Monday, January 18, 2010

Downtown Dallas' landmark Elm Place tower shutting its doors

One of downtown Dallas’ office skyscrapers is closing its doors.

The 52-story Elm Place tower at 1401 Elm Street has been a landmark in the central business district for more than 40 years

But low occupancy in the building and a foreclosure on part of the project have prompted the owners to shut down the property.

“We’ve tried our best, but there’s nothing else we can do,” Guerrino Savio, who represents the owners, said Friday. “Most of the tenants have left or are in the process of leaving.”

Savio said occupancy in the office tower had fallen to about 20 percent last year and has recently gone even lower.

“It got to the point it was impossible to keep operating,” he said. “For every dollar in rent we receive you have to spend five dollars in expenses.”

The owners have spent more than $12 million in recent years making up the deficit between the rental income and operating expenses.

The million-square-foot dark gray glass and white stone tower at Elm and Akard streets will now be the largest empty building in downtown Dallas.

Built in 1964, it originally housed the offices of First National Bank and other prominent office tenants.

“The building in those days was one of the buildings to be in in Dallas - it was an icon,” Savio said.

Bank of America had a large operation in the building until it was relocated last year. The lower nine floors of the building – under separate ownership – were foreclosed on in early 2009.

With most of the tower now sitting empty, the remaining tenants are packing up.

“The building is going to be shut down, and it’s a shame,” said John Taylor, who has his family insurance business on the 34th floor. “I was the first one to move into the building, and I will be one of the last to leave.”

Taylor is relocating his offices up the street to the Adolphus Tower – the same place he was located before moving to 1401 Elm 46 years ago.

“I’m a downtown person,” Taylor said.

When Elm Place opened, it was the tallest U.S. building west of the Mississippi.

Designed by architects George Dahl and Thomas Stanley, it’s still one of the biggest on Dallas' skyline.

But with competition from newer buildings downtown, in Uptown and in the suburbs, the oldest offices in the central business district are at a disadvantage.

At the end of 2009, almost 30 percent of downtown Dallas’ office space was empty – much of it in older buildings like Elm Place.

“This building in any other city would be worth a lot of money, but in Dallas it’s a liability,” Savio said. “We will still have the real estate taxes to pay, ground leases and security costs - even if it’s closed.”