COVER STORY, AUGUST 2012

OPPORTUNITIES ABOUND
Small metros have plenty to offer investors, developers.

When thinking about cities in Texas, landmark metropolises such as Dallas, Houston, San Antonio, Austin and Fort Worth typically come to mind first. Rarely do Texas cities outside of this core group get brought up as major players in Texas’ commercial real estate market.

Employees of municipalities in Farmers Branch, Forney and Midland have something to say about that.

With an active economic development department, business incentives and developable land, smaller Texas cities have plenty to offer potential investors and developers.

Allison Cook of Farmers Branch, Kim Buttram of Forney and Genora Young of Midland outline what’s being built in their respective markets and what opportunities abound for future developments.

FARMERS BRANCH

Conveniently located on the northwestern border of Dallas, Farmers Branch offers businesses, residents and visitors a hometown feel with big city convenience, and all in the heart of one of the most exciting metropolitan areas in the country. From its place in the geographic center of the Dallas/Fort Worth Metroplex, Farmers Branch is minutes away from three vital airports and is served by two major interstate highways and two tollways along with Dallas Area Rapid Transit’s Green Line light rail service.

Currently, Farmers Branch has a wave of new developments, primarily in the multifamily sector. A featured redevelopment area is Mustang Station, near Valley View Lane near Interstate 35 East. After decades of planning for the area adjacent to City Hall, the Farmers Branch DART station will now include this mixed-use development by Western Securities, with 257 multifamily units and the potential for 10,000 square feet of ground floor retail. Construction commenced in June with completion slated for the third quarter of 2013. Mustang Station has been a catalyst for new construction in the area, including a proposed single-family residential project consisting of 29 homes. In total, Farmers Branch has more than 2,279 multifamily units approved and in the development phase for 2012, representing an investment of nearly $300 million.

Mercer Crossing is another area of serious potential for Farmers Branch. Located north of Interstate 635 and directly west of I-35E, Mercer Crossing boasts more than 800 acres of undeveloped land. Recently, 225 acres in Mercer Crossing have been listed for sale with Henry S. Miller’s Darrell Hurmis and Ben Chien. “The Mercer Crossing land is the population epicenter of the Metroplex. It is one of the largest infill sites with unlimited development potential,” says Darrell Hurmis.

Farmers Branch is bordered by the I-635, LBJ Freeway corridor which has been in a state of transition with a five-year, $2.7 billion expansion project. LBJ Express commenced the project in 2010 and is expected to be finished in 2015. “Once completed, the LBJ Express will provide commuters with a choice in their commute that is innovative and revolutionary,” says Andy Rittler, corporate affairs director for the LBJ Express Project. The City of Farmers Branch offers competitive tax incentives for companies moving to the city. With the centralized location in the Metroplex, economic incentives and a low tax rate, Farmers Branch continues to be one of the premier choices for businesses and residents.

— Allison Cook, business development specialist for Farmers Branch’s Economic Development Department

FORNEY

Forney Medical Center is part of the City of Forney’s vision to become a healthcare hub.

Forney may seem like just one more town on the way out of town, but this city located 20 minutes east of Dallas is, in fact, the 15th fastest growing in the Dallas/Fort Worth area.

Harboring 225 percent growth in little more than a decade, Forney’s leadership seems to have successfully maintained the city’s vibrant, family-centered lifestyle in spite of the population explosion. Its success in attracting the amenities the swelling population demands likely has much to do with that.

$65 million in 2012 road construction alone is evidence of the city’s commitment to the infrastructure its 2,000 acres of planned medical, office, corporate, retail and residential projects will require.

Part of the city’s stated vision is to become a healthcare hub to the area. To that end, Forney’s Economic Development Corp. has worked with land owners to set aside 135 acres for a medical professional/services/education campus.

The demand is apparent. Forney EDC offers the following statistics from a 2012 survey of medical needs commissioned by the city: 92 percent have health insurance; 62 percent have to leave the area to get the health services they need; and 40 percent cite the key factor in their choice of care as proximity. Catalyst, the company that performed the survey, calculates the Principal Service Area to contain 266,000 people.

In 2008, the first phase of Forney’s 50,000-square-foot Medical Plaza was completed — and it has been more than 95 percent leased ever since. By the first quarter of 2013, an additional 32,000 square feet of leasable space comes available as part of its first expansion. It will feature a full-service emergency department complete with helipad.

Forney’s tagline, “City Without Limits,” has a double meaning. It refers to the population it serves in unincorporated areas outside city limits — part of the larger Forney Independent School District and it also embodies the city’s unstoppable momentum.

According to Mayor Darren Rozell, “Forney address or not, kids in Forney ISD or not … to all around us who call Forney home, we are a hub for services, shopping, dining and recreation. We expect to soon be their hub for healthcare and employment, too.”

— Kim Buttram, director of economic development for the City of Forney

MIDLAND

Nothing succeeds like success. Wrapping up a decade of the fastest-growing average gross metropolitan product (GMP) in the nation, the City of Midland is bursting at the seams. With housing development crucial to accommodate a rapidly growing need for expanding workforce, community leaders are focusing on the development of downtown Midland to meet the demand for housing, retail and entertainment space.

Recent activity includes Cancun Bar and Grill quadrupling its footprint in Wall Tower. In the neighboring area, Basin Burger House and Brass Munky Tapas Lounge are under construction. Then, there are the housing developments. Kolt Development will soon break ground on the $11.6 million, 120-unit Wall St. Lofts, a multifamily and retail development located just east of the Midland Center. Concho Resources Inc. is retro-fitting the old First National Bank into condos, to the tune of approximately $10 million. Down the street Concho has another $60 million “super block” development. Immediately to the east of the lofts will be a new city-owned, multi-level parking structure that has an estimated cost $5 million.

Mayor Wes Perry, a native Midlander, is leading by example, with, as he says, “skin and heart in the game.” Perry and his investors are infusing approximately $10 million of private funding towards the renovation of Wall Tower with no incentives requested. He fully understands the potential return on investment for his hometown and for investors willing to build, rebuild, renovate or repurpose now, with an eye to the future. He says, “Midland’s economy is very different than the boom-and-bust cycles of the past. This economy is based on new technological advances in drilling and completion techniques. The real estate market typifies Midland’s motto, ‘The Sky’s the Limit.’”

Determined to capitalize on the opportunities that the booming economy offers for long-term development, the city, Downtown Midland Management Corp., Midland Development Corp., Tax Increment Reinvestment Zone, Midland Chamber, Downtown Consortium and business leaders created tax incentives, funding opportunities and zoning/planning support for investors committed to building new properties or repurposing space in the downtown area.

To leverage these investments, a downtown development director works with every potential developer and every interested property owner to maximize every opportunity for success. As Midland City Councilman John James states, “At no time in the past 40 years have the opportunities for development in downtown Midland been greater. During the next three years, public and private partners will invest more than $100 million dollars in creating a downtown where Midlanders and visitors can live, work and play. It’s an incredible time to invest in Midland.”

— Genora Young, PCED, downtown development director for City of Midland

©2012 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 553-9037.