- Developers at Bisnow’s DFW Adaptive Reuse Summit said a property’s unique story often determines whether financiers will back a redevelopment project.
- Proxy Property and Merriman Anderson pointed to historic tax credits, opportunity-zone incentives and TIF financing behind projects like The National, The Statler and The Sinclair.
- Rising land prices and growing demand for hotel keys are pushing more DFW cities toward mixed-use adaptive reuse instead of single-use redevelopment.
A property’s backstory can matter as much as its balance sheet when pulling off a redevelopment in Dallas-Fort Worth, developers said at Bisnow’s Adaptive Reuse Summit on Aug. 11 in Addison.
Panelists including Proxy Property founder AJ Ramler and Cawley Partners’ Brian Straley said financiers need to see a project’s unique architecture or history before they’ll back it, especially as land prices climb across the region.
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Finding the Right Capital Stack
“Most adaptive reuse projects, the developer is seeing something that other people are not,” Ramler said. He added that finding the right capital stack often determines success. Proxy Property focuses on historic and underused properties in Dallas’ Oak Cliff area. The firm recently completed a project using opportunity-zone status, tax-increment financing and the state’s commercial property assessed clean energy program. “Especially on a project that’s either speculative or more complex, having enough cushion on all the numbers is really important,” he said.
The Details
Buildings more than 50 years old can qualify for historic tax credits. Merriman Anderson Architects has used the credits on The National and The Statler in Dallas and The Sinclair in Fort Worth. Developers converted all three into upscale or luxury hotels. The strategy has become popular across DFW as Dallas and Fort Worth pursue major convention center overhauls.
Dallas is spending $3.7 billion to expand the Kay Bailey Hutchison Convention Center. Fort Worth began a $606 million second phase of its convention center expansion earlier this year.
Zooming Out
DFW’s preference for mixed-use redevelopment reflects a broader national shift. Office conversions are accelerating across the country as office values decline.
But many DFW cities have grown wary of single-use adaptive reuse projects. Cawley Partners’ Straley said cities have pushed back on projects limited to industrial, data center or multifamily uses. Instead, they are favoring more blended formats.
Why It Matters
Cawley Partners is one of the developers behind the Dallas Stars’ planned $3 billion sports and entertainment district in Plano. The 90-acre site was formerly home to the Shops at Willow Bend mall. The project will include two hotels, up to 2 million square feet of office space, nearly 1,000 residential units and more than 200,000 square feet of retail.
It’s the kind of large-scale transformation that adaptive reuse advocates have long urged cities to embrace instead of demolishing existing buildings. “Land prices have risen so much that it’s really hard to underwrite,” Straley said of the high-end development many DFW cities now favor.
What’s Next
Straley expects more adaptive reuse projects to move forward this fall as demand outpaces available land. He pointed to Plano’s reversal on the former JCPenney campus as evidence of changing attitudes.
The city’s planning commission rejected anything but office use for the site in 2019. This summer, StreetLight Residential announced plans to turn the 100-acre campus into a luxury multifamily development.
“Plano is more pro-business than they’ve been in the 30 years I’ve been in Dallas-Fort Worth,” Straley said.
