Tuesday, June 21, 2005

Downtown Dallas Real Estate News

Downtown Dallas Real Estate News

State of the Union Tower
Complex's empty offices are about to become homes, shops

DALLAS (DallasNews.com) - It's been empty as long as the Mercantile National Bank building and has about as much office space. But for years, the huge Union Tower Complex on Thanks-Giving Square has been pretty much ignored.

That won't be the case for long. Starting this summer, the derelict skyscraper is getting a $106 million residential makeover.

"We're going to create a big neighborhood over here," said developer Ted Hamilton, who also converted downtown Dallas' Davis Building and the Dallas Power & Light complex into housing. "This is a humongous building. It has more than a million square feet of space."

CHERYL DIAZ MEYER/DMN
Father and son Larry (right) and Ted Hamilton plan to convert the complex into apartments, stores and parking. The former office building will house 432 apartments, 19,000 square feet of ground-floor retail and 737 parking spaces.

But first, the developers have to clear out acres of abandoned furniture and office equipment and demolish the interior of the 32-story tower at Akard and Bryan streets.

"We think the whole project will take around 18 months," Mr. Hamilton said.

The building will be called the Mosaic, a reference to the millions of blue green ceramic tiles on the exterior.

"We went through a lot of names," Mr. Hamilton said. "This building didn't have a strong identity like the Davis Building or DP&L."

Once it did.

From offices to empty

When the 32-story Mayflower Building opened in 1960, it was one of the tallest buildings in Dallas. Built in a partnership with Fidelity Union Life Insurance Co., the brick glass and tile tower joined the 21-story Fidelity Union building that went up in 1952. Both structures were designed by Dallas architect Hedrick C. Wyatt.

Dallas went through an office building boom between 1950 and 1960. More than 60 office buildings went up, and only New York added more office space during that time.

But by the early 1990s, Dallas' midcentury buildings were mostly out of fashion.

The Union Tower Complex has been mostly empty since 1992, when Fidelity Union Life Insurance was acquired by a Minneapolis firm. Weak demand for downtown office space and environmental problems with the building contributed to the lack of interest.

New demand for living space in Dallas' core is driving the building's renaissance, and Hamilton Properties bought the complex last year.

Meriman Associates is the architect on the redevelopment, and Andres Construction has been hired as general contractor.

Mr. Hamilton estimates that the apartments will average more than 1,100 square feet and start at around $900 a month.

Amenities

Other features planned for the building include a pool and recreation area on top of the north side parking garage and a dog park on the 21st floor.

The developers plan to preserve some of the historic lobby areas of the building as well as an executive apartment that's still furnished in 1960s swank.

"We call it the Ricky Ricardo apartment," Mr. Hamilton said.

Unlike the historic Davis Building, which opened 2003 – and the DP&L buildings, which opened Thursday – the Union Tower Complex will get a more modern style makeover. The developers have also gotten tentative approval to cut new windows in one side of the building that faces Thanks-Giving Square.

"Reportedly this was the biggest office building in Texas when it was completed," said Larry Hamilton, Ted Hamilton's father, who founded Hamilton Properties in Denver. "The project is a good link between the historic districts downtown and the Arts District."

Hamilton Properties is receiving about $9 million in public incentives for the project.

'New frontier'

Most of the downtown apartments built recently have been in the area from Elm Street south. That's starting to change.

Redevelopment is also scheduled to begin this summer on the Republic Bank Building, another building that faces Thanks-Giving Square. Gables Residential Trust is doing the Republic project.

"We have focused our attention on the revival of Main Street while other areas of downtown are equally important," said Dallas City Council member Veletta Forsythe Lill. "We are thrilled the Hamilton family has decide to seek this new frontier.

"That area has good pedestrian access and mass transit," she said.

The Dallas Area Rapid Transit light rail line runs right in front of the Union Tower Complex.

More than 2,500 additional apartments are under construction or planned in the central business district.

The downtown rental projects have been attracting a broader base of tenants, said industry analyst Mike Puls, who said he isn't worried yet about an oversupply.

"There are a substantial number of people leaving the suburbs looking for more fun" in terms of where they rent, Mr. Puls said.

"The downtown market still has potential, and there are fewer new apartment deals that can go to Uptown because the land prices are so high."