Financing issues delay development

Posted on 29 Jan 2009 at 7:20pm
By John Wright News Editor

Developer hopes work can begin on project at Cedar Springs, Douglas Avenue by March


As one major development project on the Cedar Springs strip nears completion, another remains stalled in the financing stages, leaving two large apartment complexes vacant but still standing for almost a year.

Last week the developer of Ilume, a five-story mixed-use project southwest of Cedar Springs Road and Douglas Avenue, announced that the first phase of the project is slated to open in July, with the remainder coming on line by the end of the year.

But on the opposite side of Cedar Springs, a chain-link fence surrounds boarded up buildings northeast of the intersection, at the site of a project that was initially scheduled for completion around the same time.

The Atlanta-based Lane Co. plans a 240-unit multifamily development at the site of the old Douglas Park and 4242 Cedar Springs apartment complexes, which have been vacant since the company purchased the property and closed them in March 2008.

The company initially said it planned to begin construction last spring. But Mark McHenry, development partner for the Southwest Division of the Lane Co., in Dallas, confirmed last week that the company has been unable to secure financing for the project, which is expected to cost more than $30 million.

"I would say that every real estate project in the country right now has an issue with financing. We’re not alone in that regard," McHenry said. "It’s a good project. It’ll get built. It’s just a challenging time in the real estate market right now."

McHenry added that he now hopes the project, which is expected to take approximately 18 months, can begin by the end of March 2009.

In the meantime, in addition to fencing off and boarding up the old units, the company has hired security to patrol the 4-acre property at night, McHenry said. Last year, Dallas Voice reported that several people were still living in the complexes after they’d closed, prompting police to conduct a sweep resulting in multiple arrests for trespassing. 

"We’re trying to take all the measures we can to make sure the property is not disruptive until we get the thing knocked down," McHenry said. "We still occasionally have the random vagrant that our security cops run off, but it hasn’t come to my attention that we have an issue like we did earlier."

Mick Rossley, vice president of the Crosland Group, which is developing Ilume, said he hopes to see the vacant buildings torn down soon.

"It’s too great a piece of dirt to not eventually get developed," Rossley said. "It’s an eyesore."

The city of Dallas could try to force the Lane Co. to demolish the buildings under an ordinance enacted last year, according to Chris Bowers, first assistant city attorney.
But Bowers said that’s unlikely unless the property is creating a nuisance and the owner isn’t diligent in keeping it secure. 

"I’m not sure if we’ve yet taken any cases to the Municipal Court seeking demolition on those grounds, but we plan to use that provision," Bowers said.
 
Scott Whittall, owner of Buli Café and president of the Cedar Springs Merchants Association, said he’d also like to see the property developed. But Whittall said there are advantages to not having too much construction under way at once.

Members of the Merchants Association, made up of business owners on the strip, are still recovering from major road construction projects nearby in recent years, Whittall said. And in addition to Ilume, a large-scale renovation project is under way at Cedar Springs and Throckmorton, in the building that once housed Crossroads Market.

"I just think it needs to happen a little at a time," Whittall said. "Obviously in the end it’s going to help us all, but right now we need it to be easier to get into our neighborhood."

This article appeared in the Dallas Voice print edition January 30, 2009.

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