Unpacking a Solution For PD-15: The Envelope, Please … Part 2

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In Part One, I explained how I’d put my thoughts into an envelope to be opened once the PD-15 process was complete. However, my surprise resignation opened the envelope to share now.  In that first column, I faced the hard truth of the economic viability of redevelopment and how the buildings that might be built within zoning were not profitable for buyers or sellers. I also touched on the aging demographic the area attracts and their less likely bent towards renovation and the ability to play catchup on years of deferred maintenance in some complexes. Finally, I wrote about how in real dollars, the past 15 years have been a wash (punctuated by Recession-driven ups and downs). If you missed Part One, catch up here.

The overall endpoint being that if the area wants to attract new buyers for the long-term (not just because Dallas is skint of housing), who have the money and willpower to uplift the area, PD-15 is the last hope.

So here’s the deal. There are six buildings within PD-15 — two towers and four low-rises. Density varies from 15 units per acre at the Diplomat to 85 units per acre at Preston Tower. In the low-rises, it’s between 15 and 30 units per acre. The” ah-ha!” here isn’t that all parcels should now be made completely equal. The “ah-ha!” is that they’re unequal for a reason that may need to continue. My position to the PD-15 task force has always been “fairness” doesn’t necessarily mean “equal.” So this plan is fair (considering the present situation), profitable for buyers and sellers, and uplifts the neighborhood, but it’s not strictly equal.

Preston Place in better days

Preston Place

Preston Place burned in March 2017, with a concrete pedestal being all that remains of 60 condo units. In the original-original plans, Preston Tower was to have had a twin on this lot that would have been perpendicular to the existing tower.  In the 1970s there was another high-rise planned for the site.  The reason being that this location is equidistant from both Athena and Preston Tower, minimizing encroachment and view blockage.

Proposed Alliance project in Knox would work well

I call for a high-rise to finally be built on this parcel.  Equally, similar to the 1970 lot coverage diagram, I see it being pulled as close to Northwest Highway as possible to further minimize its encroachment into the view plane of the towers. Before you think this is purely selfish, I will remind you that what the towers can’t see is also invisible to the new tower as well. The towers don’t want to see it any more than the new tower’s residents would want to see the existing towers. Win-win.

I think the trade-off for building on the southern end of the lot enables them to also build a lower 3-4 story “tail” to the north.  This could be flat units or even townhouses. They would enclose a partially or completely above-ground garage.

Yes, above-ground parking … but I want something in exchange (more later).

High-rise height?  I don’t really care as long as it’s reasonable. I don’t walk around looking up and I doubt you notice Preston Tower is eight stories taller than the Athena. You just notice they’re both tall.  And anyway, I want something in exchange (more later).

It goes beyond saying that this new building should set a new high-bar for the area in terms of design.  No shoebox with windows, but a real, world-class high-rise people drive to see.  That type of building would be a big part of uplifting the whole neighborhood in ways unimagined.  This one building has to be done right.


I’ve made no secret that I think seven stories is too high. I also think that since it’s essentially double the thickness of the Preston Tower garden building, it pulls too close to its neighbors.  That said, it has to be economically viable. So I’d likely give them six stories with a step back on the southern side above the third story. That would pull it back from several of its neighbors.

The most impacted by the height will be Fontainebleau and Royal Arms, which have windows facing the alley the new Diplomat would border.  Before deciding on whether a step back is needed for those buildings, I would want to understand what those windows are.  If it’s a bathroom, bedroom or kitchen, I’m more apt to be OK without a setback. If they’re living rooms, I’d want a similar step back to mitigate darkness. Royal Arms and Fontainbleu should also horse-trade with the developers to rework their carports.  As sure as listening to the rain clatter on those tin roofs is deafening to existing residents, it’ll be just as bad to the new building’s high-priced residents too.

I do not see the need for east-west step backs because Preston Place will have little interaction with the side of a new Diplomat and the Diamond Head Condos don’t have significant window space on that edge either.

I know the Diplomat team will gripe.  But here’s the thing.  Diplomat was negotiating with A. G. Spanos for months before the Preston Place fire. At that point there was no appetite for redevelopment and I’m betting they thought snapping up the surplus ~60 units added to Diplomat’s current 15 would be enough to make a profitable development. That’s 75-80 units. I’m betting before the Preston Place fire they weren’t planning on challenging the whole PD to get the 120 units they want today.  I think after the smoke cleared, they felt there was an opportunity for more (good for them). But the fire also added exponentially more scrutiny on the deal (bad for them).

I may be completely wrong, but it sounds more realistic to slip in those ~60 units than to deal with the complexity of reopening an ancient PD for the added unit counts. Regardless, the neighborhood would be involved for better or worse.

Royal Orleans

In the beginning, many thought/hoped Royal Orleans would partner with Preston Place for an Athena-like building across Northwest Highway. Depending on who you believe, it looks unlikely this can happen because of the mini-Tulane Blvd. that runs between the two is a fire lane.  So it’s likely on its own.

Royal Orleans has also not announced publicly whether it’s for sale or not.  I hear there are enough holdouts who go back and forth. So even if the city were to allow the combination, it’s kinda hard to combine parcels when one may or may not be for sale.

Royal Orleans also has problems.  It’s very close to Athena and would be close to a Preston Place high-rise. Both would tap into the concept of tower separation that keeps high-rises apart to minimize canyonization. And in an acre, there’s no space to pull away from its neighbors.

Its existing pool encroaches into the area’s setbacks along Northwest Highway that any redevelopment would likely force back.  Like Diplomat, it’s a scant acre that leaves it without the square footage to effectively go high. The higher you go, the more parking you need. The more parking you need, the higher or further underground you need to go.  At some point, it’s a losing battle. It’s similar to another small parcel I know about that plans an 18-story tower but with just 36 units. Royal Orleans could go big units and higher, but probably not high-density and high together. But that’s just guesswork.

Before deciding, I’d want to speak with an independent architect to understand what’s possible and what’s not. The point being to understand what’s viable rather than just throwing rights at them.

Diamond Head Condos

Diamond Head growth is most pressing for Athena. Literally across the street from each other, Athena would be ruined by a tall building blocking its main northern views so close.  By comparison, the Toll Brothers’ building in Oak Lawn will be a block, not feet, away from its high-rise neighbor.

Tower separation requirements would absolutely come into play with an uncertain outcome depending on the shape of what would be built.

Also, like Royal Orleans, Diamond Head has not publicly decided to sell.  I’m told many want to stay, but the complex is facing costly maintenance problems.

My fix for Diamond Head is creative but perfectly legal, described by one land use attorney as “elegant.”  Any redevelopment of Preston Place, Diplomat, and Royal Orleans would pay Diamond Head to extinguish their right to build above four stories. Those properties would do this in order to get approval for their increased development plans. (e.g. You want 10 new units. PD-15 will give you five and you purchase five from Diamond Head.)

I wrote before about transferable development rights, where one parcel sells development rights to another. The exchange cancels one right and moves it elsewhere. In facilitating this deal, Diamond Head could remain and have not only the money to fix its problems, but also to put a few bucks in each owner’s pocket … today. Call it a windfall.

Say the number was $500,000 per acre and say Preston Place, Diplomat, and Royal Orleans equal four acres. That’s roughly $2 million in Diamond Head’s pockets not to go above four stories.  They’d still be able to sell out in the future for a four-story development but will have already pocketed and enjoyed the money from increased development today.

You may be thinking that $2 million isn’t much for a lot zoned MF-3, but it’s actually pretty good.  Tower separation plus the residential proximity slope says they’re unlikely to get above seven stories anyway (and probably six). Besides, the city may be stupid, but I doubt they’re dumb enough to approve a 20-story tower across the street from another in a residential area like the Pink Wall.

A payout of $1 million per floor isn’t bad in the light of this reality.

You may also be thinking that I said four-story development isn’t economically feasible.  True, but that’s without the $2 million in extra funds. In the end, Diamond Head would get all the payout they’re entitled to, the only difference being that some of it comes today and some in the future when and if they decide to redevelop.

When I wrote earlier about above ground-parking, height, density, and the other “asks” by developers? Those were the bargaining chips that would save developers serious money and enable them to make more.  Those chips would be cashed-in by paying Diamond Head to stay low.

The other side benefit is to safeguard against higher development in the parcels to the east.  Developers like to nibble at the edges.  Were Diamond Head allowed to go high, we’d see a developer trying to use it to bootstrap another tower to the east … something no one wants.

Legally Speaking

As I said in the beginning, PD-15 is legally one entity comprised of six parcels that are treated differently with respect to density. That inequality will continue but be far less pronounced. I have not given exact numbers of additional units for a reason.  I’m not going to dictate that at this stage because the biggest issue is the foot- and air-prints of new construction.

In order to accomplish this shifting density and transferrable rights for Diamond Head, PD-15 must agree to allow each parcel to become a sub-district within the main PD-15 area. Lacking a single owner for the whole PD, this will allow the group to make decisions individually that will serve it today but also in the future.

Once the sub-parcels are enabled, the scheme for paying Diamond Head can be executed.

Yes, it adds slightly more complexity to the plan, but only slightly. And it puts the whole PD on better footing in the future in case another building faces disaster as Preston Place has in a real estate market far different than exists today. As somewhat separate entities that can be treated differently, a solution can be executed for one parcel without the mandate to true-up the rest. Win-win.

PD-15 Working Group Reaction?

I have brought these general concepts to various people within the PD-15 working group and while some showed interest, it’s been largely met with glazed eyes and in one case being told it was too much work (by the laziest member).

Laura Miller, without bothering to ask, accused me of wanting dramatically increased density. My plan would add something close to a second Preston Tower in housing units spread across a similarly-sized four acres.  As I said, I can’t be more specific on unit counts without seeing the mix of units that would be proposed, but it would be close.  At 350-ish new units, the traffic increase would be so minimal the city wouldn’t even require a traffic study.

Across the northern boundary, we’d have 3-4 stories at the back of Preston Place, 5-6 stories on Diplomat and perhaps at some point in the future, four stories on Diamond Head.  On the southern boundary, Preston Place would go high at Northwest Highway and Royal Orleans would require more study.

In Knox or Uptown, this amount of acreage would drive double that density with no problem from the city.  And that’s my fear. A city that is more lenient than the neighborhood, resulting in even more being built.  Many think of the towers as being an aberration in the neighborhood. They’re not — they’re a harbinger.

Sure, this plan is unequal, but it’s also pretty darn fair to sellers, buyers, and the neighborhood left behind. The difference between my plan and “letter writers” is that mine is a starting point for collaboration, not capitulation.


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 and 2017, the National Association of Real Estate Editors has recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com.

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Jon Anderson

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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  1. renato says

    In the interest of trying to get something done given what you are dealing with, my counter as a low-rise lot unit holder might be (1) Full MF-3 $100+ million development of the Preston Place site, (2) Veto right to sales price for Preston Place lot by each of other three low-rise HOAs, (3) 30% of the sales price of the Preston Place lot escrowed on a per unit basis for each of the other low-rise unit holders payable upon the sale of a holder’s lot to a developer, and (4) 4-story limit on new development as contemplated by the Preston Center plan, with an additional story added five years after the date of the Preston Place lot sale.

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