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The Dallas Dirt podcast with Candy Evans takes you inside the real estate news stories you’ll find daily on CandysDirt.com and beyond, giving you more insight, juicier details, and the inside scoop from one of Dallas’ most well-connected real estate personalities.
April Towery: Welcome to Dallas Dirt.
I'm April Towery, the Dallas
City Hall Editor for CandyDirt.
com, and we are here today
with special guest, Scott Beck.
He is a developer and
CEO of Beck Ventures.
Is that the actual title?
That is.
April Towery: Okay.
so tell us who you are, what you've
done in Dallas and the surrounding area
So our company has been involved in
the real estate business for 52 years.
So predates me.
probably best known in the DFW Metroplex
for building out a town called Trophy
Club, which is west of DFW Airport,
about 10, 000 residents, two 18 hole
golf courses, master plan community.
and then we do apartments,
mixed use communities and other
things all across the Metroplex.
April Towery: Awesome.
And you are now, known for this project
that we are no longer calling Valley View.
We are calling it Dallas Midtown.
tell me, give us some history on that.
Well, it goes back, about 11 years
ago and, was approached at the time.
there was a City Councilwoman,
Linda Koop, and, we had just had
an opportunity to work on trying to
acquire the old Valley View Mall.
It had gone into bankruptcy, and the
idea was, is it really should be more
than just a Valley View Mall redo.
We should really be
thinking about a district.
it's the last parcel of land that's the
furthest north, in the City of Dallas
before you get outside the tax base of
the City of Dallas, and it's something
that Linda Koop had been thinking about.
for the past seven and a half
years at that time, 11 years ago.
And she was just about to term limit out
and really worked closely with her and,
neighborhood constituents, to create what
became the largest urban district rezone
in the history of the city of Dallas.
And so that property, not just where
Valley View Mall is, which is effectively
at the corner of Preston and 635, not
only did that get rezoned, but everything
from Preston Road To the toll road and
then from 635 to just north of Alpha road.
So it's 450 acres and
it was master planned.
And that really was the impetus of what
the city created a new zoning ordinance.
So it took 22 different zoning
classifications and 16 different
PDs, including, the PD, which was a
mall, and collapse that into one form
based zoning code, called Midtown.
, April Towery: Was the plan
always for housing on that spot?
Where Valley View is?
No, I mean the plan was for
a mixed use development.
and that's what the PD that
was put in place by Linda
Koop is still in place today.
So it's that same PD PD 887 or plan
development 887, which is what is the
guiding principle of the district.
And because it's a form based zoning code,
it's not specific in the type of use that
the buildings are, but the character of
it, a walkable mixed use neighborhood.
Let's say not too dissimilar
to Uptown or Victory.
That's the type of density
that this has been rezoned for.
So we're talking about anywhere up to
30, 40 story buildings that can be built
across the former Valley View Mall all the
way to the west to where the Galleria is.
And to give you a sense of size,
the tallest office buildings at
the Galleria are 26 stories, right?
So when you talk about something that's
35 or 40 stories, it's even taller.
And if you densified it across the
whole parcel, it becomes quite dramatic
and truly has an opportunity to
create, a satellite downtown Dallas.
We got the census.
We know what's happening
in the city of Dallas.
We are losing population density
in the city of Dallas, even though,
the DFW Metroplex is growing.
157, 000 people in the DFW Metroplex.
That's 400 new people a day.
And the city of Dallas
is actually shrinking.
April Towery: Why do you think that is?
Well, I think there's a number of
reasons why, but, you know, the biggest
reason is that the city of Dallas is
not constrained, by any physicalities in
terms of there's not mountains on one side
just kind of an unlimited
amount of suburban land.
And so effectively, you know, you
think about the city of Dallas
is like, a large animal, right?
And these little fleas that
are biting at its heels.
But these little fleas, which are these
surrounding suburbs, have all of a
sudden become large animals themselves.
You take the city of Arlington or you
take Frisco or Plano, even Richardson or
Addison, Farmers Branch, these cities
are forces to be reckoned with now.
And so Dallas has to, recognize
that and understand that.
April Towery: Well, you built a whole
city, so you have a lot of experience
in kind of working from the ground up.
Right.
And with Valley View, weren't there
like some asbestos issues and, you're,
you're dealing with a site that's been,
it had been a homeless encampment and
there had been a lot of fires, What
was the process and how long did it
take to sort of get to where you can
actually start doing what you came to do?
Yeah, so just from a clarification the
homeless encampments and the fires were
only in the last three months, right?
We announced that we were starting to tear
down the mall last September and you know
the city of Dallas has a policy that they
do not prosecute any theft below $500.
And so the minute you announce
something's coming down, the
copper thieves just go wild, right?
Because there's no prosecution of them.
And so, so we ultimately ended up
having issues with policing, issues
with fires, and then, you know,
just kind of mayhem breaks out.
The biggest problem when you decide
to take down a multi million square
foot structure that was built in 1967
and completed in 1972, is that there's
a ton of asbestos and environmental
issues that are inside of the building.
And so, once you as the owner turn that
over to effectively, groups that are
managed by OSHA and by FEMA and other
jurisdictional state regulators, right?
You really don't have
authority of that property.
A big fence goes up and then.
The process ensues, and so
that was a multi month process.
You know, it started back in 2023 in the
summer, starting all of the abatement.
And then ultimately, once that
was done, you could physically
start tearing down the building.
Unfortunately, in the two week process
between finishing the abatement
and tearing down the building is
when some fire started breaking out.
You know, and, and it became political
at the time, which we won't go into
right now, but ultimately it was just
a, you know, a set of unforeseen
circumstances or maybe they could have
been foreseen, these things happen.
And, fortunately, it was only a very
short window, that that happened
for, but make no mistake about it,
we've been doing this for, 11 years.
So I would have preferred that at
the time when working with Linda
Coop 11 years ago, immediately post.
getting the zoning in place that we
could have started a project, but that
unfortunately couldn't happen at the time.
April Towery: Where is the project now?
Like, what's the status?
If I were to drive by, what would I see?
So, if you were to drive by today,
you would see a vacant parcel of land,
some roads that have been put in place.
The biggest thing that's happened,
and that happened towards the end
of the year, which then allowed us
to start the demolition, is that
there was a big standoff effectively
between the development community
and the city of Dallas related to
whose responsibility was it to put
in the city infrastructure that's
not on our developer owned property.
Right.
And the city of Dallas wants
their cake and eat it too.
So they want all of this additional tax
base, but they're not willing to put in
the infrastructure around the property
in order to actually get the tax base.
When you think about Valley View
Mall, you know, let's say there
was, 100 or 120 toilets and,
five or six showers in the mall.
Let's say a few hundred sinks, but
there's not multiple millions of square
feet of retail and condos and office
buildings, which require a lot more
capacity for sanitary sewer and certainly
a lot more capacity for storm sewer.
And so those pieces have
to get put in place.
And the biggest piece is when they built
the 635 expansion, they put in a new, they
meaning Ferrovial, which was the Spanish
developer, and the City of Dallas put
in a new line, a new sanitary sewer line
under 635, that basically extends from the
Galleria, which is kind of the corner of
Noel Road, which is on the east side of
the Galleria, and 635 then goes under 635,
and for those of your listeners that are,
in Dallas, they know, like, where Inwood
Road is and where Jesuit is, the, the
school, right in front of Jesuit is where
it connects, that sanitary sewer line.
Problem is, is that that's on the
far end of the district, right?
That's on the west side of the district,
where this new planned development
887 district, the Midtown district
starts, which is the Galleria, and
then it goes all the way to Preston.
Well, the question is, is how do
you then drain all the sewer if
you don't have an upgraded line
that's in the 635 access road?
Now, the 635 access road is controlled
and owned by the municipality, right?
It is the city of Dallas and TxDOT.
Unfortunately, after Linda Koop, a city
council person came in place, a man
by the name of Lee Kleinman, and he
was dead set that it's not the city's
responsibility to do city infrastructure.
And so ultimately, after fighting
for years, myself and a couple of
the other developers decided, look,
we're just going to put it in.
So we put in a 10 million upgrade,
underneath the access road.
And instead of it taking, you know, the
city, which would have taken, let's say
a year, it took us almost three years.
Ultimately, when a private
developer is doing a public project,
there's a lot of back and forth,
there's right of way, right?
And so, you know, the city has the right
of eminent domain, they can get into those
duck banks, we had to build a tunnel.
underneath the access road in order to put
the new expanded sanitary sewer line in.
This tunnel was so large
you could stand in it.
It would have made El Chapo proud.
That's how big this tunnel was.
So, to answer your question
specifically, the beauty is, is
that all of this is now done.
The sanitary sewer line is upgraded.
That was completed in
September of last year.
The storm line going north is
completed , the property's ready
for development, all of the off site
infrastructure is in place, and some
of the on site roads are in place,
so we can actually start building.
And now it's just a matter of
designing the plans and starting.
April Towery: And I want to ask you
about what you're building there, but
first, forgive my naivety here, but
like, how does an elected official
supersede the way that typical day to
day sanitary sewer lines are installed?
Do city council members
typically intervene in these?
Well, so normally the city council members
intervene to the betterment or benefit
of, having development start, right?
In the city of Dallas, we have
multiple city council representatives
for multiple districts, right?
And these districts are the
size of large cities themselves.
So, you know, there's a couple hundred
thousand people just in the district
that Lee Kleinman at the time and
now Jaynie Schultz represents, right?
And so each of our city elected city
council officials are really their
own mayors of their own districts.
And so it's really incumbent upon
that city council representative
to be the champion of what's
going on in their own district.
And to answer your question specifically,
on your own property, you are correct.
When it's time for us to build
something on our direct property,
we draw our plans, we put our permit
together, we file our permit, and then
there's a back and forth with staff.
Unless you're asking for some new type
of zoning, that is the standard protocol.
But this isn't on our property.
This is in the 635 access road, a half
a mile away from our property, right?
And so you, you're now dealing, with
a whole different animal, right?
This is Public Works.
Public Works has their own timeline
of things that they want to do.
There's funding decisions
that need to be made.
There's allocation of funds.
And so that's when your elected
representative actually pulls the
purse strings and makes the decision.
And so, you know, Lee Kleinman was
hell bent on if there's any help that
the city is going to do anything on
anything, then that property needs
to have affordable housing on it.
And that was his MO.
It's really the MO that has continued,
along the path of his successor,
his handpicked successor, which is
Jaynie Schultz, and really a lot
of the council people are really in
favor of having affordable housing.
I too; We have an entire company, Anthem
Development, that builds workforce
housing within the DFW Metroplex.
So we do this work.
It's just some projects, it makes sense to
have them, in some projects, it doesn't.
And this happens to be one of
them, certainly at the start,
that doesn't make sense.
April Towery: Why?
Well, the biggest reason is because
we have a tremendous amount of
workforce housing and affordable
housing, in this district already.
Almost every apartment building
that is just immediately north of
Valley View Mall is affordable.
It's only affordable because
it's 1970s vintage, right?
There's plenty of that stock already.
The question is, is what is the
appropriate project to start?
To bring new life into an area of
an otherwise dead now removed mall.
And as a developer who's been doing
this for 40 years, and our company
for 52 years, I don't think it starts
with an affordable housing project.
And certainly it doesn't, start with,
hey, if the city of Dallas will put in an
eight and a half to 10 million sanitary
sewer line, we're going to encumber all
of the property with affordable housing.
Which is what which is
what the request was.
April Towery: Okay, and you
that was a hard no from you?
Yeah its
Scott Beck: it's a hard
no, I mean, it doesn't make sense.
It's irresponsible from
a developer perspective.
It's irresponsible quite
frankly from a city perspective.
It's irresponsible and at
the time I was significantly
disagreeing with Lee Kleinman.
Look, when Linda Koop asked us to
get involved with this project, and
then we started to get involved,
what we didn't want to happen was
what happened to Prestonwood Mall.
And for, again, those of your listeners
who are listening to this podcast today,
they'll understand that, especially if
they lived anywhere near Addison at the
corner of BeltLine and the toll road, that
entire area used to be Prestonwood Mall..
And today there are a bunch of
big box retail and just open
surface parking lots, right?
That's what we got.
We could have gotten something incredible.
quite frankly, something incredible
happened in the old Sakowitz village,
which is where the Whole Foods is
and some of the other restaurants
and, Mi Cocina and the new AMC.
That beautiful deal that Steve Lieberman,
Alan Shore, and the Retail Connection put
together with Lincoln Property Company,
which is the same name of the Lincoln
Center that we're in today, right?
That was a beautifully done project.
It's how you take, something was
failing the old Sakowitz village
and rethink it appropriately.
What you don't want to do is tear down
the Valley View Mall in the center
of the population density of the city
of Dallas, the last parcel of land
where we can have a satellite downtown
to be something that is a competitor to,
let's say, Legacy West or the PGA or,
you know, things that are going on in
Arlington, and change it from what it was
into just a bunch of affordable housing.
Like that, that makes no sense to me.
I live in Dallas.
I pay taxes in the city of Dallas, and
so to me it's really important to not let
it go that way, and so fortunately we've
had the opportunity for the past 11 years
to make sure that that didn't happen.
April Towery: I want to talk to you
about the, branding of this area.
It's been called Valley View.
It's been called, you're
calling it Midtown.
Jaynie Schultz, the council
member for District 11, is calling
it the International District.
What is this place and what
are you going to do there?
What is the appropriate use and what
are you going to start off with?
Scott Beck: So, I think
those two things can coexist.
I think the Dallas Midtown
District makes sense.
That was what Linda Koop called it.
She called it Midtown, the plan
development ordinance called
it Midtown, at the time, right?
And so, I'd love to take credit
for coming up with the name.
I didn't actually come up with the name.
but I do think it's an appropriate name.
Because it's the center of the
population density of the city of Dallas.
to me, Midtown makes sense because it's
a geographical location, international
district, depending on who's listening,
like if you're a far right Republican,
you might think something very
different than if you're a far left.
liberal, What the international
district means to you.
to me, it should be a
place of commonality.
And so when you see these different
projects all across the country,
they usually don't take on some
kind of a political connotation.
And so I just don't agree with
the connotation that it's the
international district, because that
means something maybe different to
me than it would mean to others.
good, bad, or indifferent, right?
And so, at the end of the day,
the city council person who's in
place right now, Jaynie Schultz.
renamed the PD, the
International District.
Now, the people that own property in
the district, as well as us who own
the old Valley View Mall, we have
not changed the name of our project.
So our project is effectively the
100 acres of land that used to be the
Valley View Mall, and that project will
continue to be called Dallas Midtown.
I also, we also only control that land,
and the entire district is 450 acres.
Right?
And so, you know, there are multiple
other projects, whether it's the Muse
project that, it's called the Muse
at Midtown, that Pegasus Avalon, Mike
Avalon, who's, who's a known developer
in town built, that's called Midtown.
There's Midtown Pizza.
There's Midtown Barbers.
There's Midtown Pediatrics
in this district.
There's two or three other
apartment buildings which
have the name Midtown in them.
So again, this is, I think it's because
ultimately the reporters, everyone else
has called it Midtown now for 11 years.
I just don't think it's that easy,
especially when other people have
the names on multiple hundred million
dollar buildings, Midtown on it.
It's not going to change anytime soon.
But at the same time, in
theory, they could coexist.
You could theoretically have the
international district, and it
could be Dallas Midtown at the
international district, in theory.
I don't think that that's how
it should in practice play out.
I don't actually think that's how it
will play out, but time will tell.
April Towery: Okay.
And what are you, you are doing a
housing component there with Anthem?
Correct.
So, so Anthem Development is,
is, is a Beck Ventures company.
It sits on top of our Beck
Ventures platform, right?
And so, the first apartment
building that we'll build will be
a market rate apartment building.
that'll be a wrap apartment building, 285
units that'll be sitting on top of that.
facing Preston Road at the corner
of Preston Road and Dilbeck.
So again, for those people
that know this area.
If you're driving north and you cross
from Preston Hollow and you go across
635, that's a big interchange light.
And you keep driving, the very
next light you get to is a
light that's called Dillbeck.
And since 1967, that's been the
entrance to the old Valley View Mall.
And so that is going to be the main
entrance to the Dallas Midtown District.
And so the best way to think about
it, as you come in on that street,
for those that have gone to Legacy
West, Shops at Legacy, that kind of
a boulevard feel, that is what you'll
feel as you come into that street.
A very walkable, pedestrian
oriented street, large sidewalks,
large cafes, restaurants, shops.
And what happens is, is that that new
street will bisect the entire site.
All the way to Monfort.
So it basically sets up this procession as
you come from Preston Road, and as you're
walking, let's say, towards the Galleria.
As you come down that street, the last
thing you come to before you come to
Montfort is a large open space park,
which is actually, it'll be almost
three and a half times the size of
Klyde Warren, and that will be the
central feature that not me, but the
city of Dallas designed as part of the
master plan of the overall district.
And so, there's lots of pieces and parts
that are substantially more than just
us as one developer in the district.
April Towery: So what is
market rate these days?
Do you look at that in terms of how much a
square foot it takes you to build a unit,
or how much, what the rent looks like, or?
That's a great question.
so first of all, market rate is defined
with, as what are people charging for
market apartments in the district, right?
So right now that equates
to around $2.43 a foot.
And then when you talk about affordable
housing, normally the, federal statute
and most of the state statutes are,
80 percent of average median income.
And that's a statistic also that's
put out from a census perspective,
I think every three years.
and so, but there's an average
of what, the average median
income is of a certain census.
And then effectively you're supposed
to take that average median income.
And again, I don't, know exactly what
the percentage is, but I think it's
something like 20 percent of that
number is what you're supposed to be.
Paying for your annual rent.
And so you divide that number by 12
and then that should be what you pay
for, let's say a one bedroom apartment.
And so, if the city or the
municipality or the state or the
federal government require you to do,
let's say a 20 percent set aside of
your apartment in your space at 80%.
of AMI, right, or 20 percent or whatever,
that's where you get that number from.
And then the question is how does the
developer who had to pay actual real
dollars to build an apartment building,
how do they make up the difference between
if everybody was paying a market rate,
but now 20 percent of your building's not.
How do you make up that difference in rent
sometimes it's federal vouchers that
the person who is renting from you
will have a federal voucher from some
type of government grant program.
Sometimes you're willing to make that
sacrifice whether you're the debt
provider or the equity of the project.
You're willing to make that
sacrifice because the city gave
you some type of incentive.
They might've given you bonus density.
They might've helped you with
infrastructure, offsite infrastructure,
something of that nature, right?
They might've done something that says,
Hey, we'll give you this, but we want
to make sure that you lock in some
type of affordability in the district.
That obviously hasn't happened.
And also, as I mentioned earlier, I
think that these first projects should
be market rate because that's what
will drive the type of density the city
of Dallas zoned because ultimately
they want to have a me too effect.
Hey, if you don't want to be in
downtown Dallas, and everybody
wants to keep going north.
What do we have as the city of Dallas
to offer where we can retain you
within the city of Dallas tax base.
April Towery: And do you have
any thoughts on how to address
the city's affordability crisis?
Scott Beck: I think the concept
of affordability crisis housing
challenges is also eye of the beholder.
And so, you know, as we could sit here
today I could give you tons of statistics
that say we have a crisis and I could
give you tons of statistics that say,
we don't actually have a crisis, right?
And so to me, they're there.
A lot of them are political talking
points, depending on which side
of the aisle that you're on.
I think the important thing is to
find out, figure out something that's
sensible that actually can get built,
because for whatever reason, the city
of Dallas, we haven't figured that out.
other states, other cities have figured
out mechanisms to make that happen.
We happen to live in a state
in terms of the state of Texas,
where municipalities are not allowed
to mandate affordable housing.
So the way that they do
it is a quid pro quo.
We'll give you something, you give
us affordable housing in return.
City of Dallas doesn't have a
lot of excess disposable dollars.
And so it makes it difficult, for a
developer to step up and say, hey, we're
willing to do something, but they're
not, nobody's going to put equity into
a project where they can't get a return.
And so you, there has to be a quid pro
quo in order for it to actually happen.
For example, in California, they say,
look, we're not even going to give
you the ability to build an apartment
building unless you have affordability.
But you know, there's certainly over
the past 60, 70 years, there's been a
lot of programs, right, all across the
country, some that have worked better
than others and some that have failed.
I know I lived in Manhattan, now it's 26
years ago and, I had lots of friends who
were living in rent controlled apartment
spaces, but were paying market rates.
When you say, well, how is that happening?
And it's because, you know, Harriet,
who's grandma Harriet happens to be not
living in that apartment anymore, but
she's still getting the affordable rent.
And her niece is charging one
of my friends a market rate
and making the differential.
So there's like, there's so many things
that happen related to affordability.
I'll tell you one of the policies that
was really messed up in the city of
Dallas when Lee Kleiman was asking us
to put a blanket over our property.
With this affordable housing, the
city of Dallas current policy is
that if you take any city incentives,
there's a 20 percent affordable
housing set aside for all residential.
Well, you tell me how that works
in a for sale condo project.
So, you know, the policy that the city
of Dallas has in place, if you take
any incentives and you're building a
condo project, that would mean that
I would build a condo for 2 million.
Let's say that's the cost, right?
And let's say you're turning around
and you're selling it for two
and a half or 3 million, right?
20 percent of the units
would have to be affordable.
You'd have to sell that for $200,000
(*based on Area Median Income).
Well, you already know the market
is two and a half to 3 million.
So does that mean that we sell
something to somebody for $200,000
and they immediately then turn around
and sell it, for a multimillion
dollar profit, like just the construct
didn't make sense, in terms
of how things were set up.
Nor does it make sense unless someone's
actually paying for that cost,
certainly the developer's not going
to just simply pay for that cost.
Because dollars, equity dollars and
debt dollars are fungible, right?
These are large institutions that
are putting money into transactions.
If they can put money into transaction
A in a different city, a different
state, a different neighboring city
that doesn't have those qualifications
and they can make a higher return
somewhere else, wouldn't they go do
that as opposed to doing our project?
Right?
Money is fungible and so, you know,
we have to be mindful of that when we
set policies in the city of Dallas.
April Towery: This is fascinating.
thank you so much for being here.
That is it for this
episode of Dallas Dirt.
We will be back next week with more.
Thank you, Scott Beck.
Thanks for having me.