The ambitious plan to revitalize Dallas’ tallest tower, the Bank of America Plaza, has gained unanimous support from key stakeholders, albeit with several important concessions.
Developers Mike Hoque of Hoque Global and Mike Ablon of PegasusAblon are steering the project under the newly formed entity, 901 Main PAHG Partners, LLC, with Ablon as its registered agent.
The developers have proposed a $409 million redevelopment plan to transform the iconic 72-story tower, which is facing a significant vacancy following the planned departure of its primary tenant.
Ablon made his pitch during a joint meeting of the Downtown Connection Tax Increment Financing (TIF) District and Downtown Dallas Development Authority (DDDA) on Tuesday.
The boards endorsed a proposal for a $98 million incentives package that will support the redevelopment, but there was significant negotiation over aspects of the plan, particularly regarding the parking garage.
In a bid to reach a compromise, the boards recommended an additional $5 million be set aside to accommodate various requested modifications to the garage design.
“We’re trying to go all in,” Ablon stated confidently during the meeting.
This redevelopment plan comes during a challenging time for Dallas, as the downtown area faces a critical office space vacancy rate of 27.1% in 2024, substantially higher than sub-20% rates in other neighborhoods like Uptown.
The pandemic and a rise in remote work have contributed to this situation, leading the city to prioritize the revitalization of downtown through various initiatives, including the development of a new convention center just south of the Plaza.
Ablon emphasized that the goal of the redevelopment plan is to create a viable office space, stating, “Now we’ve created an office building that is actually leasable.”
The comprehensive redevelopment plan includes several key components:
– Reducing the office space from 1.8 million square feet to 1.5 million square feet.
– Converting and adding 280 new rooms for a four-star hotel or higher, along with hotel amenities.
– Constructing a new adjacent glass and steel building to serve as the hotel lobby and ballroom.
– Developing a new 1,115-space parking garage on the site of a current surface lot across the street.
– Connecting these new structures with a skybridge spanning Main Street.
– Incorporating street-level retail and restaurant options.
While members of both the TIF and DDDA boards expressed enthusiasm for the redevelopment plan, they raised concerns regarding the incentives package.
DDDA Vice-chair Billy Prewitt, who also recently became the CEO of Pacific Elm, highlighted a potential risk of subsidizing tenant improvements and leasing commissions, warning that it could disrupt equal conditions for different developers in the area.
Despite these concerns, they managed to overlook the issue as a potential hurdle, alongside skepticism about the budgeted $172 million valuation for Bank of America Plaza.
Their primary apprehension revolved around the proposed parking garage, as members felt it conflicted with the Downtown Dallas 360 Plan’s focus on enhancing mass transit and diminishing reliance on passive-use structures like parking garages.
Ablon assured the boards that there were plans to make the parking garage more versatile, allowing for the addition of residential or office space in the future.
However, he requested that this flexibility not be made a formal requirement in the incentives deal, expressing concern that additional stipulations could hinder project execution.
As tensions rose during the meeting, it appeared that approval for Ablon’s proposal was in jeopardy.
In an effort to avoid a potential disapproval record, he sought the option to table the meeting.
Had the TIF and DDDA boards withheld their endorsement, it could have tarnished the project’s reputation as it moved to the city council.
Ultimately, after much negotiation, Prewitt motioned to approve the incentives package, which included the additional funding for the parking garage’s future utility.
The amendment stipulated that the garage must be designed to support the potential construction of 200 residential or hotel units above it, thus maintaining flexibility for future development.
“We just want to ensure that we’re not boxed out from ever having something on top of the garage,” Prewitt remarked.
This approval marks a key step as the project moves ahead, with the city’s economic development committee set to consider the plan on October 6.
Following that, public comments and a vote on the incentive plans are scheduled for October 22 at the city council meeting.
Obtaining these approvals is vital for 901 Main PAHG Partners, as a looming property acquisition deadline of September 30, 2026 dictates the urgency of their efforts.
The development team has projected a timeline where they can achieve certain milestones annually, aiming for substantial completion by September 30, 2032.
For those watching the project, the next significant reveal will be which four-star or higher hotel will occupy the newly redeveloped Bank of America Plaza, with 901 Main PAHG needing to secure this tenant before the acquisition deadline next year.
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