Despite the recessionary chill over most big mixed-use and retail centers that developers planned for the Dallas area, three major properties will open phases this year: Park Lane across from NorthPark Center and the joint Village at Allen and Village at Fairview properties about 30 miles north of downtown Dallas.
“We’ll see about 3 million square feet of new space in Dallas this year,” said Herbert Weitzman, chairman and chief executive officer of The Weitzman Group and Cencor Realty Services. “Most of this is in projects already under way, such as Park Lane and the Village at Fairview. These projects all have strong anchors and are in areas of good residential density, so they should do fine.”
Projects on hold that never broke ground include Village 121, a mixed-use center in Plano; the Shops at Mercer Crossing designer outlets in Farmers Branch; Prime Outlets in Grand Prairie; the retail component of Vitruvian Park in Addison, and Midtown, a $1 billion mixed-use complex near Galleria Dallas, the developers reported.
Plans have stalled to erect a mixed-use center in place of the landmark Texas Stadium, and the city of Irving has leased the 77-acre site to the Texas Department of Transportation to stage roadway construction, with the option to relocate the DOT should a development opportunity arise.
“There is no financing for new projects,” said Barry Rosenberg, president of Steiner + Associates, which last spring backed out of co-developing the massive GloryPark complex in Arlington. “We’ve stopped all of them, and we don’t think any of those types of projects will start up for another two years. The general thought is that tenants will be looking to expand in the fourth quarter of ’10. Relocations are a different story. Specialty retailers want to be part of projects that are regionally dominant. Most of the [relocation] deals we are doing are for 2010.”
Lincoln Property Co. is waiting to see which retailers survive before turning a shovel for Village 121, an 80-acre mixed-use complex in Plano, said Robert Dozier, executive vice president. “We own the land. It’s just that we’re going to wait for the right time.”
“We don’t anticipate any activity toward development for at least 12 months,” said Marc Sullivan, senior vice president at Icon Partners, the company behind Midtown and the Shops at Mercer Crossing. “Retailers aren’t in the market, and now is not a great time to be making deals with anybody. It’s best to let those things sit and see how things shake out.”
Bob Brvenik, president of Prime Retail, has also delayed building. “We have three announced new developments and a number of others in our pipeline, and, like everyone else, we extended them until we see what’s happening in the economy,” he said. “Originally we looked at a fall ’09 opening for Grand Prairie. Realistically, it’s a late ’10 opening.”
The Grand Prairie outlets are 50 percent leased, with tenants including Last Call, Off 5th, BCBG, Cole Haan and Dooney & Burke. In general, the pool of potential tenants is growing, Brvenik pointed out.
The Gates of Prosper, a 2.8-million-square-foot lifestyle center, won’t begin construction until city and county agencies widen Preston Road between Frisco and Prosper, said Dena Compton Devoto, director of sales and marketing for Blue Star Land LP. Dallas Cowboys owner Jerry Jones and his children own and manage Blue Star.
“We anticipate breaking ground in 2011 or ’12,” Devoto said. “We are aggressively taking letters of intent. Everyone is taking a wait-and-see [attitude].”
North Texas is in recession, but it’s not as bad as most other places in the U.S., said Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas. “This is not going to be a happy year,” he noted. “We will continue to see job losses throughout much of this year. When the national economy rebounds, I am confident that Texas, and particularly the Dallas-Fort Worth area, will once again grow much faster than the national norm. What’s more, just as we saw after the recessions of the early Eighties and Nineties, we will see a new surge of people and business into North Texas.”
Meanwhile, unemployment has been rising, reaching 5.8 percent in the Dallas metro area in December and 6 percent statewide as the national rate hit 7.2 percent, according to the Texas Workforce Commission.
Still, retailers are setting up shop in the fast-growing exurb of Allen, where the area’s largest mixed-use project is under construction. The Village at Allen and adjacent Village at Fairview comprise 3 million square feet of space, including 2 million square feet of retail that is 66 percent leased, said Gar Herring, president of MJ Herring Group.
Super Target, Petsmart and smaller stores will open Sunday at the Village at Allen, where TJ Maxx, Dick’s Sporting Goods and four other big-box tenants opened last October. A Marriott Hotel and the Allen Event Center are slated for completion by fall.
Across Stacy Road, the first phase of the Village at Fairview will open Aug. 5 with Macy’s and J.C. Penney. Dillard’s broke ground in January.
Park Lane, a $750 million mixed-use development with 650,000 square feet of retail facing NorthPark Center, plans to open Nordstrom Rack, a flagship Children’s Place, Lane Bryant, Cacique and Dick’s Sporting Goods by early April. October openings are on tap for a flagship Whole Foods, Ulta cosmetics, Sports Club/LA and Splitsville, an upscale bowling venue.
The center’s retail space is 70 to 75 percent leased, said Michelle Davis, director of marketing at developer Harvest Partners. A planned boutique hotel, however, was delayed due to tight credit.
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