'Worst building' eyed for park
Razing liquor-store property called 'poster child for eminent domain' would solve big Dallas problem, critics say
Christine Perez Staff Writer
DOWNTOWN DALLAS Smack dab in the middle of three of the swankiest office towers in the Central Business District here Thanksgiving Tower, 1700 Pacific and Bank One Center sits an old, nearly abandoned office building with a liquor store on the ground level.
For years, owners of the surrounding skyscrapers have complained about the building at the intersection of Elm and Ervay streets, saying the store there attracts vagrants and drives down property values. "It is a blight on the city and it needs to go," said Don Dowell, leasing manager of Bank One Center for Trizec Properties Inc.
The landlords, separately and as a group, repeatedly have approached the property's owner, Harold Collum, about buying the building, but the parties have never been able to come to terms on price, Dowell said. The Dallas Central Appraisal District puts the property's value at $451,140; Collum has been asking for $3.75 million.
Now, though, the landlords have a new ally in Dallas Mayor Laura Miller, who has dubbed 211 N. Ervay "the poster child for eminent domain."
"All the homeless come in and congregate at this place," she said. "It drives all the folks in downtown Dallas crazy. I've talked to the downtown property- management organizations, and they say this is the worst building."
Miller wants to demolish the 19-story, 190,000-square-foot structure and replace it with a city park. Acquiring it through eminent domain, she said, would "solve a serious downtown problem."
"It buys a building at market value, whatever market value the commissioners decide should be paid for the building," she said. "It then becomes a public-purpose property, a city-owned park with a long-term ground lease, with the surrounding property owners maintaining it as a public space."
The demolition of 211 N. Ervay was not part of the interim report presented to the Dallas City Council Dec. 2 by the Inside the Loop Committee, a group Miller appointed to come up with a physical plan and revitalization strategy for downtown. Those plans call for a 4.7-acre park called Commerce Garden to straddle Commerce Street between Harwood and St. Paul streets, along with a 61-acre "Emerald Bracelet," or greenbelt area, immediately inside the freeway loop.
Dowell said a city park is the only viable alternative for 211 N. Ervay, which hasn't had an office tenant in more than a decade.
"There is no parking associated with the building, and no possibility of having any parking because it is landlocked," he said. "With no parking, it won't work as office or residential, and it's too narrow to work as a parking garage because the turning radiuses are too tight."
'Inundated with calls'
Built in 1958, the turquoise-and-white 211 N. Ervay once was home to Northwestern National Life Insurance Co. of Minneapolis. It stood alone at the northwest corner of Elm and Ervay streets until the 50-story, 1.4 million-square-foot Thanksgiving Tower went up in 1982.
At that time, 211 N. Ervay was owned by an investment group led by Wayne Swearingen, former chairman of Swearingen Co. He said the developer behind Thanksgiving Tower expressed an interest in buying his property to build a larger parking garage, but didn't want to pay his asking price. Representatives from Thanksgiving Square also called on Swearingen to tear the building down.
"They said it was casting shadows on their flowers," he said.
Northwestern National Life bought the property in 1986, selling it six years later to longtime Dallas real estate investor Collum, who bought it on behalf of his children. He has not been able to find an office tenant since acquiring it, but the 10,000-square-foot ground floor is fully leased to the liquor store, Haste Beverage, and three other small retailers.
Collum acknowledged ongoing problems with vagrants taking up occupancy in the building and hanging out in front of the liquor store. He hasn't talked with Miller yet, he said, but added that the idea of a park "makes a lot of sense."
Ground-lease issues have made it difficult to find a buyer in the past, Collum said. He acquired full use of the 50-foot-by-200-foot lot about eight months ago, and has been aggressively marketing 211 N. Ervay since. He said he is eager to sell the building but wants to get fair market value. Last week, he slashed the sales price from $3.75 million to $2.75 million, or about $14.50 per square foot.
George Roddy, owner of Dallas-based Roddy Investment Services, said the true value probably lies somewhere between Collum's revised asking price and the Central Appraisal District's assessment of $451,140.
"Over the past several years, buildings in the same area and of the same vintage have sold in the $14- to $15-per-square-foot range, with some going for as high as $22 to $35 per square foot," he said. "Looking at the purchasers, though, most were users. The problem is, with an overall vacancy of 72% and a Class C vacancy of 41%, the market cannot support this property coming back online as an office building.
"Looking at it strictly from a land-value perspective," Roddy added, "confirmed sales in the area range from $35 to $70 per square foot, which would put the value (of the 10,000-square-foot lot) at under $1 million."
Collum said an e-mail blast that recently went to 50,000 potential investors had generated a good response, with most potential buyers looking at converting the office tower to apartments or condominiums.
"I have been inundated with calls and have been doing a lot of showings," he said.
Thanksgiving Tower, which sits immediately west of 211 N. Ervay, would reap the most benefits from the project's redevelopment. A partnership between New York-based Morgan Stanley Real Estate and Dallas-based Macfarlan Real Estate Services paid $95 million for Thanksgiving Tower in 1999.
Keith Waggoner, chief operating officer at Macfarlan, said his company will support any plan that turns 211 N. Ervay into a productive piece of real estate including helping to subsidize a city park.
"There's no question it would be a bonus for us to have a park next door," he said. "At the same time, putting residences next to Thanksgiving Tower would help make the area more vibrant, too.
"I think we will see something happen with the property over the next year," he added. "Either Collum will find a buyer or the city will take it. We will cooperate with whoever takes control."
Contact DBJ writer Christine Perez at email@example.com or (214) 706-7120.
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