Monday, February 20, 2012

Finally, some good news about Victory Park

News this week that development is about to restart in Dallas’ Victory Park project may have been a surprise to some folks.
Most of the reports about the development have been bad of late.
Just last week, lenders foreclosed on one of its biggest buildings.
So truly, it is about time for Victory to catch a break.
For more than a decade the ambitious project has gone from boom to bust, from controversy to celebration.
One thing hasn’t changed along the way — the 75-acre development’s strategic location on the northwest corner of downtown Dallas.
That’s why there will soon be construction cranes rising again over Victory Park.
But what’s going to be built won’t be more of the same.
Instead of expensive condos that have gone begging or more high-priced retail space, Victory’s developers are going to add a new office tower and midrise apartments.
Demand for this new space will boost Victory’s population — something that must happen if the project is going to be what was once envisioned.
Victory has a storied past.
The project started out with a political battle over building the American Airlines Center sports arena and the surrounding mixed-use complex. Voters finally approved the project after a virulent public campaign.
Actually, that part of the project turned out even better than planned. The city of Dallas paid off 17 years ahead of schedule the $140 million in bonds used to build the arena and infrastructure.
After the arena was under way, it still took a while to get the rest of the project going.
The New York firm originally hired to build Victory pulled out of the deal in 2003 after almost four years of planning.
Victory’s owners — developer Hillwood and companies affiliated with the arena’s sports teams — then went back to the drawing board to come up with a new scheme.
What they picked was set by the tone of the times.
The high-end condos and shops that went up at Victory did OK until the recession hit and the economic downturn let all the air out of the deal. It wasn’t long before Victory’s storefronts were going dark.
Last week lenders foreclosed on the 28-story, mostly unsold House condo tower.
The German bank that now owns the luxury high-rise has marked it down from almost $80 million in debt to about $32.5 million.
In 2009, German investors who had invested more than $185 million took control of the buildings and some of the land at Victory.
Since then, the office buildings and apartments at Victory have filled up.
The more than 600,000 square feet of existing office space in Victory is 95 percent leased. And the two current apartment buildings — Vista and Cirque — are 98 percent occupied.
No wonder Victory’s owner has decided to go with more offices and apartments.
But most important in this week’s construction announcements at Victory is the proof that the German owners are going to stick with the deal for a while. It would have been easy for them to just liquidate Victory for cents on the dollar and turn their backs on the whole project.
“We are committed to making Victory Park become the icon for Dallas it was supposed to be,” said Lance Fair, vice president of Victory Park and chief operating officer of Estein & Associates, the company that represents the German owners. “We are long-term investors, and that’s our approach with Victory.”