Anxious to Develop Area 'Round Main Street Garden, Dallas Cuts Forest City a Good Deal

By Robert Wilonsky Tue., Sep. 22 2009 at 8:20 AM

Categories: News

Little-known fact: In 1964, the second floor of the Continental Building was the HQ for the FBI's Dallas operations. You can look it up.

We mentioned this a month ago (and well before that): Forest City's plans to redevelop the 300,000-square foot Continental Building on Commerce Street have stalled, so the city has made considerable concessions to get it back on track in order to "maintain Downtown momentum" and "strengthen redevelopment efforts surrounding Main Street Garden Park," per this afternoon's briefing presented to the city council's Economic Development Committee. The new deal substantially alters the original, which was part of the Mercantile redo for which former Mayor Laura Miller fought in '05 after it has initially tanked at City Hall.

The originally plan called for 140-160 condos, 9,000 square feet of retail, 350 parking spaces -- and capped tax increment financing, out of the Downtown Connection TIF District, at $10 million. The new deal for the project, guesstimated to cost $57.1 million, dramatically alters the plan: Forest City will have to build no fewer than 180 residential units (20 percent of which will have to provide affordable housing), but it has also reduced the retail footprint to 5,000 square feet and the number of parking spaces to 250 ("to correct a typographical error in the original agreement," hunh). And, most notably, the new agreement will "increase the aggregate limit on City funding from $10,000,000 to $22,528,288." To get the dough, Forest City, among other things, has to be moved in by December 31, 2011, and get half the retail leased.

As Karl Zavitkovsky, head of Economic Development, told Unfair Park last month, this property is prime; no way the city lets it lie fallow forever. As it he put it: "That whole area there is a top priority for us getting it redeveloped. You've got the Merc, Neimans, the [Main Street Garden] park, the UNT law school and, of course, the Grand Hotel needs to get help. ... The thought is, if you're able to impact an area significantly, it's going to have some positive effects in surrounding areas. We're doing everything we can to focus scarce resources to help that part of downtown."

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Justification. That's the bottom line. Are the potential benefits sufficient to justify the financial expenditure? Because I don't have all the details on the deal and am not a construction specialist, I can only argue a qualified* yes. [*We (the citizens) rely on our govt representatives to do their job of getting the best deal for us and we rely on the media to keep them accountable.] Companies exist only as long as they are profitable. Like most old property redevelopment sites, rehabbing the Continental without government subsidies would likely not be sufficiently profitable to justify the risk. It is always cheaper to tear down the old and put up something new and shiny. But, as Americans are so often oblivious to--especially in the Southwest--this isn't just about the money. This is also about quality of life--aesthetics, architecture, history, character of the city, etc. The Continental has the potential to become an iconic building--something that we'll look back on in another 30 or 40 years and be very glad we preserved. Architectual styles run in cycles. When initially built, structures are beautiful and cutting edge. After 25-30 years, the more stylized a structure is, the more "dated" it becomes--often considered old and tired by the general population. However, if a structure can survive the wrecking ball, once it reaches approximately 50-60 years of age it achieves "retro" status and becomes hip once again. Given that it is impossible to construct a new building that has "history," buildings like the Continental are literally irreplaceable. Additionally, private developers are far more likely to risk their own dollars in a part of town that they perceive to have forward momentum. Projects like this, that can only be done with govt. support, help get that momentum moving in the right direction. I readily acknowledge that some projects are too expensive, but the money being allocated for this is in line with its expected impact on the city. Is the cost justifiable? Only time will tell for sure. But we'll only find out if we try. If we try and fail, what have we really lost? Some money? A lot of money? So what? Money can be replaced. If we do nothing, we know that the downtown will suffer. And we lose the time that could have been spent taking action. But if we try and succeed, not only will we be able to to enjoy the fruits of our efforts, we will also leave a legacy of commitment and accomplishment to inspire those that follow.
The Council�s Economic Development committee unanimously approved the revised deal about an hour ago. From a DOWNTOWNDALLAS perspective, we're thrilled to see another residential project moving forward, particularly in today's challenging market. And with an affordable housing component, the project is even more critical as we strive to grow and diversify the Downtown housing mix. In terms of the retail ratio, we are the first to advocate for dedicating an entire ground floor - activating streetlife is one of the most critical elements in revitalization. But so is maintaining historic integrity and authenticity, so this is a nice marriage.
@If U Seek Amy... If you live downtown within that TIF then yeah, your money is going to the project. Otherwise, you don't get it and I don't expect you to learn either. Reducing the retail here is probably a good thing; retail can't be sustained at every street-level location downtown, and with plenty of retail space in the Merc to lease up over the next year or so, this will make the project more viable.
"The new deal for the project has reduced the retail footprint to 5,000 square feet" "To get the dough, Forest City, among other things, has to be moved in by December 31, 2011, and get half the retail leased." Let's see.. @ $20/sf rent, Forest City can fund a b.s. lease of $25,000 per year to get $22 million??? Where do I sign up? Who does this kind of window dressing really fool? City staff... city council... the Mayor?
So long, Schumacher. Once we get all you belly-aching whiners out of here, Big D will be ready to move forward.
Schumacher - go ahead! If that is your attitude, please, be our guest and move to the Bubble. They will only spend your taxes on new police tahoes every year, red light cameras at every intersection, and those fancy-ass street name signs that are lit from the inside. Those are TOTALLY awesome ways to spend tax dollars. For me, I'm thinking spending tax money on a revitalized city center that is that much more attractive to the next generation of leaders and corporate offices is fine by me...
Bye bye, Richard Schumacher. Don't let the door hit you in the ass on your way out. And once you are gone, we don't want to see you in any of our parks, theatres, concert halls, or museums (none of which you apparently want to pay for). And stay away from the State Fair of Texas, too. That's on Dallas city park land. Go out to Arlington, to play in JerryWorld. I am sure that he will be glad to collect your fair share from you.
Time to move to the Park Cities. Then I can enjoy all the benefits without having my property taxes wasted on crap like this.
What's wrong with socialism for the rich and capitalism for the middle class? After all, it's the Dallas way.
This is a democracy, and the majority of us voted for a city council and mayor who promised to revitalize downtown. This is part of that process. If you don't like what's going on, get your anti-downtown candidate (whoever that is) elected next time.
Quit givin' those fat bastards our money!
Yes, it's 180. Typos indeed. Corrected. Thanks.
What is that odor I smell? Lots of short term, zero-rent until December 2011 leases being written - close your eyes and seal the deal. I believe Wick called it the IDCIWBH (I Don't Care I Won't Be Here) card. You can make the numbers by dumbing down the requirements. And that's what this whole deal stinks of, dumbing down the requirements for the first $10 million so they can get more $. Mr. Zavitkovsky and the council should remember that that $22 million is coming from businesses and residents who are paying their taxes currently and who are directly suffering from this depressed economy. Especially when it seems like their tax dollars can't be spent in their home neighborhoods, only on enticing more people to the areas they decide.
Speaking of "correcting typographcial errors," where are you getting 80 units? I see 180 in the presentation, with 20% (40) units in the affordable housing program. Is that an error, or do you see something I don't? 180 seems more likely considering the size of the building. Agree this is an area of downtown that deserves funds. We have already invested so much in the area on Main that I say we continue to focus on protecting and developing that investment.