|Maxwell Drever, chairman of Drever Capital Management in Dallas.|
Monday, August 22, 2016
Why is Maxwell Drever spending $240M to save an iconic Dallas skyscraper?
Maxwell Drever likes to garden.
The California real estate investor doesn't mind getting a little dirt under his fingernails to make something bloom.
"I'm a master gardener — I love taking gardens and making them really spectacular," Drever said. "I love restoring gardens.
"And I love restoring buildings, too."
In downtown Dallas, he's cultivating one of his largest projects ever, turning an empty 52-story skyscraper into a city in itself.
Drever and his firm will spend almost two years converting the half-century-old former First National Bank tower into a combination of apartments, retail, hotel rooms and parking. The developers recently released updated plans for the more than $240 million project plus a new name for the tower: The Drever.
Drever Capital Management bought the marble and glass high-rise out of bankruptcy earlier this year.
"We get calls when properties are in trouble because that's kind of my reputation," said Drever, 75, who travels around the country looking at deals. "We heard it was in foreclosure, and it was an opportunity."
Drever said he had previously passed on investing in the project but took another look after the previous owners couldn't get funding to proceed.
"We were able to get favorable pricing and tax credits — that was not on the table before," he said. "Unless you have those tax credits, this deal will not work."
To obtain millions of dollars in historic tax credits, Drever and local partner Bryan Dorsey have made the development more of a restoration, retaining original features of the tower's exterior.
"This building is such a classic," Drever said. "The marble is from the plains of Marathon, Greece.
"You could never reproduce it," he said. "I used to do property closings in this building back in the 1970s."
Built in 1965, the 1.3 million-square-foot skyscraper was once the tallest west of the Mississippi River. It was designed by Dallas architect Thomas Stanley, who worked with famed designer George Dahl's firm.
The tower has had some legendary tenants over the years. Oilman H.L. Hunt used to have his offices there, as did members of the Murchison family.
Over the years, Drever and his companies have owned or built more than 170,000 apartments all over the country.
After the real estate downturn in the 1980s, he was one of the biggest buyers of distressed property in the nation.
"In 1988, we started buying big time after the crash, a lot of it in Texas and Dallas," Drever said. "We bought a lot of buildings before people woke up" — almost 18,000 apartments by the time he was done. "Dallas has always been like a second home to me."
While he's working on the downtown project, Drever and his family are spending a lot more time here. Son Noah, 32, and daughter Isabelle, 29, are working on the project, too, along with other North Texas deals.
"My son didn't want to come to Dallas," Drever said. "He stayed here two years, and we had to pry him out of here."
Drever Capital Management just teamed up with a local developer, The Alder Group, to build a 243-unit seniors apartment community in Allen.
"We want to do more of those seniors projects," Drever said.
The company also owns a loft apartment building in Dallas' Deep Ellum district.
The downtown project is its top priority, of course. It's one of the biggest skyscraper redevelopments in the country and the largest in Dallas.
And handling 1.5 million square feet of space "didn't bother me a bit," Drever said. "All you do is add zeros.
"We've been in this business for 50 years," he said. "I had no problem going forward on this, especially in the Dallas market."
Turning the lights back on in the vacant tower at 1401 Elm St. has been a longtime goal of downtown Dallas leaders.
The city pledged almost $50 million in economic incentives to make the project happen.
Karl Zavitkovsky, director of Dallas' office of economic development, said the city is encouraged by Drever's plans.
"When I heard Maxwell Drever was interested during the bankruptcy, I was happy because I had good experiences with him," Zavitkovsky said. "I know he and his investment fund were responsible and had deep pockets.
"He does think unconventionally but has the capacity to get things done."
Zavitkovsky said when he was a banker in the 1980s, he had firsthand experience with Drever's operations.
"He was the largest apartment owner in Houston at one time," Zavitkovsky said. "We all recognize that this is a difficult project but important for downtown Dallas.
"We're doing everything we can to be supportive."
The former First National Bank headquarters is one of the few vacant towers left in the central business district.
"We'd like to buy more, but there isn't that much more priced like we'd like," Drever said. "There aren't a lot of cities that have a downtown 50-story building like this."
Written by Steve Brown/Dallas Morning News