Office campus, shops and high-rise hotel in the works for big Plano development
By Steve Brown, Real Estate Editor, The Dallas Morning News
A luxury hotel tower, corporate office space, an urban shopping center and apartments — those are part of what’s planned for one of the Dallas area’s largest new real estate projects.
Developers who will break ground soon on almost 240 acres at the Dallas North Tollway and State Highway 121 in West Plano aren’t wasting any time getting the huge real estate project in gear. Construction will start in the next few months on the first phase of the Legacy West project.
“There is a huge momentum to develop this site,” said developer Fehmi Karahan, who heads one of three local firms joining forces to build on land surrounding J.C. Penney’s corporate headquarters in the Legacy business park.
The property, divided into four huge blocks fronting on the tollway and Highway 121, has remained vacant since Penney built its corporate offices in the 1980s.
Now Karahan Cos., corporate office developer KDC and apartment builder Columbus Realty Partners will develop the land in partnership with Penney.
Just a month after committing to the deal, the firms are ready to start work on the first office buildings, and a hotel tower is on the drawing boards.
“We are doing site clearing now, and we will probably start full construction in about 60 days” on a new headquarters complex for FedEx Office, KDC chief executive Steve VanAmburgh said.
More than 1,200 FedEx workers will be housed in the campus that KDC is building on Legacy Drive.
“We are already talking to two or three other prospective companies that want to be in this project,” VanAmburgh said. “The entire office component could be anywhere from 3 [million] to 4 million square feet.
“It would be easy to envision anywhere from 10 to 20 midrise and high-rise office buildings that range from 150,000 square feet to 300,000 or 400,000.”
KDC has a lot of experience with that kind of office development.
The Dallas-based firm is building the huge State Farm Insurance regional headquarters in Richardson. And it’s done large corporate facilities for Blue Cross Blue Shield of Texas, Citigroup and, in Legacy business park, for Encana Oil & Gas, Tyler Technologies, Intuit and Denbury Resources.
Karahan Cos. sought out KDC when it proposed developing the Penney land. And they included Columbus Realty, which has built 3,000 apartments in the Legacy Town Center.
With the 150-acre Legacy Town Center almost out of construction sites, Fehmi Karahan was interested in Penney’s land across the tollway.
“I always thought it was a great site to develop,” Karahan said. “For years, Penney said they weren’t ready to do anything with it.
“But at the end of 2011, they issued a request for proposals to developers.”
Other real estate firms that pitched for the chance to build on the property included Trammell Crow Co., Lincoln Property Co., Forest City Enterprises and Houston-based Hines.
“But no one knows Legacy business park better than we do,” Karahan said.
His Shops at Legacy retail and entertainment center has become a regional restaurant and shopping destination.
Karahan wants to do more such development on the Penney land, which will probably be even more urban.
One of the first phases of construction there will be a high-rise Renaissance Hotel on Legacy Drive just west of the tollway.
The hotel project has the backing of the family that owns the hugely successful Sam Moon retail firm.
The almost 300-room hotel will be joined with shopping, apartments, condominiums and office space along the west side of the tollway.
“There is definitely a demand for condominiums,” Karahan said. “There is not a high-rise condo project in this entire area.”
The need for housing in the project is being driven by the increase in jobs in the area, said Robert Shaw, CEO of Columbus Realty.
“It will be a dense, more urban project than it would have been even five years ago, much less 10 years ago,” Shaw said. “It will build on what is already in place in Legacy Town Center.”
By holding off on development of the property until now, Penney’s land will wind up looking more like Dallas’ Uptown district than a suburban development, he said.
“The timing couldn’t be better,” Shaw said. “We are in a hurry because there is a lot of interest.
“We want to make sure we are diligent and thoughtful with our development plans, but at the same time not miss opportunities.”