UPDATE: Speculation Mounts With Forest City's New Land Claim

FRISCO, TX-With its earnings call just two days away, Forest City Enterprises Inc. has unleashed a firestorm of speculation by declaring a claim on 132 acres of raw land in the far northern tier of the Dallas/Fort Worth metroplex.

None of the dealmakers would comment on the project, tentatively dubbed Frisco North. "From an economic development perspective, it's a proud day when you can raise the Forest City flag in your community," James Gandy, president of the Frisco Economic Development Corp., tells GlobeSt.com. "When they come in and make a commitment to your community, you know it's going to get done."

Forest City has yet to close on the land from its long-time owners, the Mahard family. One source speculates that the Forest City play is much like any other developer's strategy: option the land, hire the teams to lay the groundwork for design and leasing and then hold off on the closing until anchor letters of intent are in hand.

The Cleveland-based powerhouse developer clearly is circling wagons with the deal. It's already got projects under way in Downtown Dallas and the Tarrant County suburb of Mansfield. Sources report that Forest City also is holding a contract to buy 100 acres in Grapevine. Though Forest City closely guards projects until it's ready to go live, the developer has not made a secret out of its interest in Texas. Its plans include projects in Austin and El Paso.

Local broker G. Gipp Dupree with Stockbridge Corp., Frisco officials and Forest City began talks about a year ago. When the deal becomes reality, the city could easily have a $200-million-plus development at its northernmost boundary. Ten miles to the south is the 720-acre, mixed-use Frisco Bridges, with four million sf of retail that includes Chicago-based General Growth Properties Inc.'s 1.2-million-sf Stonebriar Centre. "We're bookending the community on the north and the south," Gandy says. "It's the first launch of regional commercial development along the [US Highway] 380 corridor."

Gandy's EDC has acquired a 50-acre hard corner abutting the Mahard land. By September 2007, the Dallas North Tollway extension will be completed and the interchange shaping up with a six-lane extension of Virginia Parkway, an east-west highway project that jumped to the fast lane with the Forest City declaration. Forest City's optioned land runs on both sides of the parkway's path and backs up to Parvin Creek.

"We knew the tollway extension was going to kick development into high gear," Gandy says. "Forest City is pushing it higher."

Gandy estimates Frisco North easily could have several million sf of retail and entertainment space with a build-out value well in excess of $200 million. Though it's not been said, a Forest City spokeswoman hinted a residential component could be integrated into the plan. Gandy believes Forest City has started work on the master plan, but isn't sure when it will be submitted to the city.

Local retail professionals were surprised at the Forest City announcement because they're working the same streets and hadn't heard a word about the talks. Still, sources say the project area needs a higher head count and infrastructure, lending to speculation Forest City could be three years from a groundbreaking. Not only does the road need to be extended, but so do water and sewer lines. "Having Forest City up there shows what great real estate is there," a local developer source says. Another high-roller placing a bet on the US Highway 380 corridor is Dallas Cowboys' owner Jerry Jones, who owns land close by Forest City's claim.

"There's no shortage of land. Everyone is taking up positions. It's a clean slate," the source says. "Everyone is gunning for the big deal because they're trying to get the tenants on their site."

The boundaries of the metroplex stretch farther and farther with each passing year, converting long-time boondocks into high-growth pockets to support in-migration and immigration trends. If the 380 corridor lives up to its expectations, it will be the next regional retail destination in the far northern suburbs, Gandy says, pointing out that Frisco North is a logical second location for Frisco Bridges' retail population.