The future home of Dallas's Victory center was once a 72-acre industrial wasteland, polluted by an old paint factory, a meatpacking plant and a train yard. It included a 100-year-old grain silo that had been forgotten by time.

When the developers of Victory, Ross Perot Jr.'s Hillwood and Southwest Sports Realty, knocked the silo down, they found 40-year-old grain buried in bird droppings and mildew. The grain was destroyed along with everything else from the old site.

“It was just a blighted brownfields location,” says Hillwood Capital President Jonas Woods, describing the site near downtown Dallas along Interstate 35. Brownfields are polluted former industrial and commercial sites that are still contaminated and must be remediated. (See related story on page 48.)

Plans call for this urban wasteland to become a new $3 billion dollar mixed-use urban community. It's not the only infill project. Cities across the country are deploying retail and residents to revive old, deteriorating neighborhoods.

“It's like America is recovering from a stroke,” says John Norquist, president of the Congress of New Urbanism and the former mayor of Milwaukee. “You have people seeking better ways to live. Right now they are giving the urban form another look, and they like what they see.”

While sprawl continues in many parts of the country, Americans are rediscovering their urban centers. According to a study produced by the Congress of New Urbanism, 53 percent of Americans believe an easy walk to stores from their home is “extremely important.” In addition, the study found that 49 percent would prefer to live in an area that has a less car-oriented street pattern and that encourages more walking.

Big-box developers, the epitome of suburban sprawl, are paying attention to the new urban trend as well. In September, Home Depot opened a two-story, 105,000-square-foot store in downtown New York City, complete with a doorman to hail taxis for customers. (See related story on page 10.) Wal-Mart has been trying to build two stores in Chicago, but recent proposals by the city council to set minimum wages and benefits have stalled progress.

Developers and municipalities are approaching inner-city mixed-use projects in different ways. Some projects, such as Victory, involve tearing down and rebuilding from the ground up. Others entail restoration and renovation of existing urban neighborhoods.

The Baltimore Development Corp., the city's development authority, for example, which works with private companies such as the architecture and planning firm Design Collective, is spearheading a plan to transform the city's West Side, a blighted neighborhood north of the Inner Harbor, into a residential and retail mecca. The 24-block neighborhood was a retail hub before it was deserted in the mass exodus to the suburbs. The West Side master plan includes the newly renovated Hippodrome Theater, remodeling an old department store into office and retail space, and a 22-story residential tower dubbed the Zenith.

“Due to the commitment to residential expansion, the West Side offers retailers tremendous market potential,” says Matt D'Amico, a principal with the Design Collective. “Recent studies indicate that the West Side is attracting young professionals with disposable income.”

Other future plans for the West Side include the 850-room Convention Hotel (the owner wasn't identified), mass transit improvements and at least 90,000 square feet of additional retail space. The full master plan is expected to be completed by 2006.

Even the Bronx, which is home to some of the most blighted neighborhoods in the country, is not immune to urban redevelopment. In August, New York Mayor Michael Bloomberg cut the ribbon for River Plaza, a 235,000-square-foot mixed-use center. Built by a private development consortium known as Kingsbridge Associates, River Plaza sits on a former industrial area that once was the site of a medical-center warehouse. It is the biggest private investment ever made in the west Bronx.

MIXING IT UP ALL OVER THE U.S.
Name Location Size Developer Cost Opening Date Architect Types of Uses
29th Street Boulder, Colorado 65 acres over three blocks/827,000 square feet The Macerich Co. $130 million First store opens late 2005 SEM Architects Inc. Grocery Store Office Retail Corporate headquarters of Wild Oats
River Plaza The Bronx, New York 235,000 square feet Kingsbridge Associates LLC $90 million August 2004 Greenberg Farrow Architecture Rosenbaum Design Group Architects Office Retail
St. Johns Town Center Jacksonville, Florida 1.5 million square feet of commercial space Simon Ben Carter Properties $300 million Phase I will open October 2005 n/a Office Residential Retail Hotel
South Point McDonough, Office Georgia 1 million square feet of retail ; 500,000 square feet of office North American Properties $200 million 2007 n/a Office Residential Restaurants Retail
Victory Dallas, Texas 72 acres Hillwood Southwest Sports Realty $3 billion Arena opened 2001; Phase II completed 2006; Entire project by 2015 HKS Inc WDG Architecture Office Residential Retail Sports arena Hotel
West Side Baltimore, Maryland 450 acre neighborhood district Baltimore Development Corporation At least $800 million Hippodrome Theatre renovated in 2004; Completion of master plan in 2006 Design Collective Office Residential Retail Theater/large market area

“It is going to fill a void in a neighborhood that is severely underserved from a retail standpoint, and it is going to provide valuable jobs for the residents who live here,” says Paul Travis, principal of Kingsbridge Associates.

A 130,000-square-foot Target and a Marshall's anchor the plaza, along with a Lane Bryant, Radio Shack, Applebee's and the eternal symbol of every hip urban neighborhood, Starbucks.

In Dallas, Victory center is just getting started. Everything in Texas is big, and Victory is no exception. Construction started in 1999 and requires a total environmental remediation. The first two phases of Victory will include the already-built $400 million American Airways Arena, a new road infrastructure, 50 retail stores, 10 restaurants and 400,000 square feet of office space. And that's only 20 percent of the center's master plan.Dallas-based WDG Architecture is designing many of the buildings in Victory's phase II, which calls for 300,000 square feet of retail. Confirmed tenants include Quicksilver, sunglasses-retailer Peepers, British sportswear-maker Fred Perry and J. Lindberg, a Swedish designer who currently operates only in New York and Los Angeles.

“It's an enormous project,” says Woods. “Upon completion, it will be an urban core unto itself.” The project is slated to finish by 2015. After phases I and II, the remaining 80 percent of Victory Center will develop organically, like a real neighborhood, with market demands determining its future. In the end, developers hope Victory will resemble upscale city districts in New York and Los Angeles. “I think we offer retailers something that they don't get between the coasts,” says Woods. “There is not an authentic urban neighborhood with this type of regionability here.”

Retail reaction has been strongest from the unique boutique-type shops commonly found in the East or West coasts, says Lisa Streidl, a senior vice president for brokerage firm Blatteis & Schnur, which is consulting on the project.

Success is not guaranteed, however. Competition in the Dallas-Fort Worth area is great. Thirty-six shopping malls serve a metropolitan area of 5.7 million people, one of which is the world-famous Galleria.

“When someone is going to do a project that encompasses all of these different elements, you need to have someone who can make sure it perfectly fits together, and the only way to do that is a good, credible sponsor,” says Richard Walter, president of Faris Lee Investments.

Hillwood, with a few grandiose projects under its belt, is just such a sponsor, says Walter. One of its most successful projects is AllianceTexas, a 15,000-acre development in northern Texas that houses the commerce center of Alliance and a residential community known as Circle-T Ranch. Hillwood is also working on Alliance California, a 2,000-acre business park in San Bernadino. “Hillwood not only has the depth of knowledge, but it also has a lot of money,” says Walter.

Saturated Market?

Victory plans to include a 251-room W Hotel, complete with 75 residences. Dallas architects HKS Inc. designed the new hotel, which will be a high-rise wedge-shaped tower made of concrete and glass, with a cantilevered wing on top. This will be W's second hotel/residence project; the first is in Fort Lauderdale.

Future plans for Victory include a mass-transit station, biking and hiking trails, and a high-end grocery store, says Woods. What's more, the Dallas Museum of Natural History plans to move to a proposed $100 million center near Victory.

But can Victory attract area customers in a retail-heavy market? “Shopping is very mall-based right now, but people here are starting to want something else,” says Streidl.

Two successful centers in the region show local desire for unique retail experiences. The first is Highland Park Village, which was among the first shopping centers in the U. S. when it was built in 1931. After a revitalization, the original mall has become a mixed-use center. Revamped by Henry S. Miller Interests Inc., it includes such high-end retailers as Chanel, Christian Dior and Hermès.

The second exception to mall-based retail is West Village, a mixed-used center in Dallas, where retailers such as Banana Republic and the Gap share the development with apartments, restaurants and theaters.

Their success could be a propitious sign that the demand for urban mixed use will deliver the spoils to the Victory center.

URBAN RENEWAL

CHALLENGE:

While cities and suburbs continue to sprawl seemingly into eternity, many urban centers have been abandoned, creating blight and an economic vacuum for their communities.

SOLUTION:

Seizing on a return of young professionals to the inner city, developers and officials are transforming neglected neighborhoods into attractive destinations for work and play through ambitious mixed-use projects.

BUZZ:

Ross Perot Jr.'s company Hillwood and Southwest Sports Realty will spend $3 billion over 15 years to create Victory, a “city within a city,” in down-town Dallas. Victory will feature residences, shops and offices.

DATA:

Victory won't be completed until 2015. Baltimore's revitalization of its West Side neighborhood will be completed by 2006, including a $24 million conversion of an old department store into offices and retail. The Bronx's new River Plaza cost $90 million and two years to complete. It is expected to generate $12 million in annual tax revenue for New York City.