Investor Plans to Sell Former Dallas Morning News Headquarters to Data Center Firm

Poor communication on the part of the City of Dallas allegedly cost downtown a new entertainment district. Now, a data center could be built in its stead.

Local CRE investor Ray Washburne recently told The Dallas Morning News that he plans to sell the news outlet’s old headquarters on Young Street to an unidentified data center company.

As previously reported by CandysDirt.com, Washburne purchased DMN’s former headquarters in 2019 for $28 million, adding it to his portfolio of properties in and around the Central Business District. He said he wanted to contribute to the revitalization of downtown by converting the 8-acre campus into an entertainment destination anchored by a boutique hotel and apartment units.

Washburne’s original vision was reportedly thrown into question following the announcement of the multibillion-dollar redevelopment of the Kay Bailey Hutchison Convention Center. Now, it appears he’s scrapped his idea altogether and plans on offloading the property.

“I wanted to do a joint venture [with the city], and I spent millions on plans, but I can’t go ahead without a firm understanding of what the city wants to do,” Washburne said in an interview with DMN. “Communication has been basically zero … [and] I’m not going to wait another five years.”

CandysDirt.com reached out to Washburne for comment on the pending sale but did not receive a response by deadline.

City Teased Acquisition of Old DMN Property

In a statement to DMN, City Manager Kimberly Bizor Tolbert said, “We have worked in good faith… but we will not negotiate something as critical as this in the press.”

She and her staff briefed the council about the situation on Wednesday during executive session. The agenda item that day noted they would “deliberate the purchase, exchange, lease, or value of real property located at 508 Young Street.”

It was previously reported that a spokesperson for Inspire Dallas, the project manager for one phase of the convention center redevelopment, reached out to Washburne to relay the city’s purported interest in purchasing part of his property.

During a meeting of the Economic Development Committee last February, a presentation showed the convention center redevelopment encroaching on DMN’s former campus, occupying space where a parking garage now sits.

“If they’d like to buy a portion of it, I’m happy to talk to them about that and figure out how it would fit into what I do,” Washburne told DMN last year. “If they don’t want to buy any of it, that’s fine with me also.”

Rosa Fleming, the convention and event services director for the city, subsequently threw cold water on the notion, calling the particular map in the presentation a “concept drawing” and telling DMN that the property wasn’t being factored into the convention center plans.

CandysDirt.com reached out to Tolbert, Mayor Eric Johnson, and all 14 Dallas City Council members for comment on Washburne’s assertion about poor communication and the city’s handling of the matter. A couple of council members responded, saying it would be out of line for them to comment on executive session discussions, citing the Texas Open Meetings Act.

District 2 Council Member Jesse Moreno told CandysDirt.com that the convention center is “one of the most important projects in the history of this city.”

“Projects of this magnitude are going to experience challenges, however, as our [city manager] has stated, the City of Dallas remains committed to working with the team of experts who are dedicated to this project to ensure its delivery in the most effective and efficient way,” he added.

Downtown Data Center Elicits Dismay

Data center construction in Texas has been booming, with society’s rapidly growing computing needs driving the surge. Data Center Map currently lists 303 such operations, with some 155 in D-FW. Data centers are incredibly energy and water-intensive, generate a lot of noise, and have high-security needs, according to the American Planning Association’s publication Zoning Needs.

The Central Business District is currently home to more than a dozen data centers of varying sizes and types, according to Data Center Map, so from an infrastructure perspective, one more can’t hurt. Nevertheless, those who care about downtown’s cultural and social cachet are not happy.

DMN architecture critic Mark Lamster lamented the course of events that led to the building’s upcoming sale, writing, “Instead of contributing life to the area, it will be inhabited primarily by machines guzzling vast amounts of energy — as much as 50 times more than a typical commercial building by area, according to the Department of Energy.”

He went on to throw shade at the city, accusing it of lacking transparency and accountability.

DMN’s editorial board published an op-ed on Thursday expressing similar sentiments:

“Dallas can do better, and has to do better, for a part of the downtown that needs, but sadly lacks, a vision for a great street life, for hustle and bustle and growth. We hope that there is still a window for Washburne and City Hall to work out a deal that ensures this site has a chance for that life. We know it can’t be home again to the boisterous newsroom some of us here remember and cherish. But it ought to be home to something with a little life. And nothing says lifeless quite like a data center.”

Washburne said his deal with the buyer is expected to close in April. If the sale does go through, he said the buyer will preserve the building’s edifice, including its iconic three-story stone facade, though that might be of little comfort to those hoping for the revitalization of Dallas’ city center.