Imagine if someone walked up to you and said:
“I want to give you $100 million to transform our neighborhood, but you have to invest the money so it generates enough cash flow to pay me back.”
That’s essentially the question we posed to neighborhood resident and architect Raymond Harris, AIA, of Raymond Harris and Associates.
But this isn’t just a money-dropping-from-the-sky scenario plucked from thin air.
Instead, this is the basic premise of revenue bonds, a term you may have heard recently in conjunction with the proposed convention center hotel, which the Dallas city council wants to build using $500 million in taxpayer-guaranteed money.
It’s not the norm for a government entity to get into the commercial real estate business — in a capitalist society, that’s usually left up to those in the private sector. But in this case, citing long-term economic benefits for Dallas, the city council appears to be channeling real estate developers.
So if the city has decided to pour $500 million into the convention center neighborhood, what’s stopping it from spending a chunk of change here in Lake Highlands?
According to council plans, revenue generated by the convention center hotel would pay back the loan the city takes out to construct it — that’s how revenue bonds work. It’s not a novel idea: The DFW International Airport’s Grand Hyatt Hotel is one example of a privately operated project financed by public revenue bonds; another is the parking garage at Dallas Love Field. In both cases, fees paid by people booking a room or renting a parking space pay the mortgages, so to speak.
Maybe a government entity hasn’t embarked upon some sort of mixed-use, walkable, New Urbanism-style project in Dallas yet, but who’s to say it couldn’t? Or shouldn’t?
The important questions are: Would the revenues from the project be able to pay off the bonds? And would the public benefit justify the government’s financial contribution and exposure to risk?
In the case of the convention center hotel, the city believes the answer to both questions is yes. And if the city council believes it could work for the convention center, why not put taxpayer dollars behind projects in our neighborhood, right down the street from where we live?
To that end, we’ve asked leading architects and urban planners to pick an area in each of the five Dallas neighborhoods where we publish magazines (visit advocatemag.com to see the others).
Our charge: Use $100 million to create practical, neighborhood-friendly and walkable New Urbanism-style developments to help take our neighborhoods into the 21st century — exactly the kind of development the council is encouraging in Dallas these days.
A couple of caveats: We assumed that the land for this theoretical project would be acquired at a reasonable price, and we assumed the targeted land could be re-zoned, where necessary, without any complications — neither condition, of course, is a given.
Finally, we aren’t saying this is the best or the only alternative where $100 million could be spent improving our neighborhood. We aren’t saying it’s the most practical project. And we aren’t saying that having the city act as a real estate developer anywhere in the city — including Downtown — is a good idea.
But the council opened the door to this idea by committing $500 million to build a hotel Downtown, and this neighborhood proposal is certainly another option.
Here in Lake Highlands, Harris devised an imaginative, forward-thinking re-development at Walnut Hill and Audelia. It replaces the outdated apartment buildings that surround the intersection with single-family homes and townhomes for retirees, adds a redesigned streetscape, includes better-quality construction, and upgrades the intersection’s retail and office space.
“This is the city center of Lake Highlands,” says Harris, whose firm is one of Walmart’s main architects. “There’s no reason why it can’t be like Highland Park Village or Casa Linda. We can eliminate the deterrents to growth and find a long-term solution.”
His plans play off the proposed Lake Highlands Town Center being developed by Prescott Realty a mile away at Walnut Hill and Skillman. That means filling in the neighborhood amenities, like a dry cleaner, gas station, coffee shop, and fast food — services that the Town Center isn’t designed for.
“What you don’t want are restaurants,” Harris says. “You don’t want to compete with Prescott; you want to complement it.”
The new, theoretical Walnut Hill-Audelia area could include:
• A renovated strip center that makes all four corners part of a whole, instead of four separate shopping areas. All told, the reimagined project would have about 200,000 square feet of retail and office space, including a 45,000- to 60,000-square-foot grocery store.
• Single family homes in the area around the intersection, sitting on one-quarter- to one-third-acre lots and selling for $350,000 to $500,000. In addition, he sees about 100 smaller units targeted to retirees. “The Town Center is going to have apartments,” Harris says, “so that will replace the outdated apartments here.”
• A redesigned, pedestrian-friendly streetscape so that residents can walk to the center. “This is not a big, urban high-density area,” he says. “We’re always going to have cars. But we want to slow traffic down.” Accomplishing that goal requires techniques such as greenbelts — trees and the like — along each side of Walnut Hill, along with pavers at the intersection.
Is all of this possible? Susan Self of Today Realty, which manages property at Walnut Hill and Audelia, says she doesn’t believe anyone knows the future of that intersection, especially considering the current economic climate.
“We’re looking at a lot of different options and keeping our options open for any scenario you can imagine,” Self says. “We don’t have anything specific.”
Tony Doles, co-owner of T. Hee Greetings and Gifts at the intersection’s southwest corner, has been leading a petition drive to attract new tenants to Walnut Hill and Audelia. Doles says “anything to improve our intersection would be incredible because most people in Lake Highlands really consider this intersection the heart of Lake Highlands.
“Your quick, run-in-and-out, independent businesses and neighborhood businesses that Lake Highlands seems to want, they’re not going to be able to afford a place like Town Center,” Doles says. “We definitely wouldn’t want to compete, and I don’t think we would because our position at this corner leads itself to being that neighborhood quick stop.”
Harris believes his version of a re-developed Walnut Hill-Audelia shopping center is possible today, and he believes it could cost about $100 million.
What’s lacking appears to be the vision and leadership to make it possible. According to individual council members, not even a “yes” vote on the May 9 convention center hotel referendum (a “yes” vote is a vote against the hotel) will stop the city from spending $500 million to build the hotel, so clearly the council is willing to jump into the commercial real estate development business.
And that’s why we thought the council might want to consider an alternative or an addition to their plans: Maybe we should begin a similar conversation about using revenue bonds to spur neighborhood-appropriate development, like Harris’s theoretical Walnut Hill-Audelia project, throughout the city.
Additional reporting by Austin Kilgore.
