Loading...
NL Cypress-CS071101THE TROUBLE STARTS Where the hell is North Lake? How did it wind u pa Dallas? over it? And why is everyone suing By Trey Garrison ORTH LAKE IS A FUNNY THING TO LOOK AT ON A MAP: A LITTLE artificial lake and its surrounding land north and west of Dallas proper, just over a rise on the western side of Valley Ranch. It's maybe two miles from DFW Airport as the crow flies and a stone's throw from LBJ Freeway. South Belt Line to the east, Hackberry to the south, and East Belt Line to the north bind its roughly 3,000 acres. The whole of it is surrounded by coppell and, to a lesser extent, Irving. What makes it odd is the flag that flies over this little outpost is the gold -seal- in -star banner of the city of Dallas. Even though North Lake isn''t in look like the Dallas. In another time and place — medieval Italy, perhaps—it ci states would beachhead of a city- state's imperial ambitions, and opposing city-states their citizens to war over the invading Dallas hordes. Siege engines and battering rams would be constructed and peasant armies conscripted to drive out the interlopers. And, in a way, that's exactly what's happening. In this case, the engines of war are lawsuits and public relations blitzes. And the invasion comes in the form of a 600 -acre master - planned, mixed -use com- munity dreamed up by Dallas development doyenne Lucy Crow Billingsley. The name of her planned development even has a vaguely Mediterranean city -state ring to it: Cypress Waters. It would bring more than 10,500 housing units to 94 NOVEMBER 2007 Z 5 s \\ \ lil Coppell school officials worry about the strain on lmost high - performing district that's already operating that a prime 100 percent capacity. Lucy Billingsley d be washed. development opportunity co q the little outpost of Dallas. That's about 30,000 people —or twice the population of Addison in one - eighth the space, as Irving Deputy Mayor Pro Tem Beth Van Duyne derisively noted at a zoning hearing. And while Cypress Waters would sit almost entirely within what are legally Dallas city limits (the retail portion would be in Irving), it would be square in the center of Coppell Independent School District. Coppell school officials worry about the strain on a high - performing district that's already operating at almost 100 percent capacity. Neighbors worry about the effect of such a dramatic influx of people on the small -town, orderly feel that drew them to Coppell. Billingsley worries that a prime development opportunity could be quashed by local potentates and partisans. And what of Dallas, the modern -day Florence in this tale? City leaders appear eager to please Billingsley, whatever the cost. And it is a huge cost. Too, they have made it plain what they think of the con- cerns of Coppell and Irving leaders. To paraphrase: "Tough luck, guys." A Lake Is Born LIKE MUCH OF DALLAS, NORTH LAKE IS artificial, its history is short, and it exists because of the energy business. Back in the 1950s, Dallas Power and Light Co. (the forerunner to TXU Corp.) needed a lake to serve as a cooling reservoir for a new elec- 'M } v tric plant. The city annexed 3,000 acres, and from 1956 to 1957, DPL built a compacted earth -fill dam with a spillway elevation of 510 feet. The lake it formed covers about three square miles, according to C.L. Dow - ell's Dams and Reservoirs in Texas. To this day, the lake proper is not part of the regional reservoir system. In 1959, the first of three gas -fired generation units was built. The other two followed in 1961 and 1964. Throughout the 1970s and 1980s, the plants quietly did their thing, provid- ing energy to the growing North Dallas and suburban communities. A park was built on the shore of North Lake, at vari- ous times falling under the aegis of differ- ent local authorities. By the late 1970s, the 96 NOVEMBER 2007 fill fit fit ''� " 44, M lake became popular with local fishermen, despite the low nutrient levels that limited fish growth. The Dallas Parks and Recre- ation Department fertilized the waters and stocked the lake with bass. For all intents, it was just a little piece of green space with- out much demand. Today, the North Lake power plant is owned by Luminant Power, and the three generation units are nearing the end of their operational life spans. They operate only seasonally, during peak demand months. Although they have been in mothball status since 2005, they have notbeen slated for clo- sure. The land around North Lake isn't par- ticularly attractive. Nor, though, does it bear any sort of irreversible industrial damage. A quick hop of a fence and a stroll around the grounds show healthy swaths of scrub, hackberry, wildflowers, and other unkempt native greenery. The dirt is like any other North Texas soil. The waters of North Lake do look uninviting, and swimming has never been allowed here, but that's to be expected from an urban lake. The worst blemishes on the scenery, making it hard for even an experienced real estate observer to imagine an upscale master - planned community, are the high- capacity power lines that crisscross the inner perimeter of the grounds and the ugly silhouette of the generation units on the northeastern shore. But there's a lot of dirt being turned across Hackberry to the south and Belt Line to the west. Duke / NOVEMBER 2007 97 Realty andTurner Construction arebusyby the looks of it No doubt, its location alone makes North Lake prime real estate. A Woman With a Plan SUCH A LITTLE PIECE OF LAND WITH So little history. It's hard to believe North Lake is the source of so much contention and mil- lions of dollars of litigation. It started in 2004, when Luminant decided to sell some of the land around North Lake and enlist- ed Cushman & Wakefield to market the property. Crow Billingsley Development Co. bought a 355 -acre plot for a reported $173 million in September of that year, and Lucy Billingsley announced her plans for Cypress Waters. (She's since bought two more parcels -86 acres in 2006 and about 215 acres in 2007.) If the Italian city -state metaphor holds, then Billingsley is the Catherine de Medici of the tale. Patron of the arts, described by some as ruthless in her dealings (meant as a compliment), she was born into one of the royal families that helped create modern Dallas. Throw a Neiman Marcus credit card in any direction in the city limits and try not to hit a property that was built, owned, or leased by the Trammell Crow Co. at one time or another. And yet she's been able to step outside the shadow of the Crow name on her own merit. While some of her earlier forays into development, such as International Busi- ness Park and Austin Ranch, might seem modest by Dallas standards (if lucrative nonetheless), her latest, highest - profile development is Medici - esque. Billings - ley's One Arts Plaza —a $125 million high - rise that combines residences, offices, and restaurants —is 24 stories of commerce overlooking the Dallas Arts District. Around the office, Billingsley is a 5 -foot- tall whirlwind ofbig ideas. She leaves it to her people to connect the dots. But while she's more about the big picture than mi- cromanagement, she pays close attention to what gets done. During a recent open house of condos atop One Arts Plaza, she displayed an encyclopedic knowledge of the design and materials of every square foot of the condo layout. It seemed clear she'd had a hand in everything from the tub design to the drawer pulls. And in August, she sat through days of court testimony See NORTH LAKE On p. 180 NORTH LAKE continued from P. 97 regarding one of several lawsuits against her Cypress Waters project —a lawsuit that was decided in her favor against the city of Coppell. She certainly has the ear of city leaders. Former mayor Laura Miller championed One Arts Plaza, and council members fawn over her. Mayor Tom Leppert met with Billingsley on the North Lake project in early September. Leppert and Miller de- clined to talk for this article, but if there's any barometer to how city leaders feel about Billingsley, at the unveiling of One Arts Plaza, Miller called her "Dallas' fa- vorite daughter." Owing to multiple scheduling conflicts and the death of her company's CFO in a car wreck in mid - September, Billingsley couldn't talk to D Magazine about her Cy- press Waters development by press time. Meanwhile, down at Dallas City Hall, few wanted to talk for this story, using the usual "can't discuss pending litigation" dodge. But there was one group of people who had no problem speaking about Cy- press Waters. Enter the Huguenots of the saga: the city of Coppell. They haven't seen the outgoing, generous side of Billingsley, only her ruthless side. They don't see a great new development on their southern frontier. They see an invasion. With a population of about 40,000, Cop- pell is almost fully developed. There's a quiet tidiness to much of it. The setbacks seem a little farther, the lawns a little more manicured. It suffers neither the overde- velopment of Irving nor the underachieve- ment of nearby Farmers Branch. The me- dian household income is about $115,000, and home prices are far more competitive than in, say, Southlake or the Park Cities. Think of Coppell as the middle -class option for those who want to escape the troubled Dallas public schools. In fact, Coppell's school system is highly regarded, one of the reasons people move there. The Coppell ISD is ranked first in school districts in Texas with more than 10,000 students for Gold Performance Acknowledgements. In 2007 Coppell be- came a "recognized" district in the state's accountability rating. The high school boasts a 10,000 -seat football stadium and an indoor football fieldhouse. 180 NOVEMBER 2007 / DN,51MGA2.'IN, . €ON1 Jim Witt is Coppell's city manager. He's easygoing and has a voice reminiscent of John Goodman's. He's also the public face of Coppell's opposition to Cypress Waters. The city and the school district have taken a shotgun approach to their legal strategy against the development, firing away in several directions and seeing what hits. But if one phrase sums up the frustration it's this: "We just can't handle that kind of growth that fast," Witt says. Coppell Mayor Doug Stover says Cypress Waters is the biggest challenge his city has faced. As it sits on the drawingboards, the development would bring 30,000 new resi- dents to the area and more apartments than currently exist in all of Coppell. Granted, the new residents would technically live in Dallas —but they would use Coppell city parks, Coppell recreation facilities, Cop- pell roads, and Coppell libraries. They'd be miles from the nearest Dallas police and fire stations. And, of course, Cypress Waters would be smack in the middle of Coppell ISD. That's between 2,500 and 3,600 new students in Coppell schools, already operating at close to full capacity with about 10,000 students. "We can't absorb that many kids without new facilities," says Jeff Turner, superin- tendent of the Coppell ISD. "We have to have them work with us to minimize the impact. The schools here are why people move to Coppell:' Witt says he understands there will be development, and he says the city doesn't want to interfere with anyone's property rights, but there has to be some kind of compromise. It won't be coming any time soon. Initial meetings between Billingsley and Coppell didn't go far — mainly because Coppell didn't really know what it wanted so much as what it didn't want, i.e. Cypress Waters. To this day, Coppell is all over the place. They'd love to see North Lake re- zoned for industrial. They'd like to see it drastically limited to maybe a quarter as many households. They'd like Billingsley to donate land for schools and help pay for them. They'd like Billingsley to donate land for parks. When it became clear that Billingsley wasn't in a donating mood, the lawsuits started. Coppell ISD filed to condemn 125 acres for new schools. (At press time, the judge ruled in favor of the school district.) The city of Coppell filed suit to condemn about 70 acres of Billingsley's land for a lV S( q h ai d e, b� n NN rf tE 01 b: it qi P4 h( w a 64 ci vc L; Bi h: th C( la lic do C( of as fo ar sa A: Ja RE Cc in; 14Y nc variety of reasons, even though none of the land sits within the Coppell city limits, and some of the various uses for the land are questionable. The city and Mayor Stover have said that in addition to using that 70 acres for parks, they would use some of the land to build affordable housing —or even flip it to a developer or nonprofit to build affordable housing. Which, since the move would benefit a private developer, would seem to violate eminent domain reform that became law in Texas in Sep- tember 2005. Billingsley countersued, claiming abuse of process and eminent domain fraud. The fog of war hadn't gotten any clearer by the time the Dallas City Council met in January 2006 to consider Billingsley's re- quest to rezone her initial 350 acres. Cop - pell's Mayor Stover had said publicly that he'd meet with Dallas council members who would be voting on the zoning issue. "Those who were not in j ail; Stover added, a reference to an unrelated FBI investiga- tion into dealings at Dallas City Hall. Coun- cil members made note of the slight They voted unanimously to rezone the North Lake land in Billingsley's favor. Those two extra parcels of North Lake of this city is non- Anglo." And consider- ing that Coppell has talked about building working -class housing on the land it wants to condemn, he's got a point. Coppell says TXU, Billingsley, and Dal- las have shown blatant disregard for their community, and they vow to fight "We will prevail!" Stover tells his voters like he's ral- lying troops. The three sides accuse each other of treading over borders and violat- ing their own sovereignty and property rights. They've all vowed to fight to the finish, no matter how long or expensive the campaign. For her part, Billingsley has made state- ments that could be interpreted, if one were so inclined, as taunts. "It's a shame that they never looked at this property and thought it might be developed," she once said publicly. What Will It Cost Dallas? ON TOP OF ITS LEGAL BATTLES WITH Billingsley, the city of Coppell opened up another front by suing the city of Dallas, claiming the January 2006 rezoning was a fraud. Coppell pointed to a fiscal impact analysis conducted by the Dallas city staff and released December 14,2005—almost One Dallas City Hall official who asked not to be identified says, "The Cypress Waters deal no more makes sense for Dallas today than it did then." Billingsley subsequently bought? They haven't been rezoned, but it's a sure thing that if they are, more lawsuits will follow. Coppell has already spent $2.6 million on lawsuits; Coppell ISD in excess of $1.5 mil- lion. The city of Coppell's initial eminent domain lawsuit was dismissed in Dallas County Court in September. That decision, of course, is being appealed. No quarter asked, none given. Officials from Dallas and Coppell haven't formally spoken to each other since Janu- ary 2006. But occasionally one side will say somethingthat stokes animosity anew. As when former Dallas council members James Fantroy and Maxine Thornton - Reese played the race card, alleging that Coppell's opposition to multifamily hous- ing, whose residents are more likely to be lower income, amounted to racism. "That's bulls - - -," Witt says. "This has nothing to do with race. Twenty percent six weeks before the January 25 rezoning vote. The analysis states that the Cypress Waters development, should it include 10,000 residential units, would be a net drain on the city of Dallas for the next 20 years to the tune of $876 million. The main costs in the analysis were providing fire and police services, as well as building the regular infrastructure to the little out - parcel of Dallas. At full build out, the report says, Cypress Waters would generate property and sales taxes of $158.7 million over 20 years. Even with that tax revenue, Dallas would still be in the red for $876 million. "Why would any city do that ?" Witt asks. 'That's the $87 million question:' Some Dallas council members say they weren't aware of the study at the time of the rezoning. Former mayor Laura Miller declined to comment. Billingsley's people and Dallas officials have vaguely ques- / NOVEMBER 2007 181 tioned the fiscal analysis's findings, saying it's based on erroneous assumptions or on preliminary figures that are no longer valid. But the fact is, no formal report has since been produced to contradict it. One Dallas City Hall official who asked not to be identified says, "The Cypress Wa- ters deal no more makes sense for Dallas today than it did then." What does the future hold? Coppell offi- cials say they hope they can work with the new members of the Dallas City Council and Mayor Leppert, but they're not letting up their barrage. Neither is Billingsley. Usually when a developer buys land for a big project, it is anxious to wheel and deal with local government bodies so it can get the dirt turning. That doesn't appear to be Billingsley's intention, though. Maybe she is just standing firm on principle, refusing to yield an inch of her property rights. But the reality may be that Billingsley doesn't want to build. Right now the com- mercial real estate business isn't boom- ing. Thanks to a little problem called the subprime mortgage blowup, neither is the housing market (though Dallas appears to be escaping the worst of the slowdown). Up until recently, the hardest part about getting new commercial projects under way has been the rising cost of construc- tion. That $125 million Billingsley built One Arts Plaza for? That's a steal just two years later. Now the problem is not just the cost of concrete and copper. "It's the cost of money. Financing is get- ting harder," says Dallas developer Neal Sleeper, the man who turned a dead little pocket of Uptown into West Village and Ci- typlace over 15 years. He's one of a number of prominent Dallas developers who have seen projects that are on the boards get stuck on the boards. "That's what's slowing everyone. We've been working on finish- ing Cityplace out for two years now, and it's still in a holding pattern:' So for Billingsley, the strategy may just be to wait out the real estate market's slow- down. A few million in legal fees might be the cost of waiting for a more auspicious time to get her projectbuilt Her opponents' pockets aren't so deep. She can wear down their resources while preserving hers, and hold out until the time is right to strike. Rome wasn't built in a day. Nor, appar- ently, Cypress Waters. 0 Write to treyg@dmagazine.com.