The idea was novel for 1974: a new middle-class housing addition for Dallas, but not in the suburbs. Instead, Dave Fox of Fox & Jacobs planned to build near downtown. The idea got a big boost about a year later when the City Council passed an ordinance agreeing to buy most of Fox’s land if the project failed to materialize. Now, three years later. Fox has received yet another boost, this one carrying even more city money.
Several weeks ago the City Council raised its offer for the land from $2.25 per square foot to $3.25 per square foot. Although it wasn’t a great surprise that the Council was willing to raise the city’s stake, the speed with which it was done was amazing.
The Council went behind closed doors, swiftly voting 9-1 to raise the land purchase guarantee, suggesting that Fox, who wasn’t even present, can have pretty much what he says he needs. The lone dissenting vote came from Councilman Steve Bartlett, who doesn’t oppose the project, but objects to the haste in which the matter was considered. In short, Fox now has more reason than ever to believe his project will work – that he can acquire the necessary 50 or 60 acres of fairly contiguous land. Several times Fox has postponed his deadline for ultimately deciding whether he can make a go of the project or whether he will have to abandon his efforts. Each new postponement suggests Fox is deciding against cutting his losses and getting out of the deal, and indicates he intends to keep investing money, believing he can make it.
The Council voted to guarantee Fox up to $3.25, not only for any land he will be acquiring, but for land he already has acquired, some of it at prices barely half the $3.25 guarantee. Now, for example, he can buy a lot for $4.50 a foot, so long as he already has another lot in hand for $2 a foot, because the average price of the two comes out to $3.25, the new city limit. Fox now has about 75 percent of the land he needs, and if it’s possible to buy the remaining 25 percent, he should be able to do it at $4 and higher per square foot.
The Fox & Jacobs-City of Dallas relationship in the project has been remarkably smooth. Fox came up with the inner city housing idea in early 1974, a few months after the Arab oil embargo made Dallasites wonder if moving farther out into the suburbs was such a great idea after all. He began anonymously buying up several hundred thousand dollars’ worth of near East Dallas land and then went to City Manager George Shrader to explain what he had in mind. City Attorney Alex Bickley, one of only a few City Hall staffers to know about Fox’s project, drafted an ordinance authorizing the city to buy Fox’s land if he failed. (The unusual ordinance makes the same offer to any qualified developer doing the same within two miles of downtown.)
Although a few reporters began noticing that someone was buying up lot after lot in East Dallas, no one figured out who. it was. After two years of keeping his secret, Fox finally came out of the closet in early 1977, fearing that some sort of expose would make a conflict of interest issue out of the fact that he was chairman of the Chamber of Commerce.
Although the city has greatly reduced Fox’s risk by agreeing to buy most of the land if the project fails, Fox still has some risk. First, he has been paying the personnel costs involved in handling the difficult land negotiations. Second, if he walks away from the project, Fox will incur two additional costs. He will pay part of the interest cost of carrying the land and at least temporarily, Fox will be stuck with a minimum of $500,000 worth of East Dallas land, which the city is not obligated to buy.
On the other hand, if Fox succeeds in acquiring the land, he has plenty to gain. He will become the first developer in America to pull off such a feat with the aid of a city, a prestigious accomplishment. He also should fare nicely selling the homes. The East Dallas land is bordered by Baylor University Medical Center, which has 4,000 employees within walking distance, and downtown, with 102,000 employees. Last but by no means least, Fox will own quite a bit of land scattered around his East Dallas project, land worth far more if the Fox & Jacobs project succeeds than it ever was without it.
Several years ago homebuilders attending their national convention in Dallas were almost laughing at the city’s idea to encourage inner city housing by teaming up with private developers. At the industry’s Dallas convention in January, 1978, Fox reports, they weren’t laughing so hard anymore. If the Fox project succeeds, look for a developer perhaps to try the same thing in Oak Cliff, possibly on the Trinity’s west bank.
Related Articles
Business
Wellness Brand Neora’s Victory May Not Be Good News for Other Multilevel Marketers. Here’s Why
The ruling was the first victory for the multilevel marketing industry against the FTC since the 1970s, but may spell trouble for other direct sales companies.
Business
Gensler’s Deeg Snyder Was a Mischievous Mascot for Mississippi State
The co-managing director’s personality and zest for fun were unleashed wearing the Bulldog costume.
Local News
A Voter’s Guide to the 2024 Bond Package
From street repairs to new parks and libraries, housing, and public safety, here's what you need to know before voting in this year's $1.25 billion bond election.