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Commercial Real Estate

Wayne Swearingen: The Story of Cityplace

Cityplace, the iconic 42-story tower along North Central Expressway, has been in the news lately, as new owner Parmenter Realty Partners is in the planning stages for development of the surrounding land. The office tower has a special place in my heart, as my colleague King Laughlin and I helped put the deal together. It was huge—and hugely complicated! Land assemblage alone involved more than 1,000 different parcels. It's believed to be the largest urban land assemblage undertaken completely with private funds.
Wayne Swearingen
Wayne Swearingen

Cityplace, the iconic 42-story tower along North Central Expressway, has been in the news lately, as new owner Parmenter Realty Partners is in the planning stages for development of the surrounding land. The office tower has a special place in my heart, as my colleague King Laughlin and I helped put the deal together. It was huge—and hugely complicated! Land assemblage alone involved more than 1,000 different parcels. It’s believed to be the largest urban land assemblage undertaken completely with private funds.

To preserve the history of Cityplace, King and I have worked diligently to compile its story, using notes, files, and our memories (as best as possible), going back 36 years.

The Tower at Cityplace
The Tower at Cityplace

Defined, Cityplace is an area of Dallas, a short distance north of the Central Business District, bounded on the west by the Katy Trail and Turtle Creek, on the east by Lafayette Street, and bisected by North Central Expressway and Haskell Ave., east and west. The core area of Cityplace is comprised of 160 acres of land assembled in the early 1980s by The Southland Corp., which at the time owned 7-Eleven.

In the early part of the 1800s, the city of Dallas was founded on the northern banks of the Trinity River. Initially, the city was huddled by the river, and for many miles to the north the “Blackland Prairie Land” was used extensively for cotton farming.

As the city began to grow in earnest, the residential growth proceeded north from the banks of the Trinity River. Growth generally followed the Turtle Creek and White Rock Creek watersheds, both of which run more or less north and south.

The Katy Railroad left the downtown area and proceeded north following the Turtle Creek watershed. (In modern times, the rail right of way became the first large urban park in Dallas … the Katy Trail.)

In the 1890s, a large area of what was then “North Dallas” was platted for single-family housing. The lots were modest in size and, in most cases, small wooden frame homes were built. These homes, many of which survive to this day, served the so-called middle income families.  Larger, more expensive homes began to rise along Ross Avenue, Turtle Creek, and the Swiss Avenue area.

In the early 1900s, the cities of Highland Park and University Park were created and began to grow along with the other areas of Dallas.

In 1911 Southern Methodist University was created in University Park. SMU helped to pull development further and further north.

In the 1950s, as automobile use was exploding after World War II, the state of Texas undertook construction of one of the first “freeways” in the State. It was known as North Central Expressway—U.S. Highway 75. This freeway ultimately connected downtown Dallas with the Oklahoma border near Denison.

King Laughlin
King Laughlin

The development of North Central Expressway set the stage for the future growth of the area near to downtown Dallas, and ultimately led to the creation of the Cityplace area.

The Birth of Cityplace

King Laughlin: In the 1960s, 7-Eleven (owned by the Thompson family, under the Southland Corporation name), was a fast-growing national company that had essentially created the idea of the convenience store. The rapid explosion of automobile use after World War II created a need for fast, efficient places for people to buy groceries. 7-Eleven became a public conglomerate listed on the NYSE and continued to grow. In the late 1960s the company, which had been founded in a small ice house in the Oak Cliff area of Dallas, needed to consolidate its management and office needs.

7-Eleven bought property at the northeast corner of Haskell and North Central Expressway. A new 126,086-square-foot headquarters was constructed, along with other facilities needed by the company.

Wayne Swearingen: In August of 1972, I left Henry S. Miller Co. and set sail with my first company venture, The Swearingen Co., a brokerage firm. During the latter part of the 1970s, I was asked to consult with the Thompsons, who wanted to build a much larger headquarters for 7-Eleven. We looked at where to build, how big it should be, the floor configuration, etc. Henry S. Miller Jr. and Harwood K. Smith (the founder of HKS Inc.) were at some of the earlier meetings.

One day in 1979 I was asked to join the Thompson table at the Chateau Restaurant, now the site of Chateau Plaza building in Uptown. The decision had been made to build a tower of over 1 million square feet and assemble surrounding land for development. John Thompson said, “Not just a little land Wayne. We want to buy up all the land just east of our current building and all the way to Turtle Creek.”

I said “Great, let us do your land assembly. I have the perfect broker to head it up.”

7-Eleven agreed, and King was tapped to start assembling the land.

Laughlin: Secrecy to protect the integrity of the assembly was a primary goal of the assignment from the outset. The targeted area would come to encompass over 160 acres of land, the majority of which was occupied by all types of real estate, including office, retail, industrial, multifamily, churches, condominiums, and single family homes. More than 1,000 individually owned tracts were all purchased with insured fee title over a period of five years.

The secrecy surrounding the assembly was uncompromised for more than four years. When the story finally broke, there were so few properties remaining to purchase, there was no adverse effect on the assembly.

When completed the total value of Cityplace property exceeded $350 million, with all land owned in fee and free of debt.

7-Eleven hired the architect, Araldo Cossutta of New York to first conceive a master plan for the entire property and then to design the company’s new 42-story headquarters building, which would sit immediately south of its current home base, across Haskell. The 1.2 million-square-foot building, which exists today, was completed in the early 1990s at a cost of more than $400 million and fully occupied by 7-Eleven.

Soon afterward, ACS bought the original 7-Eleven headquarters buildings on the northeast corner of Haskell and Central, where they took over the data processing for 7-Eleven and other ACS clients.

In the early 1990s 7-Eleven, under pressure from so-called corporate raiders, was forced to execute a leveraged buyout to protect the company from an unfriendly takeover. Shortly after the leveraged buyout was completed, virtually every other company in America that sold gasoline decided to restructure their gas stations and create convenience stores.

Where 7-Eleven had once been nearly the only convenience store chain in America, suddenly, almost overnight, the company was overwhelmed with competition from many of the largest and best-financed companies in existence at the time—namely all the big oil companies. The convenience store business had now gone mainstream and was forever changed.

These changes forced 7-Eleven into bankruptcy, due to the heavy debt load from the leveraged buyout and the resulting dramatic drop in sales and revenue due to the onslaught of competition. The bankrupt company was sold to its largest area licensee, the company that operated all the 7-Eleven stores in Japan. As part of the bankruptcy, the Cityplace land was sold at a substantial discount to create a tax loss that was needed by the company.

Swearingen: In 1990, I left The Swearingen Co. and formed Barclay Commercial Group, with offices in The Crescent. Soon after that, a long-time friend moved his small brokerage operation in with me. I was familiar with the new players who would control the fire sale of the remaining 150 acres of undeveloped Cityplace land.

We teamed up and brokered the 150 acres to a Fort Worth investment group for a reported $24 million.From 1991 through today, this group, embarked on a successful 23-year program of master-planning, re-zoning, and selling land to developers. Most recent sales topped $100 per square foot for the land.

West Village was created with tight controls on uses, including upscale, high density, urban retail and multifamily.

In 1993, I was involved in the process which, in 1995, culminated in the sale of the empty American General building at Central Expressway and Carroll on 14.25 acres to ACS, creating a 27-acre ACS campus. ACS was eventually sold to Xerox.

In August, 2013, King and I facilitated the sale of the north portion of the Xerox campus to a developer who has plans yet to be announced.

7-Eleven went on to move its headquarters to Lucy Billingsley’s One Arts Plaza in the Arts District. (Now it’s reportedly looking to move to another Billingsley development in Irving.) The company’s former headquarters, a multitenant facility called Tower at Cityplace, was recently purchased by Florida based Parmenter Realty Partners. Its plans for the surrounding land may include multifamily, hotel, and retail. The property can support more than 600,000 square feet of additional development with a height limit of 175 feet. More than 30 percent of the office tenants and nearby residents now use DART and the McKinney Avenue Trolley.

The area first platted in 1890 as a small single-family residential community has become one of the most important areas for development in the city of Dallas. Although the vision has evolved since the Thompson family first began assembling the land more than 30 years ago, with plans adapting to the changing times, Cityplace continues to hold its rightful place as a very important part of the real estate fabric of Dallas.

Wayne Swearingen is a principal at Glacier Commercial Realty. Contact him at [email protected]. C. King Laughlin is president of King Laughlin Co. Inc. Contact him at [email protected].

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