Tuesday, October 25, 2016

Development of Mockingbird Station land would add to DART's $7 billion property impact

The parking lot at DART's Mockingbird Station isn't full most mornings.
One of the busiest stations on DART's Dallas-area commuter rail line, the 11 acres of parking is surrounded by apartments, office buildings, shopping and a hotel.
"We've always know there would come a day when there would be a higher and better use of that property," said Gary Thomas, president of the Dallas-based public transit system.
DART's asking developers to come up with proposals to build high-density urban projects on the parking lots. DART wants to lease the land to builders who could put up anything from apartment towers to office or hotel high-rises on the property.
"There aren't many 11 acre tracts south of Northwest Highway on U.S. Highway 75 to take advantage of," Thomas said. "Mockingbird Station, I would suggest is at the northern edge of Uptown's growth right now."Development of the property between U.S. 75 and Greenville Avenue could easily produce more than $200 million in projects.
DART already has a good track record with spurring development.
The transit agency says that it's had a more than $7 billion economic impact with real estate projects built or planned within a quarter mile of its rail lines, according to a just released report.
"DART, and the projects around it, will sustain our continued growth," University of North Texas' Michael Carroll, who headed the research, said. "This very rapid increase in investment and development activity around DART stations reflects the improvement in our regional economy."
The researchers identified 11 developments in various stages near the 93-mile long commuter rail line.
The projects range from redevelopment of the more than century old Dallas High School at the Pearl Street station downtown to the $1.5 billion CityLine mixed-use development in Richardson.
More than two dozen developments were included in the totals for 2014 and 2015.
The potential for a new development at Mockingbird Station is just across the train tracks from Dallas' first transit oriented development.
Opened in 2001, the mixed-use project includes a popular cinema, restaurants, shopping and apartments.
"Now we look back and realize that Mockingbird Station is the crown jewel of transit oriented development in the system," Thomas said. "It's the grandfather of TODs in our region."
DART started looking at development options for its Mockingbird parking lots almost a decade ago.
A previous agreement with developers to build on the land never generated construction.
"We hit the downturn of the economy and the developer we was mired down with the economic challenges of the time," Thomas said. "We moved on to a second developer and they came to us with a couple of proposals.
"We really felt there was a higher potential than what we were being shown."
DART has hired commercial real estate firm Cushman & Wakefield to solicit and vet development proposals for the parking lots.
Constructing buildings on the land would require the developer replace more than 700 existing parking spots on the property. Also, the development rights would be under a long-term lease from DART.
The challenge of building parking garages and the land lease may make the project too complicated for some developers, said Bradley Miller, CEO of Dallas-based apartment builder Encore Multi-Family.
"All that to say, it is certainly a terrific location, so it will be interesting who throws their hat in the ring this time around," Miller said.
Zach Johnston with apartment builder Fairfield Residential said his firm has taken a look at the Mockingbird site. He said the property has a number of challenges.
"There will be more people likely that would look at this potential project," Johnston said. "That said, I think the added complexities encumbering this deal make it increasingly more difficult to capitalize; especially on the debt side.
"Someone is going to have to spend a lot of time working on this to bring a good project to fruition so the yield would need to be compelling enough to generate the interest."
With development land in Uptown topping $200 per square foot, builders are searching close-in locations for potential building sites.
 "There has been a very strong response already as far as interest in the opportunity," Thomas said. "We'd love to see a mixed-use facility built."
Written by Steve Brown - Dallas Morning News