$130M Offering Sets Dallas Talking, Again

The rumored offering became fact over the weekend with well-placed advertisements in the two metro newspapers. The region's pros say "no way" will the seller get the asking prices.

Dr. Benjamin Feldman, director of the Maharishi World Peace Fund, tells GlobeSt.com that there is no intention of negotiating the bottom line, which has been fully dedicated to building 108 world peace palaces in the US. Other US assets will come to market, but the Dallas holdings make up the lion's share of the campaign coffer.

At issue is whether the Hotel Santa Fe at 5600 N. Central Expressway can even be sold since a failed sale is still chugging through the appeals system. "This has been the strangest real estate transaction I've ever been involved in," David B. Deniger, Dallas-based Olympus Real Estate's CEO, admits to GlobeSt.com.

Deniger won't say how much has been spent to claim the deed nor how much Olympus put up for the property, a five-acre tract at a prime location with a 36-year-old hotel that's seen better days. But, he quickly adds, "it's not $20 million."

Dallas County puts the hotel's 2002 assessment at $5.2 million, $3.5 million less than 2001. Real estate insiders say the Olympus contract was about $8 million.

Deniger says professional principles are behind the hot pursuit. "We believe in the sanctity of the contract," he stresses, noting Olympus fulfilled its end of the contract and expects the Maharishi fund to do the same by turning over the deed after failing to show for the closing three years ago.

Despite the pending appeal, Feldman believes the organization, part of the Netherlands-based Maharishi Global Development Fund, is able to sell the hotel, bought around 1990 for about $2 million. The fund, he says, "has a mechanism to assure the buyer of the safety of the investment" should someone surface for the one-time hospitality hotspot that played host to Elvis and Bob Hope. The hotel debuted in 1967 as a Hilton Inn, a development of the Tischer brothers, part of the old guard who helped to build Dallas.

The land, or at least part of it, also has been mired in controversy, from being the site of a 1,000-foot skyscraper to a contested condemnation for a freeway expansion in the Colony. The Maharishi Global Development Fund recently collected $14 million for 21.6 acres fronting Texas 121 after hiring the right powerbrokers to battle the state over a land condemnation. Feldman says that settlement did not set the price for the new offering.

In March 2000, the fund paid $2.60 per sf or $37 million for 328.7 acres, says George Roddy, president of Dallas-based Roddy Information Services. It's not likely that they're going to harvest $8 per sf now, he contends, regardless of a positioning in "a hot area for a corporate type of deal."

"The majority of that land isn't worth $2 per sf," says Robert Grunnah, president of the investment division for Dallas-based Henry S. Miller Commercial. It could be listed for $3 per sf, but not any higher, he says.

Grunnah says the land is under development pressure, but most anchors already are in place. The Maharishi's price tag simply shows "they're out of touch," he adds. Repeated failed plans and the pressure play with the land condemnation have sowed seeds of scorn with many in the brokerage community.

The new plan for the peace palaces is of the utmost urgency due to world events, Feldman emphasizes. How long will the properties stay on the market if the price is firm and the prices are in fact out of line? That, says Feldman, hasn't been discussed. "We haven't thought in the future...if," he adds with a matter-of-fact note of sarcasm, "there is a future.