Three downtown Dallas buildings have defined the city through the eras: Neiman Marcus, Dallas City Hall and American Airlines Arena.
Now all three are in question as city leaders strive to reshape downtown to fit the city’s image as a growing metropolis and financial center.
Downtown Dallas’ sustained problems with vagrancy and crime, along with outdated office-building inventory, are among the turning points pushing the central business district to Uptown.
The crumpled status of the original Neiman Marcus store on Commerce Street hurts, and AT&T’s impending departure from downtown would be a brutal blow and a signal that those problems are beyond urgent. The telecom giant spent $100 million just seven years ago to develop a four-block headquarters campus that included the AT&T Discovery District with a food hall and public plaza. Now it is searching for office space in the suburbs, potentially taking the Dallas-based company’s post-pandemic return-to-office spending out of the city.
Meanwhile, the city’s play to keep the NBA’s Dallas Mavericks arena in downtown could come with the demolition of the I.M. Pei-designed Dallas City Hall. The city spent $100 million in 1978, overrunning its budget by $40 million, on a brutalist building that is meant to withstand the Texas sun and weather. More than that, it was meant to present Dallas to the world as a serious modern city after the JFK assassination dubbed it the “city of hate.”
Purchasing or leasing an office building could be in the cards for Dallas’ next City Hall if Mavs owners Miriam Adelson and Patrick Dumont get a deal they like.
City leaders could be up against a wall there, as no one wants to be remembered for losing Dallas’ last pro sports teams to the suburbs. Yet that scene could be set if Stars owner Tom Gagliardi exits American Airlines Center in favor of Plano and the Mavs decide to develop an arena in Irving.
AAC cost $420 million to build with major backing from city bond financing in 1996.
All of that is playing out against a backdrop of ambitious visions for downtown by real estate power players anxious to keep the city’s center on pace with the new sheen of Y’All Street that’s coming with a slew of major financial industry moves in Uptown.
The city’s $3 billion-plus convention center redevelopment and Hunt Realty’s $5 billion Reunion Tower-area megaproject, slated for thousands of apartment units, aim to turn the Union Station area into a happening neighborhood.
Ray Washburne’s plans for the former Greyhound Station at 205 South Lamar Street, and Mike Ablon and Mike Hoque’s proposal for Bank of America Plaza, at 901 Main Street, are also in the air lately.
All of the grand planning could be undone by crime hotspots, which isn’t the only point of tension when it comes to downtown dreaming. There’s also the question of what Dallas is willing to offer Saks Global and AT&T and the Mavericks and the Stars to retain key points of the city’s identity.
Downtown Dallas doldrums
If you doubt downtown has challenges, consider that nothing says hard times like a property auction.
And Harwood Center, a half-empty office building at 1999 Bryan Street in downtown Dallas, is up for sale through online auction platform Marketplace.
Seller CW Capital took over the 36-story asset from Fortis Property Group after a winning foreclosure-auction bid of $80 million in 2021. Fortis bought the property in 2006 and spent $10 million on renovations in 2011, according to Morningstar Credit.
Distressed CRE debt
Big D and its downtown aren’t alone–the amount of commercial property headed to foreclosure auction in Texas this week dipped to $575 million this week, despite broader concerns of a coming multifamily debt meltdown.
Preston-Royal highrises
It’s not all downbeat.
Local developers Burk Interests and Greenway Investment Company have a plan to redevelop 7 acres at the southwest corner of Preston Road and Royal Lane in Dallas, across from Central Market, with two high-rises. They are seeking a zoning change to develop office, retail, condos and a hotel across buildings rising 24 and 28 stories in Preston Hollow, where Burk Interests’ Leland Burk has run for City Council in the past.
Personal guarantees gone wrong
John Venetos is feeling the pain after personally guaranteeing $394 million in debt for his Dallas-based multifamily syndication firm Lurin Capital. Lender Acore Capital sued him for $80.7 million of that debt recently, after foreclosing on a dozen of Lurin’s Florida assets earlier this year.
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