Vacant Dallas First National Bank tower is getting a record-setting redo to the tune of $450 million

May 7, 2019
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A new team has come to the rescue of downtown Dallas' biggest building project.

Revival of the First National Bank tower, vacant for almost a decade, is expected to cost almost $450 million. It's the last major downtown building to get a remodel.

The 52-story landmark skyscraper is undergoing one of the largest urban restoration projects in the country and the largest ever in Dallas. The Elm Street building will be turned into a combination of apartments, hotel rooms, retail and office space.

Plans to repurpose the 1.5 million-square-foot office tower have been in the works for over eight years. During that time, the black glass and marble high-rise has had three different owners.

Now the developer who's taking over the tower reboot promises to have work complete by the end of 2020 — restarting the project after more than a year of delays.

Developer Todd Interests of Dallas and its financial partner, Moriah Real Estate, have already redone one downtown Dallas skyscraper, the 30-story One Dallas Centre.

As new players in the First National Bank project, they are taking the lead from California-based Drever Capital Management, which bought the building out of bankruptcy three years ago. Drever will remain a "solely economic, non-managing minority limited partner" in the development, according to Todd Interests.

"We are moving ahead as fast as we can," said developer Shawn Todd. "We have tight timing constraints to get this building finished by the end of next year.

"Everyone is working to make this happen."

The developers need to finish the project on time to get almost $100 million in historic tax credits and $50 million in Dallas tax increment financing that make the project viable.

"This will be the largest historic tax credit deal in Texas," Todd said. "This is the last remaining truly historic building in downtown Dallas to be redeemed.

"This building was a statement for our city at one time, and it will be a statement again."

Landmark beginning

Opened in 1965 as the home of First National Bank, the 1401 Elm St. tower was designed by noted Dallas architects George Dahl and Thomas Stanley.

"It's a landmark building downtown with its scale," said David Preziosi, director of Preservation Dallas. "Buildings like this were statement buildings — built to make statements for the owners, which were banks and insurance companies."

The more than 40-story black glass tower with white pinstripes rises out of a 2-acre, nine-story base building covered in white marble.

"When it opened, it was the tallest building west of the Mississippi River," Todd said. "We've always had great interest in the building.

"We were enamored with the architecture and history."

Previous owners gutted the tower, removing tons of toxic asbestos. It was the largest asbestos remediation project in the state's history.

"Maxwell Drever and his team gave it all they had and should be applauded for their efforts and for keeping the property out of foreclosure," Todd said.

Two years ago, work crews stripped all the white Greek marble off the exterior of the skyscraper to be refurbished for installation.

Since then, construction on the project slowed to a snail's pace due to funding issues, which caused speculation that the deal was dead.

"It's been going in fits and starts," said general contractor Wade Andres of Andres Construction. "But at the end of the day, it will be incredible for the city of Dallas when it's completed."

Andres has been involved with the project for more than three years and stuck with the development through different owners.

"These things are very difficult to get done," he said. "The commitments all of our subcontractors and vendors have made shows the importance everyone feels this project has to Dallas."

Todd Interests arranged financing for the development from Starwood Property Trust and Octagon Finance. American Housing Partners, a Berkshire Hathaway company, and Stonehenge Capital are buying the historic tax credits.

Dallas' Merriman Anderson Architects designed the renovations. Thompson Hotels, a unit of Hyatt Corp., will occupy the luxury hotel in the building.

"This will be their flagship location in the state of Texas," Todd said.

Finding the marble

Work crews have already begun reinstalling more than 30,000 pieces of marble that were removed from the tower in 2017.

"One of the things that was critical to the project was making sure all the marble was still there," said Todd Interests' Philip Todd, who traveled to fabrication plants in China to confirm that the stone was intact. "That marble came from the same quarry in Greece where they got the stone for the Parthenon.

"It's like putting Humpty Dumpty back together again to get it all reinstalled."

Work crews have resumed construction on the 10th-floor deck surrounding the tower, which will be used for a bar and restaurant, fitness center and outdoor green space.

The apartments will be at the top of the tower, the hotel rooms in the middle. The lower levels of the high-rise will house retail space, office, parking and function rooms for the hotel.

The First National Bank project is even more complicated than the recent redevelopment of downtown's landmark Statler Hotel, which was converted into hotel and apartment space at a cost of about $250 million.

Like the Statler, the Elm Street tower restoration is a milestone for revitalization of Dallas' downtown.

"The First National Bank building is absolutely one of our key projects," said Kourtny Garrett, CEO of the economic development group Downtown Dallas Inc. "It's the last of our major vacant buildings. In sheer size, it's the largest-ever redevelopment."

Turning the lights on in the 54-year-old tower will also bring life to an area of downtown that's been stagnant since the high-rise closed in 2010.

"The specific location right in the core is pivotal," Garrett said. "It's in the heart of the Main Street district on the DART line.

"The magnitude of this project and its impact on downtown is important. I think we finally have the team to make it happen."