The Next Little Thing


When Michael Harrity opened his store in the Bishop Arts District 12 years ago, he didn’t have many neighbors. Harrity, a former present of the district’s merchants association, can still tick them off: A couple of restaurants, a coffee shop that is long gone, a hair salon. Today, his Bishop Street Market is one of dozens of shops and stores in that part of the neighborhood, from high-end restaurants to galleries to a spa.

“It’s like watching yourself age in the mirror,” Harrity says. “You don’t really notice it until you step back and look at what’s happened, because you tend to forget what it was like when you started.”

There have been quite a few pleasant surprises in retail development in Oak Cliff in the past decade. Talk to big-time developers, and they’ll tell you the neighborhood may well be the next hot spot in Dallas. They cite improving demographics and density and a favorable development climate, fueled by people moving back to urban neighborhoods like Kessler Park and Winnetka Heights, which is part of the national, in-town living trend.

But that doesn’t mean quality retail is going to show up next week, next month or even next year. The recession, and the credit crisis that caused it, has all but dried up lending to finance new projects. In addition, neighborhood leaders acknowledge that Oak Cliff still has image problems that affect how retailers and developers in other parts of the city, state and country see it, and those demographics, though better, still aren’t comparable to other parts of Dallas.

Finally, if and when development resumes, there may well be disagreement over what Oak Cliff residents want — and whether they can get what they want. Today’s retail revival is built around local and small regional merchants. Will tomorrow bring larger regional and national chains, and does the neighborhood want the Gaps and Banana Republics that are a staple of suburban retail?

“Developers can keep expanding north until they hit the Red River, or they can start working with walkable neighborhoods with density,” says Bob Stimson, a former city councilman who is now president of the Oak Cliff Chamber of Commerce.

“We have the density, and we can attract stores here.”

Good news
A lot of developers like Oak Cliff.

“I don’t think there is a lot of surprise that people are interested in Oak Cliff,” says Vaughan Miller, who oversees retail leasing for Henry S. Miller, one of the leading independent commercial brokers in the country.
“There are only so many shopping centers you can build in Frisco.”

And, before the lenders turned off the spigot, the neighborhood was looking at several high-dollar, high-profile projects:

• The INCAP Fund, a real estate investment group that owns or has under contract more than 300 acres in North Oak Cliff. INCAP plans to redevelop the property into retail and residential mixed use, similar to projects in the Pacific Northwest that emphasize quality and sustainability, says Brandon Bolin, INCAP’s acquisition and disposition manager.

• The Oaxaca Interests project at Sylvan and Fort Worth, with plans to replace the Alamo Plaza Hotel and surrounding properties with 30,000 square feet of residential and retail, including a grocery store.

• Cienda Partners, which bought the eight-acre mobile home park at 400 W. Commerce and is trying to figure out what to do next. Cienda helped build the 300-home Greenleaf Village in 2002 in West Dallas on the site of an old housing project.

• La Reunion Town Center near the Home Depot on Fort Worth, with plans to eventually build almost 1,000 homes and apartments and more than 80,000 square feet of retail.

This is in addition to a host of smaller, more neighborhood-scale efforts, like the renovation on Davis in and around the arts district, including Good Space and the La Familia grocery store, and the project at Bishop and Colorado near Methodist Hospital, overseen by Eric Berlin, who was involved in Pinnacle Park.

Back to the city
So why Oak Cliff and why now?

Much of it, say people like Miller, is that increasing numbers of developers are looking decades down the road, and that doesn’t lead them to Frisco.

“The close-in neighborhoods, like Oak Cliff, are the future,” says Robert Bagwell, who developed Uptown’s West Village. He’s one of the leading proponents of what’s called “New Urbanism”, which emphasizes retail and residential development that focuses on density in cities instead of sprawl in suburbs, and where projects are designed so people don’t need cars to use them.

Bagwell’s term is “pedestrian villages”; urban planners call the new projects “traditional neighborhood developments” because they mimic the best features of older development from 40 and 50 years ago. That means they’re often much smaller — five to 10 acres instead of hundreds, and the scale is more manageable to negotiate on foot, without massive parking lots and the stores that need them.

Areas like Oak Cliff, says Tre Jordan, a research associate with the American Planning Association, are well suited for these developments. They require an older neighborhood that is close to the city center, and where the street system was laid out before cars were commonplace and the buildings are best suited for re-developing up instead of out.

Sound familiar?

The other key? People are moving back to these in-town neighborhoods because they’re tired of long commutes and suburban sprawl, which is helping to undo the damage done by white flight 30 and 40 years ago. This, too, is true in Oak Cliff, as the increase in average home sale prices this decade demonstrates. In the 75208 ZIP code, prices went from $185,000 to $222,000, as measured by the Advocate Home Price Snapshot.

“There isn’t much future in lifestyle centers,” says Ken Hughes, a long-time Dallas developer whose projects include the Old Town shopping center at Lovers and Greenville and nationally known Mockingbird Station. “The baby boomers and the Gen Ys want something else, so development is going to be different, without a doubt.”

Another Oak Cliff advantage, Stimson says, is that our neighborhoods are working to attract development, a reversal of the usual process. Yes, Dallas’ new emphasis on what’s called form-based zoning, which reflects many of the tenets of New Urbanism, has made a difference, and the city’s enthusiasm for tax increment financing districts, which offer developers tax incentives to build, also has helped. And Oak Cliff stands to be the biggest beneficiary of the $2 billion Trinity River project, if and when its various components are built.

But neighborhood groups and organizations like the non-profit Fort Worth Avenue Group aren’t waiting on these events.

“It’s the neighborhood vision that helps the process,” Stimson says. “People have started to realize without the neighborhood taking charge, they won’t necessarily get anything that they want.”

The Fort Worth Avenue group, says president Scott Griggs, is a grass-roots organization designed to help residents bring new retail and residential development to the West Commerce/Fort Worth Avenue area. As such, he says, it’s much different from what the city usually does to foster growth south of the Trinity River.

“There’s so much planning that goes on,” Griggs says, “file cabinets and file cabinets of it. But it always focuses on the big projects. It doesn’t address organic change tha
t is close to the neighborhoods.”

Obstacles to hurdle
Yet, despite all of this, Oak Cliff still faces significant challenges in bringing quality retail to the neighborhood. Even with all the progress, there are still what residents and developers call the missing pieces: more and better grocery stores, for instance, as well as the variety of smaller, everyday neighborhood services that you see in other parts of Dallas.
 
Oak Cliff still doesn’t have the retail depth and breadth that comparable neighborhoods like Lakewood and Preston Hollow do — hardware stores or used book stores.

Developers like Bolin also cite the city’s zoning regulations, which make it more difficult to do the New Urbanism projects they desire.

“It’s poor zoning; it’s suburban zoning,” he says. “We still have to make strides to educate the city about more urban zoning.”

And, frankly, many real estate and development experts say the recession may prolong the neighborhood’s wait. If a developer hasn’t started construction yet, says Thompson & Knight attorney Misty Willcox, don’t expect to see construction any time soon.

Developers borrow money in two stages — for land and for construction. They may still be able to get land loans, though equity requirements have increased, but “it has to be a special, special project to get the interest of lenders and tenants,” Bagwell says. The one exception to this is apartment construction, which generates enough cash to meet the new lender requirements. 

In addition, the mom-and-pop retailers who should benefit from New Urbanism may not have the financial wherewithal to withstand the recession. These operations are traditionally undercapitalized and survive on cash flow. If the cash dries up, they don’t have money in the bank to pay their bills and are forced out of business.

Yet, even without the economy interfering, Oak Cliff still lags other parts of the city in income, education and the other demographics that are important to retailers and developers. In home sale prices, for example, 75208’s average price is still only two-thirds of Lakewood’s 75214 and 27 percent of Preston Hollow’s 75230. Yes, great strides have been made, but until the demographics improve even more, our neighborhood will still be seen by outsiders as something less than it is.

Finally, there is the possibility that Oak Cliff is ahead of its time. In-town development, and the gentrification that comes with it, is popular with urban planners, academics, and some developers. But it still hasn’t caught on with most developers and retailers, whether national or regional, says SMU professor Ed Fox, one of the country’s leading authorities on the retail business.

Over the last 15 to 20 years, and especially in Dallas, retail development focused on two things, he says. First, the national chains moved aggressively to eliminate small local and regional competition. That’s why we have more Walmart-owned stores than almost any city in the country. Second, developers and retailers built malls and shopping centers to stay one step ahead of where people would move, which is why there was so much retail in Frisco before people lived there.

“And they’re still going to go where the people will be, not necessarily where they are,” Fox says. “That means they’re still going to be looking north, where they’re going to see growth rates. I’m not trying to be negative, but you aren’t going to see a lot of retail inside LBJ because the retailers don’t yet see any reason to be there. They might, but that’s a long time away.”

In one respect, this may not be a bad thing. The interviews for this story were far from a statistically sound sampling, but they did detect an undercurrent of what could eventually be serious disagreement over the course of development.

Does the neighborhood want the larger regional and national retailers that come with larger development (since they’re the only ones who can afford the rents)? Will funky boutiques and fiercely independent restaurants be enough, or will residents want Old Navy and Chili’s?

In the end, though, those who are working to redevelop the neighborhood say they can’t fail.

“This is personal for us,” says Bolin, who lives in Oak Cliff (as do several other INCAP officials). “We want to make this work because we believe in Oak Cliff.”


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