Crumbling Behind the Pink Wall: Neighborhood Resistance May be Killing $20 Million Redevelopment of Imperial House

Has the political climate of re-development resistance in Preston Hollow killed off any chances of re-developing Imperial House?

We have written a lot about the quirky high density community called Behind The Pink Wall, a corner of Preston Hollow Gold Coast at the north-east intersection of Northwest Highway and Preston Road. We have told you how the area was named — by Ebby Halliday herself, legend has it, who once lived there in the uber cool Jaguar Apartments that still exist. Talk about mid century modern, the units are older, but graceful, apartments turned into condos, many with with kidney shaped pools housing retirees, divorcees and widows. There are two high rises ( the Athena and Preston Towers), a couple of mid-rises and several condo complexes from the 1950s and 60′s. It was Hal Anderson, the area’s biggest developer, who in 1954 built his first apartment project on the north side of Northwest Highway and put a section of curvy pink-bricked wall out front. Residents in the rental units would say, we live at Preston and Northwest Highway, “behind the pink wall”, probably to indicate which corner. It had a catch to it. You know what happens when one successful development goes up: others follow. Hal Anderson developed the high-rise Athena and Preston Tower apartments in the 1960s, creating some of the first upscale living for North Dallas.

Let us not forget that Steve Wolens, husband of former Mayor Laura Miller, owns a unit at The Athena.

“It was a very big deal and very prestigious,” Mary Frances Burleson, CEO of Ebby Halliday Realtors, Dallas’ largest residential sales firm told someone, probably Steve Brown. “It was very glamorous to live there.

This is the neighborhood Gennifer Flowers, the first paramour of former President Bill Clinton to go public, lived in during the mid 1990′s, in a place on Bandera.

We’ve covered and covered Transwestern’s attempt starting early this year to buy 12 1950’s vintage townhomes at the entrance to The Pink Wall, off Preston Road, and 24 rental units in an apartment complex on the very corner of Northwest Highway and Preston. More on the latest Transwestern rumblings in another post.

What we haven’t told you is that, during the last year, some owners of Imperial House, the elegant, imposing white brick complex with long awnings designed by internationally known Dallas architect George Dahl, have been moving forward with developers to explore a $20 million sale.

Dahl, widely known for designing the buildings for the 1936 Texas Centennial at Fair Park, and his firm were the architects and contractors for the East building of the Imperial House that was built in 1962.  The two-story luxury multi family homes face Averill Way and back up to Northwest Highway. For several months, a group of condo owners have been actively seeking a commercial buyer, to acquire the property, tear down the aging dowager units and build gleaming new multi-family luxury something or others.

Last July, real estate expert Peter Livingston first began a conversation with the owners of the Imperial House condominiums about the possibility of a group sale to a developer. The Imperial House sits on key piece of property, just west of the Preston Tower on Northwest Highway.  Livingston, having brokered several individual units at the Imperial House, determined there was resistance from the ownership to invest in updating.

Livingston says he went to the President of the Imperial House HOA and asked if he thought the ownership would have an interest in selling as a whole. After receiving a positive response, Livingston was encouraged to share his thoughts with the owners and spoke at three HOA board meetings as well as the Annual meeting in October. In addition to the meetings, Livingston began a communication with the owners in person, through email and letters. By year-end 2013, one owner asked Mr. Livingston to cease and desist his effort. An additional three owners communicated they were not interested in selling, a few never communicated back. But a majority signaled they would be interested.

Soon after Livingston went to work on the Imperial House opportunity, the Town House Row owners came together and listed their property for sale. In October, the Transwestern Company added an adjacent site and contracted for a total of 3.5 acres less than 300 feet from the west boundary of the Imperial House.

Over the months, Livingston teamed up with an attorney, an architect and planning expert to look at not only at the Imperial House site, but those sites adjacent to it. Feeling positive about the opportunity, Livingston called on and met with multiple “big name developers” and presented the possible sales scenario with positive results. In late December, 2013, Livingston presented to the owners of the Imperial House, letters of intent from Crow Residential and Lincoln Properties. The offers represented one of, if not the highest price ever to be paid for Dallas multifamily land. Both of the offers were contingent on a rezoning with a plan of an 8 –story tower. When considering that the adjacent Preston Tower is 29 stories, and that these units were well buffered from the single family homes, the concept seemed realistic.

Once the offers were procured, as requested, Livingston turned them over to the HOA for handling.  The Imperial House HOA then established a steering committee that was intended to ultimately take the opportunity to the ownership for a vote. Somehow,  the steering committee decided to interview other brokers. Once the steering committee was established, the only communication Livingston received was an opportunity to apply for the job of representing the owners if they decided to sell.

We have learned that last Thursday night, the steering committee got a stiff taste of real estate reality from the commercial broker they hired, Newt Walker. Newt came to a meeting and stayed for only about 30 minutes. He poured a big huge ice bucket of cold water on any selling aspirations. According to sources at that meeting, he basically said forget any re-development in this area, at least for now. The neighborhood and political climate has made it almost totally unattractive to developers.

“Prior to the Transwestern deal, I had interest from “big name” developers,” Newt told me. “They were thinking of an 8-story luxury project with underground parking, which would have been plausible if Transwestern had not just gotten clobbered.”

Basically, the well-financed and orchestrated “Not in Preston Hollow” fight has been as chilling as an ALS ice bath for Pink Wall re-development. Developers need density to make big numbers work — the Transwestern deal started as an $18 million deal for the owners of the Preston Center Apartments and Town House Row. Initially, each Town House Row owner would have cleared $1.6 per house for property with current DCAD values of about $450,000. Talk about tax revenue!

“The neighbors need to realize that the renters of these new developments could be of a higher level,” said Walker. “But the Mark Cuban discussion of his land on the other side of Preston and what he might do with it created uncertainty.”

You need a consensus, says Walker, which the Pink Wall owners certainly do not have, at this time

“I advised my client to be calm and wait for a better environment in which to explore a sale.”

Meantime, the structures in this area are getting tired, some in need of substantial renovation many HOAs cannot afford. I know: Imperial House is across the street from The Seville where, full disclosure, I own one unit.

What may happen, said Walker, is a 501 c non profit may come in, buy up a few of  the units and occupy  half-way houses in the area. Then homeowners might wish they would have been more receptive to more density living.