Photo: Google Maps

1401 Elm as it looks today. Even though developers started some work on the skyscraper, redevelopment efforts ground to a halt last week and lenders are forcing a foreclosure auction. Photo: Google Maps

Last week, we told you about the mess happening at 1401 Elm, a landmark $240 million redevelopment deal in downtown Dallas facing forced foreclosure after a developer pulled out.

The city of Dallas had committed $50 million in economic incentives to further progress. But with of the departure of New York-based Olympic Property Partners from the project, early lenders, who shelled out $53.5 million in loans to start redevelopment efforts, are forcing a foreclosure sale Dec. 1.

Rendering courtesy of Olympic Property

City leaders say they’re still committed to the redevelopment of 1401 Elm. Rendering courtesy of Olympic Property

But city officials say they feel compelled to try and help the skyscraper. The deal is considered to be a major milestone in downtown Dallas’ forward progress, and they reiterated their support for the planned mixed-use redevelopment project, which was supposed to create a combination of commercial space and apartments.

“We are absolutely committed to the redevelopment of the 1401 building, but will need to see how the ownership situation shakes out before making a specific recommendation to the city council,” Karl Zavitkovsky, directory of the Office of Economic Development, told Steve Brown of the Dallas Morning News. “The good news from the city’s perspective is that almost all the environmental mitigation and interior demolition is completed. Redevelopment of 1401 Elm remains a high priority for the city.”

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Photo: Google Maps

Photo: Google Maps

Downtown Dallas’ 1401 Elm was once touted as the tallest building west of the Mississippi River, with 52 stories and 1.5 million square feet of office space.

This Central Business District skyscraper, formerly the First National Bank, has stood depressingly vacant since 2010. Plywood boards and “keep out” signs mar the once-impressive edifice.

Rendering courtesy of Olympic Property

Here’s what the redevelopment of 1401 Elm was supposed to look like. Will a foreclosure sale make these plans go down the drain? Rendering courtesy of Olympic Property Partners

Plans were underway for an encompassing $240-million redevelopment until this week, when the New York-based developer leading the deal announced it was pulling out. Because of that, 1401 Elm is now slated for a foreclosure auction to meet the demands of lenders, who shelled out $53.5 million in loans to start redevelopment efforts.

To add a layer of drama for the landmark deal, another real estate investor based in Chicago is suing the current owners of 1401 Elm, claiming it was kept from buying the property through fraud.

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