Dallas Developer Backs Out of 1.4M-SF Fort Worth Buy

It's not destined to be a white elephant, GlobeSt.com is told. The landmark 833,000-sf, eight-story building at 2600 W. Seventh St. is still a likely candidate for a mixed-use project given development activity now going on in the West Seventh Street Corridor.

"That's going to be a hot property," says Pat Svacina, the City of Fort Worth's spokesman. "But it has to be someone with the cash and the equity. I don't think it's going to be a white elephant at all." The main building is backed by a 565,400-sf, single-story warehouse and receiving docks.

Gerald Stool, principal of Greenway Investment Co. in Dallas, wasn't available to discuss why his firm withdrew the bid, but his office confirmed that the deal is no more. Greenway had been working on the plan while talking incentives to the city's economic development committee. Word on the street was the acquisition was headed for a November closing after roughly six months of due diligence. The property is under the guardianship of the US Bankruptcy Court District of Delaware.

"It's a strategically commercial corridor for the City of Fort Worth. I am sure there are incentives for redevelopment," says Bob Riley, the city's development director. But, he quantifies the comment, it has to be a viable plan with a focus on saving the 1928 building. "I think there'd be some strong concerns if somebody would want it just for the dirt," he emphasizes.

Should someone come forward, they most likely won't be locals, says Ben Loughry, managing director in Fort Worth for New York City-based Integra Realty Resources Inc. "I think it's a wonderful redevelopment opportunity," he tells GlobeSt.com, "but it's going to take some deep pockets to do it just from the sheer size of the property. My guess is it's going to take an outside developer to come in and move it forward."

A year ago, Baltimore developer Samuel Himmelrich backed out of a $15-million purchase option. Greenway's optioned price has not been openly discussed, but it's believed to have been considerably lower.

Greenway's wherewithal to make the project fly wasn't in question. The firm owns two million sf of retail space, two million sf plus of office product, 500,000 sf of industrial, 2,500 apartments and 700 acres of developable land.

Loughry acknowledges that feelers are being put out for a new taker. His clients have lost interest, as have others most likely due to two years of being under contract by Himmelrich and Greenway. "Somebody is going to have to get a bargain on it to do something now," Loughry says.

The West Seventh Street Corridor, though, is attracting interest because it abuts the Cultural District, home to a $65-million Modern Art Museum that's just a month away from a grand opening. Another Dallas developer is talking incentives to the city for a tract across the street from the Montgomery Ward property. The plan again is a mixed-use project. Another project under consideration is a quasi-warehouse district for home fashions.

"Somebody is going to come in," Svacina is convinced, "and it's going to be sooner rather than later.