'As Downtown Goes, Our City Goes': Developers Stress Importance Of Strengthening Dallas' Core

Downtown Dallas is slowly becoming a place where people come to do more than just work, choosing to live and spend leisure time there as well. But several longstanding obstacles continue to stymie success.

Public and private stakeholders have invested time and money into revitalizing the city’s urban core over the past two decades. Efforts to add new residences, improve walkability and rid the area of crime have translated to a meaningful increase in foot traffic, but significant challenges remain that keep Downtown Dallas out of step with the central business districts of other major metros.

“If we are going to have a healthy region, we need to have a healthy core,” HKS CEO Dan Noble said Wednesday at Bisnow's event at Gilley’s Dallas. 

There has been momentum in greater Dallas, Noble said, but it has mostly occurred in the suburbs.

Roughly 15,000 people live downtown, a meaningful gain from the 200 or so residents who called the area home in the late 1990s. That number is poised to grow as thousands of new units are created, primarily from building conversions that will remove defunct office space while adding much-needed housing downtown.

Pacific Elm Properties is converting 30% of Santander Tower to residential units, a project that should help activate the area outside business hours.

“The rooftops will drive every other element that is needed to make our downtown great,” Pacific Elm Chief Marketing Officer Sara Terry said. “The components are there, they just continue to grow.”

Much of the housing being added is high-end product at a luxury price point, though some developers are catering to working-class individuals who add income and economic diversity that downtowns need.

Sycamore Strategies is behind a landmark project to convert the iconic Cabana Hotel to a mixed-income apartment community. The project is one of the most expensive affordable housing projects on a per-unit basis in Texas because of its historic nature, company leader Zachary Krochtengel said. 

“Those big swings need to keep happening, and there needs to be deeper levels of affordability in downtown as we develop other housing that is high-luxury,” he said. “Every white-collar job creates blue-collar jobs.”

Outside of housing, the city’s $2B redo of the Kay Bailey Hutchison Convention Center is also expected to breathe new life into downtown. The facility won’t debut until 2029 but has already secured more than 40 bookings, convention staff reported to the Dallas City Council earlier this spring. 

“We are just rocking it at attracting meetings and conventions,” Downtown Dallas Inc. President and CEO Jennifer Scripps said. “That’s some of the most amazing tax revenue you can get because visitors come to town and spend money that we can invest locally and then they go back to where they live.”

The convention center project is happening alongside other developments that will contribute to reactivating the southwestern side of downtown and The Cedars.

Hunt Realty Investments in December unveiled a $5B redevelopment plan for the more than 20-acre property around Reunion Tower, where it plans to build a dozen new high-rises encompassing 5M SF. 

“Nothing could be better for the southwest quadrant of Downtown Dallas than the new convention center project getting started and finished as fast as possible,” Hunt President Colin Fitzgibbons said. “A vibrant, mixed-use entertainment district has got to spring up around the building. Otherwise, it’s not going to be as successful as it could be.”

Utility relocation is underway to accommodate the construction of the new convention center, but the project’s ultimate success will require coordination between the public and private sectors, said Rosa Fleming, the city of Dallas’ director of convention and event services. 

The redo isn't only necessary to attract more tourism but also has the greater purpose of mending the divide between downtown and its historically disenfranchised neighbor to the south, she added.

“It’s not just a physical change but a mental change as well and is really about how we look at Southern Dallas, South Dallas proper and The Cedars,” she said. “It’s really bridging the city together.”

A proposal to extend Texas’ high-speed rail project beyond Dallas by taking it through Arlington and into Fort Worth could thwart the convention center redo and Hunt’s Reunion project. The proposal isn't just inconvenient, Fitzgibbons said, but also antithetical to the city’s vision of rejoining the northern and southern sectors.

“I find it ironic that we’ve agreed to tear down I-345 and trench it so that we can stitch two key pieces of our core back together while, at the same time, many of the same players are talking about repeating that mistake with an elevated rail line,” he said. 

South of I-30, developers are building projects aimed at addressing the needs of the community. Southern Dallas comprises 45% of the city’s population but only 15% of its tax base, a statistic stakeholders claim underscores the failure to encourage equitable investment in the historically underserved areas.

“Southern Dallas is a real, critical piece of the overall city’s success,” said Terrence Maiden, CEO at Russell Glen Co., the developer behind the $200M RedBird Mall redevelopment. 

One of the key ingredients needed to drive investment south of the interstate is infrastructure. The city’s $1.25B bond includes millions of dollars for affordable housing infrastructure in Southern Dallas that, if approved, would unlock more land for development.

“There’s a lot of infrastructure that’s needed,” Allan Bailey Johnson Group co-founder and CEO John Bailey said. “It’s going to spur more development and reduce some costs in the capital stack.”

The success of revitalization projects downtown and in Southern Dallas could have far-reaching impacts on the city as a whole, panelists said. In an era when Dallas is losing much of its business to the suburbs, the health of its urban core is paramount.

“As downtown goes, our city goes,” Fitzgibbons said. “I don’t think it’s mutually exclusive. If we have a thriving downtown, that’s not really going to take away from Uptown or LBJ or Richardson. A thriving core is a generator of activity.”