The Grove, Dallas will shut its doors on Thursday after it was unable to successfully negotiate new lease terms with its West End building owners. The coworking space, which is known for championing social impact, has provided Dallas entrepreneurs with office space and programming for four years.
“[I’m] sad to see something end that was able to positively impact so many lives around North Texas,” said Justin Nygren, co-founder of The Grove, Dallas. “But [I’m] also relieved that the struggle we’ve faced is coming to an end.”
The Grove inked its initial leasing arrangement in 2013 with then-owner and Slingshot Advertising CEO Owen Hannay, who purchased the building at 501 Elm St. in 2012. The agreement gave The Grove 3,600 square feet in the 82,145 square-foot building. That eventually expanded to 7,500 square feet with a lease that was set to expire May 2019. Hannay also offered The Grove one-year leases as needed for any of the 23 private offices across the hall, Nygren said. These offices served as The Grove’s main source of profit.
But things changed when Goff Capital acquired the building in 2015. In March 2016, Crescent Real Estate Properties, which manages the property, did not renew the existing private office leases, and instead offered another agreement that was a “super value,” said John Zogg, managing director of Crescent. Nygren said the deal wasn’t a deal at all.
“It was way more than what I need and way beyond what I could afford,” Nygren said about the space.
“We had a good-faith negotiation on the space,” Zogg said, adding that Crescent agreed to honor every provision it already had with The Grove in hopes of keeping the coworking space long-term. “It’s unfortunate we were unable to reach an agreement.”
At the height of its business, The Grove, Dallas had nearly 200 members using its coworking space, which could seat about 80 people at a time. In its four-year history, it launched a Dallas branch of the social accelerator Unreasonable Labs, now known as Uncharted, which worked with 10 social enterprises last year. It also hosted The United Way of Metropolitan Dallas Ground Floor accelerator program earlier this year.
The Grove first opened its doors in August 2013 after Nygren linked up with his mentor Ken Janke, who founded the original The Grove in New Haven, Conn., in 2010. Nygren had been working to open Art House Dallas, a coworking space dedicated to creative individuals. When that plan fell through due to zoning issues, Nygren approached Janke. “I’ve got the coworking bug, [and] I’ve fallen in love,” Nygren remembers telling Janke. “So I told him if he was going to open a Grove in Dallas, I’d love to work for him. Later, he came to me asking if I wanted to be an owner.”
At the time it opened, The Grove was one of only a couple of coworking spaces in North Texas, and the only one in downtown Dallas. Nygren owned 51 percent of The Grove, and Janke and his business partner Matt Smith owned the other 49 percent. Together, Nygren and Janke aimed to create a licensing model for The Grove, with Dallas serving as the test market. Now that The Grove, Dallas is closing, the licensing model will likely not continue, Nygren said.
“We did it, we built it, we proved that it was financially viable,” Nygren said. “We just found ourselves in a situation that was out of our control. It’s best to just call it a good run.”
As it prepared for its final days, The Grove hosted what it called a “sending party” last week marking the end of the coworking space and celebrating Nygren’s upcoming plans.
Nygren plans to continue running the Uncharted accelerator from one of North Texas’ other coworking spaces. He also will continue running the Dallas Coworking Collective, a group he and Fort Work founder Oren Saloman created to help Dallas coworking space operators collaborate. He’s also helping Daryn DeZengotita, who helped start The Mix coworking space in East Dallas, build the North Texas Coworking Alliance. The new group aims to bring together all coworking operators in North Texas. Meanwhile, Nygren also is serving as a coworking consultant, helping current and prospective operators in the industry with their business models.
Though The Grove will soon no longer exist, it will continue to serve as an important part of Nygren’s history, he said.
“The one word that would sum up what’s it’s meant to me for the last four years is community,” he said. “This is a true community that supported each other.”
