News Article | 12/29/2006

Woods takes Victory Park to new level

Jonas Woods may be the most successful business executive you’ve never heard of.

Despite his low profile, the 36-year-old president of Hillwood Capital is the driving force behind Victory Park, the massive development surrounding American Airlines Center in Dallas.

After a couple of false starts, the $3 billion project began to flourish in 2006, with the W Dallas Victory Hotel and other Phase Two components opening up, and Phase Three, including a 20-story office tower, kicking off. Because of his success with Victory Park, Woods has been named the Dallas Business Journal’s Business Person of the Year for 2006.

The 75-acre development off Woodall Rodgers Freeway links Uptown and downtown Dallas. At full build-out, it will contain 4,000 residences, several top-of-the-line hotels and 4 million square feet of office and retail space — leased to ├╝ber-cool tenants such as Ghostbar, N9NE Steakhouse, Kenichi, LFT and Oakville Grocery.

Ross Perot Jr., the famous son of an even more famous father, is the owner of Hillwood and the public face behind Victory. Besides providing millions in development funds, he also came up with the original vision for the project. But Perot has relied on Woods to make it all happen.

So, how did the wunderkind get involved?

Like so many things in Texas, it all comes down to football.

In 1994, a year after graduating from Southern Methodist University, Woods got talked into coaching a YMCA youth football team by a buddy of his. The friend was doing an internship at Hillwood, and his boss, Frank Zaccanelli, had a son on the team.

Zaccanelli, former Hillwood CEO, took a shine to Woods, who had begun working in finance at what’s now Bank of America. Hillwood was about to get aggressive with real estate acquisitions, and Zaccanelli needed some help with underwriting. Woods joined the firm in May 1994, about a month before getting married.

For the first year or so, he primarily worked on acquisitions, snapping up distressed Resolution Trust Corp. and Federal Deposit Insurance Corp. properties on behalf of Perot. He quickly impressed his new boss and, in 1995, was shifted to Alliance, Hillwood’s 17,000-acre industrial park in North Fort Worth, which was just beginning to gain momentum.

Around that time, Perot began to explore the possibility of doing a large-scale urban project in Dallas. He wanted to kick it off with a sports arena, which he saw as a catalyst to lure tenants. Problem was, he needed a team. After a failed bid to buy the Dallas Stars, Perot worked out a deal to buy the Dallas Mavericks in June 1996. Woods, at the age of 26, was named CEO of the NBA team.

“It was real clear my responsibilities were not to include basketball,” Woods says. “I’ve always been a numbers guy, so I focused on financial operations and advertising for about three months, until the new management team was in place.”

It took five long years to get American Airlines Center built. The odyssey included contentious battles for public support and economic incentives, as well as a complicated environmental clean-up of the property. Previously, the site was an abandoned rail yard that housed an aging power plant.

During this time, Woods focused mostly on venture capital initiatives for Hillwood and expanding its real estate portfolio. In 1999, after Zaccanelli left the company, Woods took the reins at Victory.

New York-based Related Urban Development was brought in as a development partner. Plans for towering office buildings, hotels and retail shops were announced with great fanfare. Then, Dallas lapsed into an economic downturn after the terrorist attacks of 9/11 and the subsequent tech and telecom wreck.

Many in the real estate industry began to express doubts about Victory and wonder if it would ever get off the ground. The situation worsened when Related pulled out of the project in late 2002.

“It was not a fun time,” Woods says. “We had put a lot of time and effort and significant investment into Victory. We didn’t know what the next step was going to be. We didn’t know if we should mothball the land around the arena and wait for another day, consider another partner like Related, or start over with a completely different plan.”

‘Outsourcing cool’

Things changed during the week between Christmas and New Year’s in 2002, when Woods got a phone call from the director of development at W Hotels. He told Woods the W was still coming to Dallas, and asked if Hillwood would be willing to build the hotel, even without the other Victory components. Woods spent the next couple of weeks crunching numbers, then took a proposal to Perot.

“Let’s build the W Hotel and figure the rest out later,” he said. “We can’t lose this.”

Perot was on board.

The Dallas real estate market was still in a slump, but new plans were drawn up for other Phase two components (American Airlines Center is Phase one), including two office buildings totaling 155,000 square feet, three buildings providing more than 600 residential units and 317,500 square feet of retail space.

This time around, though, the tenant mix would be less traditional.

“We decided to go after retailers like those found in SoHo and on Melrose in Los Angeles,” he says. “We wanted something more fashion-forward and urban in nature, non-mall tenants, more edgy type of brands.”

Perot says he decided to “outsource cool” to Woods.

“Jonas is young, and he’s leading a young team,” he says. “They’re plugged into what’s going on with style and entertainment in the United States and around the world. Jonas defines that demographic.

“I don’t consider myself old, but I learned from my father how important it is to surround yourself with young people,” Perot says. “They’re creative and full of energy, and they don’t know what they can’t do. That’s a very important concept. Young people can push an organization, if the organization is responsive enough to young, creative ideas. Victory is a classic example of that.”

With the W Hotel setting the tone, Woods secured the interest of N9NE Group, which has committed to bringing four of its hot concepts to Victory: Ghostbar, Nove, N9NE Steakhouse and LiquidSky.

“There were a lot of sleepless nights at first, but the momentum is growing to the point where it’s almost impossible to keep up with the opportunities,” Woods says. “The masterplan calls for 30 buildings, and we’ve broken ground on 10, so we’re exactly at the one-third mark.”

Woods credits his team with the success of Victory, but Perot points out that it was Woods who put the team together.

“It’s his passion,” Perot says. “He believes in Victory, and he believes in Dallas. That’s how he has been able to attract so many great partners to the project. People like to be around Jonas. He’s financially bright but also has a great personality and is an inspiring leader. He’s optimistic; a visionary.”

The latest tenant to sign on at Victory isn’t a restaurant or retailer but the law firm Haynes & Boone, which is moving out of the Dallas central business district to take 175,000 square feet in One Victory Park, a 20-story office tower scheduled for completion in 2008.

Complete package

With his boyish appearance, unassuming demeanor and unruly curls, Woods doesn’t give the immediate impression of a major power broker. But pulling off what he has achieved, especially at such a young age, is a “stunning, stunning achievement,” says Mark Gibson, managing partner at Holliday Fenoglio Fowler.

“Negotiating the land agreements for American Airlines Center, working out complicated zoning issues with the city of Dallas, getting citizen support for the project, then going out and recruiting best-of-class tenants — all of that takes an incredibly well-rounded person,” he says. “You have to be an unbelievable communicator, a strong visionary and have a great economic and financial mind, and Jonas has all of those qualities.

“Most people in Dallas don’t realize the true potential of Victory,” Gibson says. “It’s huge for the city of Dallas and will be a transforming development for many reasons.”

Preliminary studies show that American Airlines Center and Victory are exceeding expectations. According to a report by the Plano office of Conventions, Sports & Leisure International, the project will generate $1 billion in cash annually, more than $250 million more than was originally projected. By 2009, the project will create 11,000 full-time, permanent jobs, nearly 3,000 more than expected. The city of Dallas, which spent $137 million on the project, stands to see a 48% profit on its investment.

Linda Burns, director of economic development for the Greater Dallas Chamber, says Victory has already become a huge corporate retention and recruiting tool.

“The return will far exceed the city’s initial investment,” she says. “Look at the impact the project is already having on Dallas. What Victory is doing is bringing critical mass to attract people downtown — residents, tourists and businesses. It’s a tremendous catalyst.”

Woods and Perot have plans to take the Victory concept and duplicate it, albeit on a smaller scale, in other cities around the world. But first, Woods will be making another move, this one closer to home.

In January, he and his family will join Perot and other Hillwood executives in taking up residence at the W.

“I’m doing it so I can see what works and doesn’t work,” Woods says. “Nothing can replace first-hand experience. To really know what’s going on, you have to live it yourself.”