Is 1401 Elm, Downtown's Largest Vacant Building, About to Be Sold? Sure Looks Like It.

Categories: Development
1401elm111.jpg
Photo by Justin Terveen
Late last week, in the comments to some item, a Friend of Unfair Park asked about if the Tower Petroleum Building had come off the market, since its web listing had disappeared. I called Colliers International's David Glasscock, who's repping that building and the mammoth 1401 Elm, which was once the tallest building in the state and closed in January 2010, and he said both were still available and that they were just retooling something having to do with ground-floor retail leasing.

But then I noticed 1401 Elm's for-sale site was gone ("1401 Elm Street is no longer available"), and I espied saw this just this afternoon: On Thursday at 8:30 a.m., there's a joint meeting of the Downtown Connection Tax Increment Financing District board, the Downtown Dallas Development Authority and the Downtown Connection TIF District Design Review Committee. And the 52-story, 1.3-million-square-foot George Dahl-designed former First National Bank building on the DART light-rail line is mentioned twice: First, the board is scheduled to review and approve $30 million in TIF funds for the redevelopment of 1401 Elm, which is the largest vacant building downtown. The board will also take a look at design plans for the property. So I know where we'll be Thursday morning.

The agenda says the former Elm Place, which was on the market for $19 million, will be redeveloped by something called 1401 Elm Street Holdings LLC -- which, according to the state's Secretary of State's website, was created July 26 by Turkish investor and developer Mukemmel "Mike" Sarimsakci, who came to San Francisco's attention last year when he began buying buildings there, including one that went for $35 million.

When I reached Glasscock earlier this afternoon he said he'd call back when he could; I also left a message for Karl Zavitkovsky, head of the Office of Economic Development. But John Crawford, president of Downtown Dallas Inc., is thrilled. Thrilled.

But, he cautions: The building's only under contract, with the final sale contingent upon the TIF board approving the $30 million. "And the payout related to the TIF would be over a very long term," Crawford says. "But I think, based on the attitude of the potential purchaser, that wouldn't make a difference."

And, of course: "I'm very excited," says Crawford, who's yet to see the redo plans. "I would be thrilled to see 141 Elm close. That's enormous. And potentially it could lead to other investment opportunities. I would be thrilled."

More tomorrow. Or Thursday, for sure.
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23 comments
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Pennywhistle
Pennywhistle

It will be very interesting to see how the potential buyer handles the fact that there are multiple fee owners of the underlying land.  Some of these are heirs of the old banking families and others are people that have bought a parcel simply to hold a developer for hostage.

Poundfoolish
Poundfoolish

Yeah, there are 9 ground leases, owned by different wealthy families. That is why at least 5 very established developers ran for the hills and doing due diligence on the multitude of land mines here. 

Yakuza_Fighter
Yakuza_Fighter

I for one, welcome our new Turkish investor overlords....errrr, landlords.

Downtown_worker
Downtown_worker

I would understand if this becomes another long-term "gut job" like LTV Tower, as long as the ground floor retail/lobby is developed and leased short term. The current lobby has space for a couple of fast-food joints, but it would be cool to see the entire thing reconfigured to house a large restaurant or retail tenant.

Mike
Mike

The problem with the lobby is it's all elevators except the retail area that fronts Akard.  All kinds of food and convenience stores have been there, with easy street access, with very little success.  Maybe the area that fronts Field that was the building's mail room/shipping point to loading docks has potential but it has an escalator limiting access.  No direct street access exists.

I'd doubt any retail steps up before the building starts filling up.  For whatever reason, people that don't work there, in spite of being next to LR station, will not buy there.

Downtown_worker
Downtown_worker

 It's also possible that nobody buys there because the shops were crap. I'm only saying that the lobby has potential, if not a big retail store (for the reasons you mentioned) then maybe a couple of fast food options not already in the tunnels.

replay
replay

These are all very good reasons why the building sits empty today.

Ed D.
Ed D.

Even I could afford to buy a $19 million building if the city gave me $30 million in TIF money first.

Lumax
Lumax

Only if you had the other $100M that its going to take to redevelop the building.  Remember the developer will not see any of this TIF money (or very little of it) until the property has long been redeveloped.  An investment from the city to get this property back on the tax rolls at the value at which it belongs.

DevMan
DevMan

Right on Lumax, something is missing. The numbers do not work, must be another gut job like the Trevino 1600 deal. 

replay
replay

It may take him until 2015 to get control of all the land leases. By that time, he should be able to qualify for the historic investment tax credits.

LakeWWWooder
LakeWWWooder

If I'm not mistaken it was well under construction by the assassination in '63

LakeWWWooder
LakeWWWooder

By the time they get all this worked out it may very well be 50 years old. When was it built, 1964 or  '65?

Whodunnit
Whodunnit

You mean.....like George washington slept there? Yeah, I don't think that'll work........

DevMan
DevMan

Wow, I wish him luck on the allowance, because they are very very specific. 

ES
ES

Allowances can be made for building of particular historic and/or architectural significance even if they are not 50 years old.

YouCantHandleTheTruth
YouCantHandleTheTruth

Has anyone figured out that the building is not 50 years old, which is the threshold age a structure has to meet, before qualifying for Historical Tax Credits? Based on that Fact, 22 million just got flushed down the toilet. I guess this "developer" can just write a check out of his personal checking account to make up for the 22 million - no problem. Unless I am missing something, the Deal is already Dead. 

DeveloperX
DeveloperX

I can tell you this... you NEVER get TIF money first... They will only reimburse you for land improvements... and it takes a long time to get your money back...

Whodunnit
Whodunnit

......unless your name is Forest City and you're redeveloping the Mercantile Complex.

Downtown_worker
Downtown_worker

Wow. I would love to see the vertical pin stripes re-lit on tha building. My window at the Kurby would have an awesome view of it.

replay
replay

.......you'd better sign a very "long-term lease" on your apartment.

Downtown_worker
Downtown_worker

Yep, I know I will be long-gone before this building reopens as apartments, but I was hoping the new owners would just flip the switch and turn the lights on at night.

replay
replay

That's probably not included in the $136 Million budget.......

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