Wrecking ball for the Tandy Mall???
 

Wrecking ball eyed for Tandy mall
Kerry Curry Staff Writer

DOWNTOWN FORT WORTH -- Preliminary plans to redevelop the Charles D. Tandy Center in downtown Fort Worth involve demolishing the Fort Worth Outlet Square mall and putting up a parking garage in its place.

Other options on the table include a mixed-use development that could include condominiums, a satellite college campus and a grocery store to serve downtown residents.

The PNL Cos. is exploring a variety of alternatives for a $30 million to $50 million redevelopment of the four-block, 1.2-million-square-foot property, which it bought in December from Radio Shack for "under $30 million," said David Porter, president of Dallas-based PNL.

It has plenty of time to decide. Radio Shack will continue to lease the space for three years until its new corporate campus is built several blocks to the north.

PNL's initial renderings show the possibility of office or residential space built above a three- to four-level garage situated between the two towers where the outlet mall sits. One rendering shows the possibility of reopening two streets along each side of the mall that were closed when the property was initially developed.

John Gilbert, executive vice president and chief operating officer at PNL, said the company will also approach colleges and universities such as Tarrant County College and Texas Christian University about establishing a downtown campus at the Tandy Center site.

Yet another option includes exploration of a small grocery store of about 20,000 square feet.

PNL will retain the two 1970s-era office towers once Radio Shack vacates them, though it is contemplating converting one into apartments or condominiums, said David Porter, president of PNL. PNL has even considered obtaining room service for the conversion from the Renaissance Worthington Hotel across the street, which is joined to the former Radio Shack property via a skybridge.

If it attracts a major new tenant from outside the area or from nearby suburban markets, however, PNL could decide to keep both towers as office space, Porter said.

The current office portion of the Tandy complex is about 893,000 square feet, or roughly 15% of Fort Worth's total Class A and Class B office market in the Central Business District. In terms of historic absorption levels downtown, this is potentially more than five years of supply, Porter said.

Jack Huff, a principal with NAI/Stoneleigh Huff Brous McDowell, said the overall office occupancy downtown is 94%, with Class A space 98% occupied. Class A rent is $21.50 a square foot and Class B is $16.19. The Tandy towers, considered Class B space, could be upgraded to B plus or A minus with some renovation, Huff said.

Besides Radio Shack, Fort Worth's CBD also faces the exit of Pier 1 from downtown's City Center towers, which will put an estimated 180,000 square feet on the market in 2004. Like Radio Shack, Pier 1 recently bought land to build its own corporate campus along the banks of the Trinity River.

A group of downtown stakeholders will meet with the Fort Worth Chamber of Commerce this month to talk marketing strategy for the central business district's office sector in the coming years, said Bill Thornton, president of the Fort Worth Chamber.

"We are going to try to be proactive, to effectively market to keep the occupancy where it is," he said. "We think this is a wonderful time for our downtown, and what a great story to package and market."

Cowtown roots

PNL, meanwhile, is using this time to get involved in Fort Worth, recently joining groups such as the chamber and Downtown Fort Worth Inc.

Viewed by some as mostly a Dallas company, PNL has a Fort Worth history. PNL, short for "profit and loss," was formed in 1993 to acquire and manage underperforming commercial mortgages and problem real estate assets. The company was based in Fort Worth until 1999 when it moved to downtown Dallas, Gilbert said. Porter, however, still lives in Fort Worth.

Its name stems from the charge-offs that it initially purchased, which were called P&L's by the banks that charged them off against their profit-and-loss statements. To date, PNL has acquired more than $1.5 billion in book value assets in more than 35 states and Canada.

Its most notable property in the Metroplex is the 2,300-acre masterplanned Mountain Creek project in southwest Dallas. It has sold off portions of Mountain Creek to developers such as Panattoni and Ryland Homes. The property is held in a public/private joint venture with the FDIC.

Ken Devero, president of Downtown Fort Worth Inc., predicts the former Radio Shack property will become a mixed-use development with a housing component. He said he'd also like to see PNL retain some street-level retail space.

PNL's major hurdle in redevelopment will be providing adequate parking, Devero said.

PNL plans to retain an existing parking garage at the Tandy Center, but believes additional parking will be needed, because the current ratio of spaces to square footage is less than 1 space per 1,000 square feet, far below the 3 spaces per 1,000 square feet often found in suburban office properties.

Besides its parking garages at the Charles D. Tandy Center, Radio Shack has been using a surface lot with 3,000 parking spaces at the site where it will build its new corporate campus -- parking spaces that won't be available to PNL. Kay Jackson, a Radio Shack spokeswoman, said Radio Shack hasn't decided yet how it will configure parking on its new campus site and doesn't know if it will incorporate any public parking.

Porter and Gilbert said they plan to work closely with the city, chamber and Sundance Square as they explore options in the coming months.

Fort Worth Mayor Kenneth Barr is among those being kept up to date on PNL's plans.

"We are very optimistic that they can research the market and determine the highest and best use," Barr said. "I think the property is very valuable property. It sits on a key location."

Contact DBJ writer Kerry Curry at kcurry@bizjournals.com or (817) 837-1082 ext. 13.