South Main: Long-neglected corridor now center of developer interest

By March 10, 2015Uncategorized

From the Fort Worth Business Press by Scott Nishimura

The bland old storefronts at 125 South Main St. – where the W.A. Powers Co. has sold conveyor parts for more than 75 years, since before Fort Worth’s Near Southside bore that moniker – aren’t giving any hints of what’s about to happen to them. Lori Powers Henderson – great great niece of W.A. Powers – last year converted one of the family’s warehouses around the block into her family’s home. Next, she plans to begin working on the four connected storefronts, restoring doors, windows and awnings and adding lighting, and getting empty bays next to the conveyor store – still run today by her father and uncle – ready to lease. Hers isn’t the only plan bubbling on South Main. With the city’s impending launch of an 18-month reconstruction of the street between Vickery Boulevard and West Magnolia Avenue into a pedestrian and bike-friendly strip meant to attract residents, shops, restaurants, entertainment venues and other businesses, numerous plans for redevelopment of old buildings and vacant lots are emerging from the drawing board.

“We want to have these buildings ready to lease about the same time the streets are finished, or close,” said Henderson, who has been talking to the owner of the neighboring Stir Crazy Baked Goods, a popular bakery that opened in 2012, which has outgrown its space and is looking for larger quarters in the up-and-coming district. The increased interest in the street has already pushed up property values and rents on South Main in the last few years, just as the nascent revitalization gets moving. Businesses and developers have been seeking a toehold on South Main, with the Near Southside’s popularity filling up West Magnolia and boosting values and rents there. A small cluster of businesses and mixed-use development – dubbed “pioneers”by people interested in the street – popped up in recent years on the north end of the South Main corridor near Vickery Boulevard, and have been waiting for the Near Southside’s gentrification to continue to push their way.

The corridor has long been dotted with a hodgepodge of uses, vacant lots, deteriorating buildings and wide, ugly streetscape. Two anchor projects that are underway on the west side of the South Main-Pennsylvania Avenue intersection – the midpoint of the street between downtown and West Magnolia – have helped spur optimism: the Victory Medical Center hospital and 227-unit HighPoint apartment development being built onto the facade of the historic Coca-Cola building.

Robbie Werner, a first-time business owner who opened Stir Crazy with her husband at 106 E. Daggett, isn’t that worried about moving in the middle of the street construction project. “We needed a new shop yesterday,” she says. When Werner opened the business, custom orders and special events helped smooth out inconsistent walk-in business. But with South Main having a higher profile, she’s getting more traffic from health care workers, nearby major and smaller employers, theater-goers to Amphibian Stage Productions on South Main, and Fort Worth Bike Sharing, which put a station in front of her store.
She’s expanded her sweets menu to include quiches, other savories and soups, and the three segments of her business are roughly equal today, she said. In a new location, Werner said she wants to double her current seating capacity, now at eight chairs inside and one exterior table. Paying about $14 per square foot in rent now for a 500-600-square-foot space, and unable to expand in her current location, she thinks she can afford the $18 that Henderson is contemplating charging. “It sure beats $22, which is what I’ve been quoted” elsewhere on the street, said Werner, who likes the idea of being on South Main instead of being just off it. She noted rents at Magnolia a few years back are about double what she is currently playing.

Henderson’s family owns 12,000 square feet in the South Main storefronts, including the space the conveyor business operates. She plans to revamp the entire facade at the same time, and will initially renovate 5,000 square feet of the interior space for lease. Once her father and uncle decide to retire from the conveyor business, she would renovate that corner space at Main and Daggett for a retail or restaurant lease. The conveyor business also owns a small parking lot off of South Main that Henderson believes the tenant restaurants could potentially use as an exterior space, and a large warehouse adjoining the parking lot on Bryan Avenue. The warehouse will likely be the last piece in the block that she would look to redevelop. “We need to figure out when this project starts what’s really needed here,” said Henderson, who is buying the properties from her father and uncle. “What is this area going to look like in five years?” She and her husband, who both sell surgical implants, seeded their Fort Worth ventures with the sale of their home in Dallas, Henderson said, and have also formed a relationship with Southwest Bank, which has backed numerous projects on the Near Southside. The properties are in one of the city’s neighborhood empowerment zones, which has allowed waivers of fees to the couple. On the south side of Daggett at Bryan, the couple owns a vacant lot that Henderson said they’ll one day develop into mixed-use. In the interim, they’ll convert it to a parking lot for South Main patrons to use while the street construction is ongoing.

Recreation Building

At the northeast corner of South Main and Vickery, businessman Tom Reynolds, a partner in the groundbreaking Supreme Golf Warehouse and Sawyer Grocery mixed-use projects and Miller Lofts rehab in the South Main corridor in the last several years, is developing plans for the two acres he owns. That includes the historic Fort Worth Recreation Building on Vickery that Reynolds bought in 1997, a 6,700-square-foot former grocery store at the corner, and two vacant lots. Reynolds has said for years he wants to turn the 18,000-square-foot recreation building, which Fort Worth built in 1927, into a center for corporate parties, weddings, performances and other events, viewing a gap in the market for venues. The building is well-situated at the entry to downtown and across from the T&P rail station, the main Trinity Railway Express terminus downtown and future launching pad for the downtown-D/FW Airport TexRail commuter rail line, due to open in 2018. The Fort Worth Housing Authority, Fort Worth Transportation Authority (The T), city and Fort Worth South economic development nonprofit are also teaming up on a planned 10-story, mixed-use residential and commercial complex on The T parking lot that the Housing Authority recently sent out requests for proposals to developers for.

Reynolds said he would build surface parking on the vacant lots between the recreation building and South Main, or look to develop a mixed-use project with a parking garage, and may ask the Near Southside tax increment finance district for help as he develops his plans. As development ensues in the city’s South Main Urban Village, which stretches from Interstate 30 to south of Pennsylvania, parking is expected to be at a premium. “The time is really now,” Reynolds said. Around the South Main-Pennsylvania intersection, other potential developments have emerged around the Victory and HighPoint developments. At 710 South Main, the owner, All Needz Plumbing, has entered into a contract with a group to redevelop the building into mixed use, with 9,500 square feet of ground-floor retail and 18 apartments on the top two floors. All Needz would contribute the building to the development partnership and be a partner, Will Northern, the broker representing the group, said. Whether the project gets going soon depends on whether it can secure retail tenants for the first floor, Northern, who has just begun marketing the property, said. The target: a 9,500-square-foot boutique grocery store. They are marketing it at $20 a square foot, triple net or plus taxes, insurance and maintenance.Northern is pitching the number of commuters who will be driving up and down South Main. “The commuters aren’t there now, but once South Main gets completed and some of these [developments] come on line, the commuters will be there,” he said.

Anderson Furniture site

On the east side of South Main at Pennsylvania/Hattie Street, the Prime Advantage Equities group plans to redevelop the historic Eagle Steam Bakery/Anderson Furniture site into at least two floors of mixed-use, including retail and restaurants on the ground floor and offices upstairs.The building, if two stories, would be 17,000-18,000 square feet, John Dancer, the developer, said. The group plans to retain about 8,000 square feet of the existing 12,000-square-foot structure, he said.“We’ve had quite a bit of interest from restaurants and a couple of banks” that would open a small branch, Dancer said. The developers designed the space for the Cane Rosso pizza restaurant, but lost that tenant to West Magnolia because of the schedule for the South Main project, Dancer said.

The group, which has brought in the Fort Worth consultant Phillip Poole to help design the project, has its financing together, but may approach the Near Southside TIF for help in planned streetscape improvements, Dancer said. Prime Advantage is also considering redesigning the project and adding a third floor to boost square footage and revenue, with the rise in property values, Dancer said. Also on the east side of South Main and south of Cannon Street, longtime property owners Linda and Richard Claytor secured a rezoning March 3 that increases the maximum mixed-use density allowed on 2.14 acres of their holdings. Zoning commissioners and the City Council approved the case in 9-0 votes. It’s not clear what the Claytors – Richard Claytor co-founded the Fort Worth-based Fresnel Technologies, a leading maker of molded plastic lenses and related optical components – plan. The couple last year listed 4.5 acres bounded by Cannon, Crawford and Dashwood streets and Bryan Avenue for sale, and the listing remains active at an unspecified asking price. Real estate people say the Claytors are asking in the mid-$20s per square foot in a sale. Linda Claytor told the Business Press the couple isn’t ready to discuss its plans yet.

As interest in the street has built, bargain real estate and low rents have also vanished, but they continue to be lower than those on Magnolia, real estate people said. Northern recalls he did land deals at $18 per square foot on South Main in recent years, and now is routinely seeing asking prices of between $30-$40 per square foot. A small parcel near the southeast corner of South Main and Vickery, for example, is for sale at $35 per foot. “Nobody’s giving away property around here,” said Andrew Blake, a Fort Worth developer who is co-developing an 8,600-square-foot creative office space in a historic manufacturing building at 916 Bryan with partner Dak Hatfield, another longtime Fort Worth developer.

Supreme Golf

Eddie Vanston, a developer who has led partnerships in the Markeen, Leuda-May, Miller Lofts, Sawyer Grocery and Supreme Golf Warehouse apartment and mixed-use redevelopments in the last 15 years, recalls paying $4-$5 per square for lots. Vanston says his partnership, for one, paid $1.5 million for the Supreme Golf Warehouse, which they redeveloped to include a public relations firm, architects offices, loft apartments, Fort Worth Bike Sharing’s offices and the Shipping & Receiving bar. It put $3 million into the redevelopment. “You can’t buy a building here anymore for that,” he said. The upward momentum means it’s more difficult for smaller projects to get off the ground, and for smaller developers to do them, he said. “A two or three-story deal may not make sense,” said Vanston, who said he’s now looking outside the South Main corridor for his next projects. “And certainly the density is going to have to go up to justify the expense.” Vanston, a native New Yorker, says that’s typical for such districts, “which may not be a bad thing,” he says.

During a panel discussion at Fort Worth South’s annual meeting, Vanston worried that South Main’s original pioneers are being priced out of the district. The tax increment finance district’s contributions to projects have ultimately helped inflate real estate prices, and the TIF should be wary of that, Vanston said. He also said the city should continue to aggressively pursue affordable housing components in residential projects that receive public money, to ensure a diverse community. The building on the T lot would have a 51 percent affordable housing component, which makes the project tax-exempt. The city’s incentive deals for residential projects require a set aside of 20 percent of units to tenants making 80 percent of area median income or less. “I’m a huge fan of what the city has done with affordable housing,” Vanston said.

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