(Read more on the multifamily market.)

DESOTO, TX-The City of DeSoto and Trammell Crow Co.’s High Street Residential broke ground yesterday on DeSoto Town Center, a pedestrian-oriented, mixed-use development going up on a former shopping center parking lot. Construction on the $30 million project, a public/private partnership between the city and High Street, is set to begin Jan. 1, with completion targeted for spring 2009.

According to High Street managing director Art Lomenick, DeSoto Town Center will offer a high-density, village-type environment that provides an alternative to the typical suburban pattern. “Our company has had a business plan to work with municipalities that are trying to build less auto-dependent environments,” he says. “DeSoto is a very progressive community. Those are places we like to try to partner with.”

The six-acre project at Pleasant Run Road and N. Hampton Street will have nearly 38,000 sf of retail space, 136 one and two-bedroom apartments, a small amount of office space and a 360-space parking garage. New construction will be integrated with DeSoto’s existing municipal center, which replaced the former strip shopping center for which the current project site provided parking. The civic center includes city hall, a conference center and library, an amphitheater, an indoor performing arts center and a fitness and recreation facility.

The city owns the land under the project and has given the developer a 99-year ground lease. Lomenick says the city will also contribute $8 million to pay for streets, sidewalks, plazas and other public infrastructure. The land is valued at $2.5 million.

“They’re contributing the money because they felt they needed building types that were high density, and normal market conditions wouldn’t justify the costs,” he tells GlobeSt.com. “Cities need to have this kind of long-term vision. They see the project as a catalyst, a building type that will be even more appropriate 10 years from now.”

Lomenick says DeSoto is following the lead of a growing number of US communities in recognizing the need to shift toward less dependence on the automobile. “We believe development patterns around the US are shifting dramatically. We’re definitely a part of that, with our focus on building transit-oriented, mixed-use projects,” he says.

The Trammell-Crow executive considers DeSoto’s commercial and residential markets both very strong, particularly for this type of development. “There’s definite market demand for the product types were introducing, but it doesn’t exist there now. It’s a niche market but a solid one,” he says.

Company brochures indicate apartments in the project, the first of which should be ready for move-in by late 2008, will rent for $800 to $1,300 a month. David Copeland with CB Richard Ellis in Dallas is handling the commercial leasing.

DeSoto Town Center project is the first of three so-called catalyst projects designed to revitalize the surrounding area, as recommended in a 2005 study by RTKL. The other projects are Central Park, which will include open space and townhomes, and Belt Line Village, which will feature a mix of restaurants, retail and residential uses.

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