Turtle Creek: Smoke on the Water? Part 2: The Prodigal Lots

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Smoke 2 Big Map copy copy

Last week we were at the other end of Turtle Creek. This week we’re sort of in the middle – the Cedar Springs and Turtle Creek area. In these few blocks we have a simmering skirmish, Church rummage sale, a long-time owner looking to raise a poky lot to high-rise heights, and an “ink still wet” deal.

The Skirmish

Renaissance - Poston Map

In 2003, when the Renaissance converted from apartments to condos, there was discussion to “square off” their lot and purchase the roughly half-acre lot at 3407 Hall owned by George Poston. A deal was never struck when Mr. Poston’s price, pegged by sources at $600,000, wasn’t met. Over the years, attempts have been made by developers to acquire the lot – all unsuccessful.

If the Poston name sounds familiar, it should. Back in 1971, Mr. Poston acquired 29-acres at the Tollway and LBJ that would become the Galleria. After hanging on for years trying to bring Galleria to fruition, Mr. Poston sold the land in 1981 to Cornell Oil. Cornell would ultimately develop Galleria, dashing Mr. Poston’s chance to realize the development dream he described “as once in a lifetime.“

Flash-forward and we see a patient Mr. Poston again understanding the potential of this sliver of land. To The Renaissance, it’s a potential view-killer for many of its units. To a developer, it’s a chance to bring a profitable high-rise to a cherry piece of real estate facing Lee Park.

Needless to say, the Renaissance is all too aware of the impact a sale of the property would impart. The Oaklawn Neighborhood Association is equally wary of any development plans. However to me, whatever could be built would have little impact on area traffic. The sub-half-acre lot is far from large and the trend towards massively expensive condos would likely attract residents not part of the daily commuter grind.

Cheng's One Dallas High-Rise on McKinney

Cheng’s One Dallas High-Rise on McKinney

Earlier this year the property was under contract with Cheng Investments, the same developer building the One Dallas high-rise on McKinney and Routh. The rumored $3-million deal fell apart due to a failed zoning change whose strong opposition was unsurprisingly led by the Renaissance. Cheng wanted to build a high-rise that required a change in zoning to allow his building to have a larger footprint that is allowed.

Since the deal soured, no other deal seems to have yet materialized. But I have to wonder how much the Renaissance is kicking themselves for not paying the $600,000 when they had the chance. Instead of a measly $1,000 per unit, purchasing the land now might cost upwards of $5,000 per unit – a price that’s only going to continue to rise.

Who is Paul Cheng?

Paul Cheng is an interesting character. As part of the savings and loan scandal of the 1980s, Paul Cheng and partner Edward Heath were convicted in 1991 and sent to prison for 30 and 20 years respectively for their role in the collapse of Guaranty Federal Savings. The costs to taxpayers from the Guaranty Federal failure were estimated in 1990 to be $4.5-billion in “cash and tax breaks.” Of course all this unpleasantness has been all but erased from Cheng Investments’ history. But the connection is there if you look.

Cheng Investments states, “In 1986, the Tiffany Building, an investment by one of Paul Cheng’s companies was sold for the highest price per square foot ever realized in the City of New York at nearly $1,000/sf.” According to the New York Times, The Tiffany building was purchased by Pacific Realty from then Tiffany owner Avon in 1985. Pacific Realty flipped the property the following year for “$810 a square foot, or $96.6 million” to a Tokyo-based real estate company during the Japanese real estate invasion. The principals for Pacific Realty? Paul Cheng and Edward Heath of Guaranty Federal Savings.

A few years after serving just six of his thirty year sentence, Mr. Cheng was acquiring land in 2003 in sleepy Lavon, Texas. The land would ultimately result in the Grand Heritage development of 5,000 new homes. Mr. Cheng’s partner in Grand Heritage was W. Herbert Hunt, who with his brother Nelson Bunker tried to corner the silver market in the late 1970s. The resulting collapse of silver prices ultimately resulted in the Hunt’s bankruptcy. Small world.

For more detail on Mr. Cheng’s history, click here and here. For a write-up after my own heart on the Hunts, click here.

Church Small

The Church Rummage Sale

Sources say that the Oak Lawn United Methodist Church has sold an adjacent property on Cedar Springs and Welborn for around $7.5 to 8 million, which will result in a (zoned) eight-story mid-rise. The church will retain some parking rights and will use the proceeds to restore their small gem of a building.

Stay tuned for more details!

 

Exell

Exxir’s 1970’s apartment complex

The Upsizing Owner

I had a nice chat with Michael Nazerian of family-run Exxir Capital who have owned an unremarkable 1970s apartment block at Hall and Carlisle for about seven years. They feel that now is the time to develop the property into something special. Their goal is to create a space with architectural interest (not another beige shoebox) that adds to the walkability of the area and connects residents with Turtle Creek, the Katy Trail and Lee Park.

In order to create some competitive creativity, they charged three offices of their architects to come up with separate concepts for the site that would include 20-ish floors with a mix of residential with ground floor retail and restaurant space.

Armed with these conceptual designs, Nazerian invited the neighborhood on June 5 to sip champagne and nosh on nibbles while viewing and commenting on the conceptual designs – both good and bad. And did they ever. Nazerian said that local residents had many questions and comments that were captured and will be used to find tune their plans.

NOTE: Nazerian wasn’t comfortable showing off the concepts in “print” as they’re really just studies, but promised CandysDirt.com would be first on the list to receive more information as the project becomes more concrete.

He felt a rough estimate of the vibe of the crowd pegged 75 percent as favoring some type of development with the remainder either not liking anything they saw or not wanting any redevelopment of any kind.

Talking to the neighbors is a smart move. Locals can kill or embrace a new project that seeks a zoning variance, as this one does. It’s also smart because some of the participants may be future residents or customers of the planned businesses.

We spoke of the layered architecture that European cities enjoy with their centuries of buildings. Some, like Paris, decided to completely rework the city versus London that after the fire in 1666 toyed with a Paris-like planned city but decided to put the roads back where they were. I got the feeling he understood lasting architecture versus slapping-up buildings to cash in (cough-westvillage-cough) – and that’s good for the neighborhood.

Of course, I have to point out that a 20-story tower will intrude on some neighboring high-rises’ views (see top map). That said, the city’s skyline is rapidly changing and I’ve repeatedly pointed out that high-rise residents didn’t actually purchase the view, just the window.

Hot off the Press:  Last night I was informed a deal went through for another development on Carlisle and Bowen that will see the Turtle Creek Terrace complex make way for a pair of mid-rise rentals.  One, a proposed 10-story that will be more luxe with the second six-story being smaller, more affordable units.

Of course stick to Candy’s Dirt, where you’ll hear about any developments with these and other goings-on.

Remember: Do you have an HOA story to tell? A little high-rise history? Realtors, want to feature a listing in need of renovation or one that’s complete with flying colors? How about hosting a Candy’s Dirt Staff Meeting? Shoot Jon an email. Marriage proposals accepted (now that THEY ARE legal in Texas)! [email protected]

Jon Anderson is CandysDirt.com's condo/HOA and developer columnist, but also covers second home trends on SecondShelters.com. An award-winning columnist, Jon has earned silver and bronze awards for his columns from the National Association of Real Estate Editors in both 2016, 2017 and 2018. When he isn't in Hawaii, Jon enjoys life in the sky in Dallas.

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