet in Waxahachie for quite some time. It was really hard because I just didn’t want people to know, for the secret to get out. And now everything is more expensive – I wouldn’t pay what people are paying today. I guess the key to my success is like everyone else, you learn how to buy right. A lot of people underestimate me and I love it.
Let’s talk about grocery. The City of Dallas recently offered up to $3 million to get a grocery store in southern Dallas. Will this help spur development? What else can be done?
MAIDEN: From the conversations that we’ve had with some of the major grocers, I think it’s good to have that on top because that’s gravy, but at the end of the day, they want to make sure that they have viable business and that they can be successful. That’s an added incentive, but I don’t think that’s going to be the trigger. If you think about a major grocery store like a Wal-Mart or Kroger, they do like $1 million a week in sales. So $3 million is a nice incentive to have at their disposal, but I don’t think that’s going to be the only catalyst that will be needed.
OWUSU: $3 million is a drop in the bucket, not just to these retailers themselves, but we’re talking about a vast geography. It’s not just a food desert, it’s a Sahara Desert. I know money doesn’t just grow on trees, but I would challenge the city. It’s not just $3 million, it’s a lot more than that. I think there’s more demand than people realize or would think, for grocery in particular.
RADER: Since the first day I’ve been down there trying to bring development in, the first thing on their list is a grocery store, not just in the city of Dallas but in these other small towns, too. More than one is needed for through that corridor, but one step at a time, I guess.
BANCROFT: Well, I mean, I think when you talk about that kind of economic development, the term you hear a lot is “catalyst project,” right?
RADER: That’s right.
BANCROFT: So if we’re going to throw $3 million in a grocery store, you hope that it’s part of something larger than a grocery store. You hope it’s part of a larger project or that it becomes a catalyst for additional development.
JACKSON: Yeah, that’s the model that we see in our research, that it does need to be part of the mixed-use component; and consequently, that’s typically going to push you down to a smaller footprint. That’s why Cox Farms worked for us at Sylvan Thirty, at 8,000 square feet. When you start getting into the WalMart-sized footprint, it can be a challenge. You start having parking constraints and all sorts of other civil and engineering matters that will probably push you a little bit closer to the urban core. And then slowly over time, you can flesh it out to more mixed-use projects as you go further south. I do know that we’ve been approached on a couple of different sites that are within 5 miles from downtown that would in effect replicate Sylvan Thirty. Some nuances would change, but there’s clearly a demand. I want to encourage the city; their offer is respectable and definitely interesting, but I think it is going to take more than one $3 million plunge.
BANCROFT: Let’s add a zero and let’s do a larger lot of land.
What are some of the game-changers for southern Dallas that we could hope to see in the near future and what specific areas of the region should we be watching for new development?
LAKE: I would say Jefferson Street in Oak Cliff. I think Fort Worth Avenue, it’s probably the hardest planned development in Oak Cliff, besides the Oak Lawn PD, which was created to tear down and rebuild. But I think Jefferson in Oak Cliff, it’s up-and-coming and you’re going to see so many changes. Once you could have bought it at $35 a foot, now it’s going anywhere from $150 to $250 a foot.
MAIDEN: I would say there’s three areas. One would be the UNT-Dallas campus, and everything that’s happening around there. Second, Southwest Center Mall. I just think that 90 acres at Interstate 20 and 67, that’s a big donut. For the city, anything that can happen there that could spur more development would be a great catalyst. And the other is Fair Park; what’s going to happen there long-term could be a great example of transforming a city.
BANCROFT: I like the prospects for the Cedars because you have two big dictators there that can drive development and make things happen; you have Jack Mathews and you have Mark Cuban. I don’t want to pioneer and get there before they do something, but I think later this cycle or the next cycle, the prospects of it blowing up are pretty high. You also have the high-speed rail. Something big is going to happen there. It may be two years or 10 years, but it’s coming.
JACKSON: Anything that’s within a 3-mile radius of downtown Dallas is fair game. I think going north is probably one portion of the compass that is already done, but on the west, south, and east of that 3-mile radius, that’s just the way things are going to be the next 50 years. Specifically, I would agree that Cedars, Jefferson, and I would add West Dallas, which I’m obviously bullish on. It’s a clean slate, and we’ve got a lot of opportunity there. It has been an old industrial park or industrial playground for sometime and so you’ve got a lot of opportunity to be pretty creative without disrupting too many existing neighborhoods. As far as game-changers, we’ve mentioned it, but it clearly starts and ends with education. I applaud what the DISD is doing, what the city of Dallas is doing. I also believe that competition is good and, consequently the charter schools that are coming are great. What Todd Williams has done for Uplift and what the Uplift as a whole is doing is great for the southern sector.
RADER: I think the game-changer is not necessarily just within the Dallas city limits proper, but it’s going to be the multi-billion dollar development that transforms the Inland Port area. The types of companies and manufacturing that can locate there will generate a lot more economic growth for all of southern Dallas County.
TEESDALE: I agree with that. Some of the larger manufacturing deals that are floating around out there … if you land one big one down there — and hopefully, we’re close — that could be a big game-changer. Something else that could be a game-changer is the new Trinity Forest Golf Course.
Drex, you and Linda McMahon at The Real Estate Council have been working on the GrowSouth fund for the last several years and created the nonprofit Impact Dallas Capital to spur economic development. The biggest issue when you did the feasibility study was the lack of density, in terms of driving retail development. Are you all encountering that?
MAIDEN: Yes. What was discussed earlier was education and also attracting not only industrial but white-collar jobs. We need office development.
OWUSU: To piggyback on that, we’ve all talked about education to some degree, but there are three four-year universities in southern Dallas—not to mention the DCCC district and all that good stuff. But there’s a ton of opportunity for white-collar, educated people to advance themselves in southern Dallas. And again, I keep preaching that part of this is getting that story out. We at Civitas will continue to try to do that through the fund and partnership with the chamber and others. But there’s already momentum, and I think it’s really about showing people that it exists.
How do we get pioneers to start building up the momentum in areas that haven’t traditionally had redevelopment, like the Fair Park/Lancaster corridor?
JACKSON: I think you’re seeing it … it’s just that they’re under the radar. You just have to go out and explore. One of my mentors, a guy named Bill Rolley, once taught me that to be good in real estate, you have to go a different route to your destination every day. Sylvan Thirty was an example and now that whole area is changing. But people today, despite the success that Sylvan Thirty has had, still say, “Oh, my god, I didn’t see that except for when I was driving to a Cowboy game and had to exit. I didn’t know this was here.” It’s there, I just think people in certain parts of Dallas need to get outside of their comfort zone.
BANCROFT: Yeah, Rome wasn’t built in a day. You can see progress that we’re making, even in this cycle. It’s going site-by-site. It’s happening; it just may not be as evident to everyone in the city.
July 14, 2016