Wednesday, September 16, 2009

For Dallas' Deep Ellum, hopes ride on DART

Almost two-thirds of a new shopping strip that opened last year in Dallas' Deep Ellum district is still vacant. But leasing agents aren't sweating the project's performance. Starting next week, hundreds of commuters a day will be streaming through the new DART light-rail station right next door.

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"This is what we have been waiting for," said Heather Winn of United Commercial Realty, which leases the ground-floor retail space in the Ambrose apartments on Malcolm X Boulevard at Indiana Boulevard. "We already have two retail tenants, and they are ready for the rail line to open, too."

The rail station near Baylor Medical Center is one of two DART stops opening next week in Deep Ellum – a welcome stimulus for an urban district that has seen its share of booms and busts.

Lately, most of the real estate news in Deep Ellum has been dour. A high vacancy rate for commercial buildings and failed development plans have been the norm for several years.

Leasing agents and building owners say they now have reasons to be optimistic.

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The Deep Ellum stations opening Monday are among the first of 20 stops planned on DART's $1.8 billion Green Line, which will eventually run from Carrollton to Dallas' Pleasant Grove neighborhood. The rest of the stations will be finished late next year.

The transit agency estimates that in the coming years, more than 2,000 riders a day will use the Deep Ellum station at Baylor. That flood of commuters can bring new business.

Quinton Mathews of John Bowles Co. is trying to line up tenants for a vacant commercial property at Gaston Avenue and Good-Latimer Expressway. The 5,200-square-foot building, built in 1946, previously housed an architectural firm but has been vacant for some time.

Leasing the building, which is across from the new rail stop, was tough while the street and rail line route were torn up for construction.

"We are working on a deal there right now," Mathews said. "Now that Good-Latimer is back open, we have good visibility.

"We are talking with a creative firm that wants to lease the whole building."

How far?

Despite the boost that DART will bring to Deep Ellum, Mathews still questions whether the impact will be felt blocks away from the station.

The window of an empty storefront reflects a DART train passing through Deep Ellum. Heather Winn, who is leasing out space in the Ambrose apartment building, has lined up two retailers expecting business from a new rail station.
"We are trying to do some stuff in the heart of Deep Ellum, too," he said, "but that doesn't have the momentum."

Deep Ellum also needs further public-sector investments in streets, sidewalks and utilities that serve the aging commercial buildings, said longtime district property agent Barry Annino.

"DART will not be the panacea unless the city becomes our partner," Annino said. "DART may, in fact, be the catalyst that gets the politicos to pay attention and see the opportunity."

Recent large-scale plans to redevelop parts of Deep Ellum failed when the economy tanked and real estate lending stopped.

Without new investment, Annino doesn't anticipate a quick rebound.

"Otherwise, you will see a slow grinding improvement based on market conditions, such as low rent strategic to downtown, an improving economy and developments at Baylor," he said.

Broker Jeff Swaney is trying to lease a vacant building on Swiss Avenue just yards from the new rail station.

"We'd love to put in a little sandwich shop or coffee shop – it's an incredible opportunity for someone," he said.

But he worries that the recession will make it tough to find a tenant.

"The expansion of retail has just died because of the economy," Swaney said. "The owners of that building have bent over backwards trying to make a deal, but we haven't been able to."

Parking not a worry

A couple of blocks away, at Elm and Good-Latimer, three of the four corners are vacant.

Tom Heraty is trying to find someone to lease a former furniture store that's been empty for about five years. "Everybody hopes that with this transportation hub, it will change Deep Ellum," he said.

"The biggest problem in Deep Ellum is no parking. So the train could definitely be a boost to the whole neighborhood."


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