By: Brian Kendall
South by Southeast
Jennifer Neil Farmer and Robb Farmer, who run a Fort Worth design-build firm that does projects internationally, were looking for a historic property to buy when they ran across a listing for an old mortuary. “It had been on the market, it was repped by a company in Dallas, and people were having a hard time getting in to see it,” Jennifer Farmer said in an interview. “It was listed as a mortuary. But I could tell from the parapet, it used to be a theater.”
The Farmers bought the building – the defunct Pinkston mortuary in Fort Worth’s emerging Evans-Rosedale corridor on the east side of Interstate 35 West, just across the highway from the burgeoning Near Southside. The Farmers set out to carefully clean up the site and make repairs, in preparation to market the shell for uses like a café and small retailers.
Then Amy McNutt, co-owner of the vegan Spiral Diner on the Near Southside’s West Magnolia Avenue, called in December with an idea she’d been hunting a site for: put an arthouse cinema in the Pinkston. The Farmers go before the city’s Zoning Commission March 14, seeking a rezoning to allow on-site alcohol sales and consumption to make way for McNutt’s theater. If they don’t get approval, the couple will revert to their original plan, Farmer said. “We work slowly,” she said. “We’re very community-minded and careful.”
The Farmers are among the latest to join a slow return of development to Southeast Fort Worth. Developers are toeing the water in neighborhoods from Poly to Stop Six, attracted by available land, the city’s last cheap prices, and proximity to major highways and assets like downtown. But they're hindered by fragmented, often-unclear property ownership, wary of perceptions about safety and poverty, and unsure of demographic factors like disposable income. Land values are being pushed up, and deals are happening around clusters like Texas Wesleyan University, Evans-Rosedale, and the redeveloped Masonic Home property that’s now home to Renaissance Heights. Spec homebuilding is increasing, as homes built in small numbers have been selling.
The canvas is huge, but three clusters – Texas Wesleyan University, Evans-Rosedale, and Renaissance Heights – form a big triangle, says Fred Slabach, president of Texas Wesleyan, which has aggressively pushed renewal around its Poly home.
“If we could connect them, we would have a pretty impressive triangle,” Slabach said in an interview. “It doesn’t take in the entirety of Southeast Fort Worth. But it is a pretty large portion of it.”
Developer Matthijs Melchiors, with a model of the mixed-use complex he's building of shipping containers in Evans-Rosedale.
EVANS-ROSEDALE: THE NEXT THING
The intersection of Evans Avenue and East Rosedale Street is regarded by Southeast Fort Worth boosters as the quadrant’s lowest-hanging fruit, because it’s viewed as a Near Southside extension, falls beneath that city design overlay, and is covered by a neighborhood empowerment zone that waives permit fees. The city has already spent millions on improvements to the Evans Avenue and East Rosedale streetscapes, and public assets like the Ella Mae Shamblee Branch Library, Evans Plaza, Hazel Harvey Peace Center for Neighborhoods, and a public art project at a fire station.
The Farmers’ plan, which they've kept under wraps ahead of the zoning hearing, is the latest to surface in the district. The Farmers, who run the F5designBuild firm, bought the property at 821 E. Terrell St. in early 2016. The building is 12,000 square feet in size, built in three stages starting in 1921, and the site is 46,000 square feet.
The Farmers’ research confirmed the building served as a theater in the 1930s. After McNutt contacted the Farmers, they recast their plan and applied to the city for rezoning to allow on-site alcohol sales and consumption for a theater, cinema, café or restaurant where at least half of revenue comes from ticket or food sales.
The Farmers expect to negotiate parking on the vacant land they own next to the building, as part of the rezoning, Jennifer Farmer said. The Evans-Rosedale area’s mixed-use zoning allows alcohol sales, but the city rezoned the Pinkston property in 2008 to disallow alcohol sales. The Farmers would expand the building to allow more than one theater screen for McNutt’s group, Farmer said. The city’s planning department in late February was finishing details of the plan that will be presented to the zoning commission, focusing on parking, a planning official said. Package liquor sales will likely remain barred. The City Council is scheduled to vote on the Zoning Commission’s recommendation April 3.
“If the citizen theater [proposal is approved], then we would break ground 2019,” Farmer said. “If the alcohol amendment doesn’t go through, then we’re not the home for the citizen theater. We can do a restaurant without alcohol; then, we go forward in 2017. We had not planned to expand the building. We were ready to submit [a permit application to the city] just for renovation of the shell.”
The Pinkston plan can serve as a catalyst in Evans-Rosedale, Stacy Marshall, executive director of the Southeast Fort Worth economic development nonprofit, said in an interview. “Once they get that building up and running, it will fill the blank spaces to the east.”
Asked in an interview what she thinks of the proposal, City Council member Kelly Allen Gray, whose district includes Evans-Rosedale, said, “I need it to be a little bit more precise. I need to know that it’s happening. I think if they can pull it off, it’s a great plan. They have some zoning issues to work through. I think it’ll be a great asset if they can truly do what they’re saying.”
Gray, an advocate for housing, said Evans-Rosedale is a good landing spot for commercial development. In discussions leading to the recent publication of a new citywide economic development plan, housing was ruled out for Evans-Rosedale because of a lack of enough land.
“It’s a prime location; it has literally every piece of infrastructure,” Gray said. Unclear title, an issue across Southeast Fort Worth, is not a problem in Evans-Rosedale.
“There’s not lots of different owners,” Gray said. “There’s not an issue of assembling property. Evans-Rosedale has great freeway access, close proximity to downtown. If the medical district is of interest to you, the proximity to the medical district is great. It just makes sense.”
Elsewhere in the corridor, the city is preparing to issue a request for proposal, seeking a master planner to develop a rationale for a number of lots the city holds in Evans-Rosedale.
“We have been approached by three developers,” Marshall said. “The one that came closest was the [proposed limited service] hotel, one wanted to put townhomes on the frontage road and around [Missouri Avenue], and one wanted to put in a Family Dollar.”
On Evans south of East Rosedale, the Fort Worth architect Matthijs Melchiors is under construction on an unusual office building made of forty 160-square-foot recycled shipping containers. The building will have 32 offices available for rent, the 640-square-foot offices of Melchiors’ firm, now housed in the city’s IDEA Works incubator on the west side of I-35W, restrooms, and event, meeting, and break space.
The building finished 2017 at 60 percent pre-leased, says Melchiors, who's targeting the kinds of tenants who are growing out of the city's incubators across the highway. Lease rates are $850-$1,250 per month. Ground-level spaces could be used by micro-retailers or food and coffee service, Melchiors said.
Melchiors is putting the building up on a 5,000-square-foot lot. It’s costing him $1.2 million to $1.3 million, or about $200 per square foot to build, compared to about $250-$270 for traditional construction. But the savings are largely coming from his absorption of roles, he said in an interview.
Evans-Rosedale land prices, like elsewhere in Southeast Fort Worth, have shot up. Melchiors went under contract to buy the site in April 2016 at only $5 per square foot, compared to prices several times that on the Near Southside. Evans-Rosedale prices have since doubled to $10-$12 per square foot, Melchiors said. Safety perceptions have been a historic drag on prices. “In a lot of people’s minds, it’s a no-go area,” Melchiors said. “We’ve experienced no problems.”
Homebuilders have been slowly testing Southeast Fort Worth. Developer Tim Fleet has purchased 30 lots in Morningside in the last nine months and started construction on eight homes – four- and three-bedroom, two-bath homes that will be listed for about $165,000, or $100 per square foot, an attractive entry price point.
“We’re just finishing the first ones,” Fleet, whose Riverside Homebuilders has also been building spec homes in West Fort Worth’s Como neighborhood, said in an interview. “We’ll see if they sell. If they start selling, we’ll start building more houses.”
Texas Wesleyan President Fred Slabach: Getting ready for next round of redevelopment around the Poly campus.
TEXAS WESLEYAN’S CONTINUED PUSH
The university continues to queue up redevelopment pieces along East Rosedale to U.S. Route 287, which it views as a gateway to the university. Texas Wesleyan has already spent $6.5 million to build four key pieces of the “Rosedale Renaissance”: a university “front door” with entryway and clock tower; United Methodist Church Central Texas Conference Service Center and bishop’s offices; renovated Polytechnic Firehouse, home to the university art department; and improvements on streets adjacent to campus that lever $32 million in public improvements to East Rosedale. More on tap designed to heighten opportunities for students to live, work and play on campus:
University Center: Spring groundbreaking for a $19 million, 44,000-square-foot, two-story center on the mall that will house admissions, two game and study lounges; food court with two food concepts and a coffee shop; university bookstore relocated from a Texas Wesleyan-owned strip center on East Rosedale; outdoor plaza and amphitheater; student meeting rooms; student affairs; and a ballroom that seats just under 300 people for a meal. Opening: fall 2019. “This is going to be a game-changer,” Slabach said. “All the data shows students who are engaged in the university outside of class will be much more likely to persist and graduate.”
The ballroom will also allow the university to hold more of its own functions. “Right now, we don’t have a space on campus that will seat more than 150,” Slabach said. “We’ll be able to invite the community in. Our alumni association can have its annual banquet at campus.”
The University Center will also present a strong face for prospective students who are visiting, Slabach said. The university expects to sign a contract in late April with Byrne Construction, which will be construction manager at risk, Brian Franks, the university’s executive director of facilities and operations, said.
New apartments: The university will issue a request for proposals this spring for an apartment building with 50 two-bedroom units on land Texas Wesleyan owns east of the bishop’s house on East Rosedale, Slabach said. “We’re working with developers to get the exact configuration,” but it would likely be three to four stories, Slabach said.
The university is interested in a partnership under which the developer makes the investment and either manages the apartments or “turns it over to us,” Slabach said. Texas Wesleyan would work with its partner to set lease rates.
Slabach says the university is over capacity on its dorm space, so it doesn’t believe it would have to offer the developer an occupancy guarantee. “If we’re able to work out an agreement with a developer, we would not need to put up any investment other than the land.” Tentative opening time frame is spring 2020, Slabach said. “I anticipate that would fill up pretty quickly.”
Stadium: Planned 3,000-seat soccer, track and field, and football stadium, potentially in partnership with the Fort Worth schools and Fort Worth Vaqueros minor league soccer team. The university’s board earlier this year gave the go-ahead for planning on the field, Slabach said, that would be a precursor to a stadium.
The university owns enough property on the west side of its campus for a field, but “we’d need to acquire a few additional pieces” to build a stadium, Slabach said. The field could open in fall 2019, and full stadium in fall 2021, Slabach said. “A lot of that would depend on the Fort Worth ISD.” The field and stadium could cost up to $15 million, Slabach said. The stadium would be home to Texas Wesleyan’s football team, which the university restarted last year for the first time since World War II. The Rams play their home games at the Fort Worth ISD’s Farrington Field.
Sycamore Park: The Rams baseball team is in its second year of playing home games at the city’s Sycamore Park off of East Rosedale, west of the university. The Wesleyan board earlier this year approved $630,000 in improvements, including work on bleachers, restrooms, concessions, dugouts, and fencing. The university is raising the money, Slabach said. “Once funding is in place, I anticipate six to nine months for design and permitting and then five months to complete the work,” Franks said.
The Sycamore Park and stadium pieces will increase activity around the campus, driving retail demand, Slabach said. The university is celebrating the signing of an incentive-laden lease with the Fort Worth restaurateur Ben Merritt, who this spring will open Ben’s Triple B: Biscuits, Burgers and Brews in a university-owned strip center on East Rosedale.
VAUGHN BOULEVARD: CHRIS POWERS?
Vaughn’s mile-long stretch connects Texas Wesleyan and Renaissance Heights and consists of largely small commercial and residential lots, except for a vacant 32-lot, five-acre site a block off the street at its midpoint, held by the Ruiz family, longtime investors in Poly and surrounding neighborhoods.
Slabach of Texas Wesleyan sees Vaughn as a potential connector, but “the lots are smaller, and there’s probably not going to be major development – except one site,” the Ruizes’.
Brothers Dennis and Lucas Ruiz estimate the family owns about 50 single and multifamily residential rental properties in Poly and eight commercial properties there, including the location of a popular Tex-Mex restaurant on Vaughn, and controls one quarter of Vaughn by ownership between the university and Renaissance. They manage 300 rentals across the area.
The brothers’ father, a longtime tradesman, got into real estate years ago by buying a small group of houses. The brothers are beginning to explore what to do with their 5-acre site, approaching the university and city earlier this year. “We have a suggestion box,” Lucas Ruiz jokes.
The Ruizes also pitched the site in February to Chris Powers, CEO of Fort Capital, developer of the River District on Fort Worth’s West Side. Powers has invested in several successful small residential deals with the Ruizes over several years.
“We are just beginning to dive into the viability of the 5-acre site they pitched,” Powers says. “We believe most viable options for that site would require a public/private partnership in some capacity. Back of the envelope looks like it is calling to be an affordable housing multifamily community. With its proximity to Texas Wesleyan, you might even build a product that attracts students to the area. Whatever we did, we would want it to be in partnership with the Ruiz family.”
The development could spring off of momentum from Texas Wesleyan and Renaissance, Powers says. “Both of those forces on either end of the site continue to build momentum for Vaughn.”
Hap Baggett, managing partner of the ownership group that's developing Renaissance Heights
RENAISSANCE HEIGHTS: ONCE A PRAIRIE, NO LONGER
Just six years ago, when Uplift Education opened a charter school on the grounds of the former Masonic Home in the just-developing 200-acre Renaissance Heights, “there was no place for our employees to pump gas; there was no place to eat lunch,” Yasmin Bhatia, Uplift’s CEO, says.
No longer. In 2013, Walmart opened at Renaissance, which created a new, modern landing spot in Southeast Fort Worth for national retailers and restaurants. Today, the 320,000-square-foot first phase of retail is full. The 142-apartment first phase of the Columbia Square apartments opened last year and are full; one-third of the units rent at market rates. A Cook Children’s clinic is open in the center.
The YMCA of Metropolitan Fort Worth is under construction on a 35,000-square-foot branch that will include a pool, preschool, youth space, wellness area, demonstration kitchen and full gym with walking track. Cook and the Y, which want to combat chronic health problems in Southeast Fort Worth, join ACH Child and Family Services, already in the development and expanding.
Retail: Renaissance can build another 180,000 square feet of retail space. The partnership that owns it, including the Iowa-based Lockard, is talking to a national movieplex operator, Hap Baggett, managing partner for Renaissance’s ownership group, said in an interview. The site is on U.S. 287 at East Berry. “That’s our big visibility, and the one we’ve held to the last,” Baggett said. Retail sales in the development were up 15 percent in 2017 and have grown in four consecutive years, he said. The retail strength – in an era when traditional brick-and-mortar is under siege from the internet – proves up statistics the ownership group discovered that showed residents from neighborhoods surrounding Renaissance were spending $70 million a year on groceries in Arlington, Baggett said. “There’s $500 million in income in [City Council] District 8 not being counted in the census,” he said.
Senior Living: Renaissance in June will learn whether it’s won 9 percent tax credit financing for a five-story, 120-unit senior living building, Baggett said. Renaissance didn’t qualify last year but feels good about its chances this year. “This year, we will qualify,” he said. The developers will sell the credits they receive, allowing them to move forward with construction as early as next year, Baggett said.
- Townhomes: The partnership is working on this phase of the development and expects to decide in April “what we’re going to build and at what price point,” Baggett said. The units would be offered for sale. “We’re going full bore on that now.”
The Renaissance partners have a second phase of apartments in their plan – 150 units – but they’d have to wait two years from their latest round of TDHCA tax credits to apply again, Baggett said. The partnership also plans single-family homes. “We’re 24 months away from design product,” Baggett said.
BERRY/RIVERSIDE: WHAT NEXT FOR MAJOR INTERSECTION?
After taking a backseat to the development of Renaissance, activity at Berry/Riverside – long regarded as Southeast Fort Worth’s next significant real estate play because of its proximity to Interstate 35W, TCU, and downtown – is moving forward again.
The Fort Worth developer Michael Mallick, in a partnership he entered in 2004 with the city, demolished more than 1,000 blighted apartments at the intersection’s northwest corner. In their place, Mallick opened the 232-lot Sierra Vista subdivision in 2007, with Historymaker Homes building and selling 92 homes through March 2008. Building ground to a halt during the recession, and Mallick diverted his attention to facilitating the redevelopment of the Masonic Home property, which he bought and subdivided in 2006.
Homebuilding: Wall Homes of Arlington, after acquiring the remaining 131 Sierra Vista lots from Mallick in 2016 and selling only three homes that year, in 2017 sold 50 homes it built. Through the first two months of 2018, Wall sold 18 houses. It has 28 lots remaining and expects to sell those by midyear, the company’s Christopher Torres said in an interview. Wall, a production builder putting up homes today around the region, is looking for the next place to build in, Erin Kolp, a spokeswoman, said. “It’s going to depend on the lot price,” she said.
In Sierra Vista, Wall is building entry-level homes between 1,329 and 2,071 square feet and selling them for between $80 and $100 per square foot. What changed after the slow start: Buyers didn’t respond to the company's first model, a one-story on a main road that leads into the subdivision.
Wall sold the model and built a new one, a large two-story with open family spaces and amenities like big walk-in closets, in Sierra Vista's interior, across from a small community picnic and playground area the company built. Sales took off, led by families and others who wanted the space, new construction, inexpensive price, and location, Torres and Kolp said.
“You’re close to every major highway,” Torres says. “The hospitals. Downtown. TCU is three miles up the road. You always have things to do.”
Senior living: Mallick has an 8.8-acre piece, also at the northwest corner of the intersection, that’s under contract to Sphinx Development Corp. for a proposed senior multifamily development. Sphinx in late March expects to learn from the state whether it’s been approved for 4 percent tax credit financing, Mallick said in an interview. “They tell me it looks good.” Sphinx intends to build a 272-unit dense urban-styled project.
- Office space: At the Northeast corner of the intersection, Mallick owns a 34.8-acre commercial tract with a vacant 150,000-square-foot building. Before Renaissance drew Walmart, other big box stores and chain restaurants, Mallick’s original plan was to redevelop the site as retail.
Even though Southeast Fort Worth boosters have viewed the intersection as potentially attractive to national retailers, Mallick is marketing it for office, light industrial, or logistics, and he recently pitched it to a major office user already in Fort Worth. “We’d have to rezone it,” he says. With Renaissance, “we basically cannibalized ourselves. We are adequately retailed up at Renaissance. There’s no need for 34 acres of retail in Southeast Fort Worth, in this quadrant. I wish this were in Stop Six” further south.
Elsewhere near the intersection, the Firestone & Robertson Distilling Co. last year opened its Whiskey Ranch venue, absorbing the declining Glen Garden Country Club. And businessman Jim Dunnagan, who owns a defunct 1950s-era trash incinerator, has been working with businesswoman Erin Razo to develop a plan for the six acres and position themselves to bid for 40 acres of surrounding city property.
Razo says the site draws creatives like artists and photographers on weekends. Potential uses include skatepark, special event space, urban farming, farmers market, and tiny houses for people who need homes. “Really trying to treat it as pop-up space initially while it grows organically,” she said.
Lester Jones, Fort Worth builder who grew up in Stop Six and just completed his first spec home in the neighborhood
STOP SIX: TIME STOPPED
The neighborhood around Fort Worth’s Dunbar High School was once the sixth stop on an interurban line that connected Fort Worth and Dallas. Today, it has a jobless rate 2 1/2 times the Fort Worth average, 78 percent of the population is low-to-moderate income, and crime is high on a per-capita basis.
Stop Six’s renewal has been hung on plans for redevelopment of the Fort Worth Housing Solutions’ Cavile Place housing project, led by Housing Solutions and the city, but the two are preparing to unwind from the original plan.
The original plan: Demolish Cavile and replace its 300 units with new ones, including 225 in the Cavile neighborhood, in partnership with developers. The city is also investing millions in improvements to the nearby East Rosedale. But Housing Solutions and the city are changing their plan because market conditions rendered tax credits to be used in the project worthless, Mary-Margaret Lemons, Housing Solutions’ executive director, said. An $8 million gap in expected development costs exists for the first 48 units, she said.
Housing Solutions spent about $1 million over several years buying 81 single-family residential lots around Cavile Place in preparation for the redevelopment. Beginning later this spring, Housing Solutions and the city, which owns less than 30 tax-foreclosed properties in Stop Six, will begin releasing them for sale in the private market, Lemons and Aubrey Thagard, the city’s Neighborhood Services director, said.
The lots will gradually be released in batches of a dozen or so, with the goal of selling them to “quality builders and nonprofits with a track record of providing housing, people who’ve got the capacity to do multiple parcels,” Thagard said. The agreements will require construction within a specified period, he said.
Lemons said Housing Solutions wants to sell at least the "majority" of the lots. Thagard said he thought it likely that all will be sold.
It’s not clear whether the lots will be put up for sale individually or in packages, or how they’ll be priced. “We’re still working through all that,” Thagard said.
Lot prices are up in Stop Six. Standard single-family lots, which builders might have acquired a few years ago for $2,000, are now offered for as much as $14,000.
Housing Solutions paid $12,000 on average for its single-family lots. Asked whether it was willing to take a loss in the divestiture, Lemons said, “FWHS uses all proceeds to further our affordable housing mission, so we always look for the best return on our investment.”
Cavile's status is unclear, Lemons said. “We’re really evaluating all of our options to redevelop,” she said. City council member Gyna Bivens, whose district includes Stop Six, said, “When they decide what they’re doing, I’ll be ready to help them.”
Builders already have expressed interest in building in Stop Six, characterized by wide swaths of vacant land, but have been frustrated by lack of response from the city.
Lot prices, custom building and speculative building have risen since the City Council lifted a historic overlay requiring the exteriors of newly constructed and remodeled homes to meet historic standards. Bivens, over criticism from some neighborhood leaders, argued the overlay was unnecessarily keeping redevelopment at bay.
Tim Fleet, the Fort Worth developer building spec homes in Morningside and Como, said he’s offered to buy lots in Stop Six from the city but hasn’t heard back. “We’ve made offers to buy five lots,” he said.
A small number of low-volume builders has been putting up homes in Stop Six.
Carlos Harris, one builder, recently sold two 1,650-square-foot homes he built side-by-side on spec. The homes, with 10-foot ceilings, granite countertops, tile floors and sitting on half-acre lots, sold within four days at $185,000 and $188,000, said Harris, who has six other lots in Stop Six.
While incremental, Harris said his success shows demand inside Loop 820 for good-quality homes of size at reasonable prices, Harris said. “You are right here in one central location,” Harris said.
Lester Jones, who grew up in Stop Six, has been building houses in the area for years, first with his dad, who died in 1996. Jones earlier this year completed his first spec home in Stop Six, a 1,500-square-foot three-bedroom, two-bath, two-car-garage brick home that he’s listed for $185,000 – a strong $123 per square foot.
Jones has three other standard single-family lots, including one he bought two years ago from the city for $2,000. “Yesterday, a guy called and offered me six lots at $14,000 apiece,” he said in an interview in early February at the breakfast bar of the new Willie Street home, which Jones decked out with engineered wood floors and granite countertops.
Jones, who lives with his wife in Everman, came up with the idea to invest in Stop Six after watching a documentary about a Detroit developer who contributed to that city’s comeback by focusing on one house at a time.
“I told my wife we could do the same thing in Stop Six,” Jones said. “We called it our Lazarus Project – bring it back from the dead. People are interested in the area. Mainly, it’s people who grew up here, left, and have come back.”
Surging lot prices are still within the realm of what’s economically possible for a newly built home in the neighborhood, Jones said. “It hasn’t gone past what’s reasonable, but it’s certainly done its thing,” he said.