Smoke on The Water: Turtle Creek Development Update

Turtle Creek Fairmount Map 1

Typically, where there’s smoke there’s a fire.  But sometimes the wood is too wet and all you get is smoke. That describes the current situation on the west end of Turtle Creek’s Gillespie and Fairmount streets.

You may recall the hooplah last June when it was reported that the owners of the Turtle Creek Gardens condos located at 2525 Turtle Creek Boulevard had been sold to a developer.  The deal was rumored to have been with JLL and a price of $43 million.  The deal was to have closed in October and the move-outs complete by February 2017.

I’d heard back in November that the closing had been moved due to troubles securing financing.  This seemed odd since it was also rumored that development plans were within current zoning restrictions. As one source said, “If you can’t get funding for a by-rights plan, something’s got the bank spooked.”  The “spooking” they said wasn’t the buyer or the deal, but rather banks being skittish of Dallas. With all the construction cranes spread across the area, I’ll let you decide if that rings true.

But anyway, it’s April, the deal hasn’t closed and so still no moving vans line the streets in front of Turtle Creek Gardens.  But one thing has changed.  There’s a unit on the market.  Unit 316 popped onto the market for $199,000 for its 1,238 square feet encompassing two bedrooms and two bathrooms.  So at least one owner is losing confidence in the deal.  After all, Turtle Creek Gardens lists 103 units … straight math says that a $43 million deal equates to roughly $417,475 per unit.

The listing also states that the HOA has the right of first refusal on any purchase.  Many condos have this in their bylaws, but I’ve never seen it spelled out in the listing agent’s patter.  I surmise that to mean it’s a real possibility that the HOA will override any offer.  It also hints that the developer’s offer is still on the table.

Owners report that some maintenance is being stalled … which makes sense … no need to be pretty for the wrecking ball … and also says the HOA still has confidence in the deal.  Those owners also say they hope the deal with close “this year.”

But one thing tickles the back of my mind.  It’s been six months since the original close date and no other developer has swooped in, cash in hand, with a similar offer.  Surely the HOA would be within their contractual rights to dump the original deal in favor of another one. So is the $43 million too high?  Has the recent downzoning BS permeating the area scared developers and banks?

Time will tattle, it always does.

Ltd Edition at Night 1

Turtle Creek Gardens’ western neighbor at 2505 Turtle Creek is also silent.  We all recall the fanfare with which The Limited Edition was launched by Canadian developer Great Gulf.  It was to have been the be-all, end-all, ne-plus-ultra of Dallas high-rise living.  Only that after nearly two years of pre-sales, less than a handful of contracts were in hand.  Bank ain’t gonna release funds for that.

Last year we were told that the project was going back to the shop for some retooling and de-luxurizing and that it would be back in the fall.  Well, clearly that didn’t happen.

Folks now tell me that the lot is going to remain dirt for a while. You’d think owner Great Gulf would take down the construction fence advertising Limited Edition, throw some sod down and give the neighborhood a little temporary green space.

3503 Fairmount

3503 Fairmount

You may also recall the little Tara house across Fairmount that is also owned by Great Gulf.  It was to have been rental apartments.  We’re hearing that project will be moving forward.  No word on whether they’ve retooled the floorplans (that I had issues with).  But as of this writing, it’s still just a vacant lot and I’ve heard no timetable.

I wonder if Great Gulf’s woes have infected Turtle Creek Gardens.  Without the signature, overly luxurious Limited Edition on the corner, are banks hesitant to move ahead with a project that may be too expensive for the neighborhood?  Now that has a ring of truth about it.

 

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement.  If you’re interested in hosting a Candysdirt.com Staff Meeting event, I’m your guy. In 2016, my writing was recognized with Bronze and Silver awards from the National Association of Real Estate Editors.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com.

12 Comment

  • Thanks for the update. The information I received from a resident two months ago was that the deal had fallen through due to “Brexit” and that the HOA was giving itself eight months to reconstitute the deal with the developer.

    • Brexit seems a stretch unless the money was pound-based account. In that case, the instant 20% lopped off the pound might have made deal suddenly too expensive.

  • I heard from several, perhaps uninformed, sources the project stalled because soil samples showed problems with building a tall building because of too much water. Any truth to that?

  • The only and obvious reason that I can come up with for the banks being “skittish” or “spooked” about the Turtle Creek Gardens lot is Teixeira Duarte’s proposed Dickason and Hood development having been cut off at the knees by the Regent’s Park led downzoners. Remember TD actually closed on the lot just before the downzoners went public and has been twisting in the wind ever since. Not surprising that lenders and developers would redline the area in response. All of which begs the question why the TCG owners are not all over the downzoners who have been allowed to skate around with their amorphous rezoning plan for going on a year without any accountability for the property value rot that they have engendered. The TCG unit on the market at $199000 is not the first body that has fallen due to this idiocy and won’t be the last unless the city puts a definitive end to the downzone threat.

    • Last I heard they were building by right. What is the source for “cut off at knees?”

      • TD was originally seeking a zoning change (in my opinion to make a better building). When the downzoning kicked off, they stopped talking to the community and filed a by right plan with the city last September. I think because they’d closed on the property, they didn’t want to be financially exposed if the downzoning were successful.

        • So it’s still in play?

          • Not sure what you mean by “in play.” Those lots are owned by TD and they’ve filed a by right plan. It should be a done deal as soon as it passes planning/permitting (which it may have, I’ve not checked recently).

  • Sad for the former lottery winners, that is my dream scenario! 4x the money for investment in a great location
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    As for the LTD.
    Inventory and comps? with Museum Tower and Blue Ciel still “on the market” maybe smarter heads prevailed…..when the financial model expands the slower absorption rate the IRR takes a hit.

  • What is going in the space where they are digging out in-between the mansion and Plaza? Where the parking lot/garage was.