FORT WORTH – The largest shopping center developer in the nation is eyeing 250 acres in a fast-growing area of north Fort Worth to build an outdoor mall.Simon Property Group wants to build west of Interstate 35W and north of U.S. 287, setting up a race for development with Ross Perot Jr.’s Hillwood company, which has several nearby retail projects on the drawing board. In a presentation this week to the Fort Worth City Council’s Economic Development Committee, Simon asked the city for $11.5 million for road improvements around the site, including a westward extension of North Tarrant Parkway through the property. Construction of Presidio Vista, which sits in a tax-increment financing district, could begin as early as this year, Simon told city officials. The first phase of the project, which would include a movie theater and at least 15 large retail tenants, would create 3,500 new jobs, the developer said. Simon, based in Indianapolis, already owns several properties in North Texas, including North East Mall and the Shops at North East in Hurst, Irving Mall in Irving and Golden Triangle Mall in Denton. “The I-35 corridor is one of the strongest, if not the strongest, growth corridors in the country,” Simon spokesman Les Morris said. “We’re working with varied department stores that expressed interest [in Presidio Vista]. The retailers see the same things we do in terms of the growth in the area and are excited to get there.” Simon’s project collides with retail projects planned by Perot’s group. Hillwood officials have announced some anchor tenants for The Shops at Circle T Ranch in Westlake, about 10 miles northeast of Simon’s proposed site. They say that work on that project, which has been postponed several times in recent years, could start as early as mid-2005. Hillwood also has plans for a large shopping complex directly across I-35W from the Simon site to front its Heritage and Park Glen residential developments. The Presidio Vista plan throws into question whether north Fort Worth could support two major projects. “Probably not at the same time,” said Mike Berry, president of Hillwood Properties. “As the market grows over a period of time, there probably would be enough critical mass created to support retail. But I’m not sure that two projects of that scale can go up” together in the near future. The Simon site is where Dell Computer once planned a corporate campus before the project evaporated when the dot-com bubble burst. Legacy Capital, a Dallas land firm, bought the tract from Dell two years ago. It now plans to sell Simon the acreage. Simon plans to invest more than $800 million in new development around the country over the next four years, most to be spent on open-air centers. The tenant mix at Simon’s outdoor malls varies. At Firewheel Town Center in Garland, scheduled to open in October, shoppers will find Dillard’s, Barnes & Noble, Old Navy and Pier 1 Imports. At The Domain in Austin, slated to open in 2007, the company is working on a master-planned community with residential units, a pedestrian promenade, a theater, and retailers including Foley’s and Neiman Marcus. Simon would not disclose the type of tenants that it wants to bring to Presidio Vista. Outdoor malls have replaced traditional, enclosed malls as the preferred format of developers around the country. Several have already sprung up in Tarrant County, including Southlake Town Square and Fort Worth’s University Park Village. “What the open-air malls are doing are creating a stronger sense of place,” said Ian Pierce of The Weitzman Group, a commercial real estate firm in Dallas. “It’s this whole trend of new urbanism.” The site picked for Presidio Vista is one of the fastest-growing residential areas of the Metroplex, said David Brown, director of the Dallas-Fort Worth region for Metrostudy, a housing analysis firm. Prospective retailers often consider the number of homes, income levels and other demographic data within a 6-mile radius from a potential site when measuring the suitability of a project, Brown said. The area around the proposed Presidio Vista site had 4,700 housing starts last year, more than the roughly 3,000 starts each in Frisco and McKinney, Brown said. And there are more to come. Metrostudy counts 26,000 lots planned around the Simon site. By the company’s estimate, the area’s population has jumped to about 180,000, up 40 percent from the 128,000 counted for the 2000 Census. “That’s an increase of about 50,000 people and that’s what attracts retailers,” Brown said. Much of the residential development was spearheaded by Hillwood, which built several planned communities in the area to complement its Alliance industrial park, where more than 20,000 people are employed. “With the kind of critical mass that has been generated through the Alliance program, the market is right for retail — significant retail,” Hillwood’s Berry said. Hillwood hopes to break ground by mid-year on Circle T in Westlake, a regional mall being developed with General Growth Properties. Foley’s, Dillard’s and an AMC cinema have committed to anchor the project. Lone Star Crossing is a planned development of hotels, restaurants and stores to surround Cabela’s, the hunting and fishing superstore that will open in May at I-35 and Texas 170. At Heritage, Hillwood plans to develop between 1 million and 1.4 million square feet for big-box retail, specialty shopping, residential units, office space and a movie theater in a village atmosphere. Hillwood and its partner on the project, Fort Worth-based retail developer Trademark Cos., have been negotiating with potential tenants but have not yet announced any deals. Berry expects Simon to court many of the same retailers as Hillwood. “Ultimately, the tenants are going to decide which project happens,” Berry said. “There are only so many merchants out there.” The city will also have a say. Simon’s proposed project sits in a tax-increment financing district that was created to fund the North Tarrant Parkway interchange with I-35W. In a TIF, the property value of a piece of land is frozen, and tax revenue generated by higher property values from new development is used to repay the costs of streets, sidewalks, sewers and other public improvements in the district. Any money generated by the North Tarrant Parkway TIF is currently slated to pay back about $5 million in loans that the city received from Hillwood and Legacy Capital. The two landowners lent the money to match state funds to speed up construction of the interchange. In its proposal to the city and the TIF board, Simon said it wants the TIF to reimburse the $11.5 million that Simon plans to spend to on roads and interchanges for the Presidio project. The TIF board meets Friday and is considering the request. But it wants to examine the potential impact on other infrastructure projects in the TIF before deciding to add Simon’s request, said Tom Higgins, the city’s economic and community development director. “We always worry that a project isn’t going to develop the way we hope it is, but the Simon request, which has not been granted yet, would have virtually no risk to the city,” Higgins said. If the TIF board approves Simon’s request, it will then go before the City Council for a vote, Higgins said. Hillwood, which has worked with Legacy Capital on thoroughfare planning and cooperative road planning, hopes the city and prospective tenants will throw their support behind the Heritage retail project because much of the needed infrastructure is already in place on the east side of I-35W, Berry said. “The city is going to win either way,” Berry said. “But if the revenue off each project were the same, and I have lots of debt service on one side and little debt service on the other side, then that tax revenue is flowing back to me a lot quicker.” Simon and Legacy began planning the project in December 2003 and have been talking with city officials for several months, said Steve Saxon, a Legacy Capital partner. Legacy Capital owns or has options on about 310 acres at and around the proposed Presidio site. The firm plans to sell 250 acres to Simon for the mall, and will find other uses for the remaining 20 percent. “The portion we would hold onto would be on Harmon Road, and we’ll be trying to plan that with Simon to make sure that it is a complementary use,” Saxon said. Staff Writers Andrea Jares, Andrea Ahles and Anna Tinsley Contributed to This Report.
News Article | 2/12/2005