Q4 Demolition Start Being Eyed for Mercantile Block

The retail component, though in the preliminary talking stages, is key to the CBD's revitalization and equal in importance to the 70-acre Victory development. "Everyone recognizes this is the key and cognizant that this is the last full city block to develop," says Gault. "This project really needs to happen to take the Downtown to the next level." Spire acquired the complex in October 2000 for about $4.75 million from Principal Financial Group.

Gault says Spire is considering a joint venture partner who specializes in urban retail projects for that key component, but also is talking with brokers as it scopes out the future development prospects. "If we were to identify someone experienced at urban retail, it could be a win-win situation," he says.

Meanwhile, the legal work is heading into final stages for a development agreement, including time frames, with local government. Gault estimates it will take a couple more months before final pacts are signed. Under the agreement, Dallas would be kicking in $21 million to $22 million for physical construction, excluding the under-consideration 10-year property tax abatement. The funds are being earmarked for demolition and asbestos removal, the parking garage, retail, facade restoration of two remaining buildings and added infrastructure, says Gault. The asbestos abatement and demo are estimated to cost $10 million alone.

Gault tells GlobeSt.com that the site's rebuilding could start as early as first quarter 2002, with the first for-rent lofts coming to market in a year to 14 months. He estimates the project will take two years to complete.

Spire, based in Houston, is an old hand at urban redevelopments. "They're not afraid of the challenges," explains Gault, adding Spire had bought the complex without a final plan in hand. "Spire had recognized the opportunity... and has the wherewithal and fortitude." Spire also owns the redeveloped 40-story, 1.1-million sf Bryan Tower at 2001 Bryan St. in the CBD. Trammell Crow Co. holds the leasing pact.

Upon completion, the Mercantile project will contain 900,000 sf of mixed-use space. RTKL Architects of Dallas is the designer. Turner Construction Co. has been working on the pre-development end of the project, but a general contracting award remains outstanding, says Gault.

The most historic structures, the 355,000-sf Mercantile Building and 202,000-sf Securities Building, will be rehabbed. The 31-story Mercantile National Bank Building, the city's 27th tallest structure, holds the distinction of being the only masonry skyscraper constructed in the US during World War II. A design of Donald S. Nelson, it had been completed in 1942 as the headquarters for the Mercantile National Bank. The Moderne structure includes a neon clock and 115-foot ornamental tower. The 14-story Mercantile Securities Building was constructed in 1954. Being razed are the 22-story Mercantile Dallas Building and 1700 Main.