Just a few months after narrowly dodging foreclosure, The Drever is back on track, with new financing and a commitment from the developer to open the hotel and luxury apartments in the first half of 2019.
The building will have luxurious amenities for both the residents and hotel guests as well as restaurants and retail shops. The highlight will be the 9th floor amenity deck, a 75,000-square-foot oasis with a restaurant, spa, fitness center, resort quality infinity pool, dog park and residential lounge.
The historic marble, originally from Marathon, Greece, is being painstakingly restored outside and inside the building.
Topping out at 52 stories and 1.5 million square feet, remodeling the 53-year-old building has been a massive challenge.
“It’s a big project that nobody had been able to do for a long time,” said Jerry Tonn director of asset management for The Drever. “These deals are extremely rewarding and a lot of fun but they are difficult to put together. They’re commitment to doing this, it takes a lot of effort to pull of these things together.”
The Drever closed on a $66.7 million bridge loan on Nov. 21 and also qualified for $95 million in federal and state historic tax credits. The loan is from Starwood Property Trust.
“We’re eager to move forward with the remainder of the project’s permanent financing,” Tonn said in a statement.
About 400 workers are on-site daily, with the majority working on the interior finish out of the building.
The unpredictable nature of the construction has made financing difficult and expensive, said Dallas City Councilman Philip Kingston, whose district includes downtown.
“It’s very, very hard to assess all of the costs that you’re going to incur once you get into an old building and try to renew it,” Kingston said. “It’s like an old house, you’re always going to be surprised. A lot of these lenders and capital sources are much more used to new build projects that deliver on a predictable time frame.”
He’s hopeful that the project will be able to finish on schedule now with new capital in hand.
“We’re aligned in our hope for a quick and successful delivery,” Kingston said.
The city of Dallas will be on the hook for $50 million in tax increment finance dollars after the project opens and it reaches certain milestones.
If the project fails to meet those guidelines, the city won’t have to pay the money. But Kingston said the cost of having a building that size vacant will be even greater.
The TIF financing is a big reason why The Drever project is happening but the city may have to revisit this issue before the next major remodel project asks for that financing method.
“It has exposed the limitations of using TIF financing for historic redevelopment,” Kingston said.
The Drever will be on the National Register of Historic Places because of its architectural significance.The building’s black and white facade designed by architects George Dahl and Thomas Stanley was meant to look like a banker’s pinstriped suit, a callback to when it was First National Bank in the 1960s.
It’s been vacant for more than seven years. At one point, downtown Dallas had 40 vacant buildings.
“We suffered a great amount of suburban flight in the ‘70s and ‘80s,” said Kourtny Garrett, senior vice president of marketing for Downtown Dallas Inc. “That decision to bring vibrancy back started with the implementation of the TIF district. In 1996 we had only 200 people living in downtown and now we’re up to 11,000 in the core. We’ve seen a complete shift in downtown.”
Dallas has been exploring what to do with its oldest skyscrapers since the 1990s when many of the buildings were thought to be obsolete because they lacked modern amenities and didn’t have enough parking, Kingston said.
“Dallas has had both the highest number of office project starts as well as vacancies,” Kingston said. “The Drever when it comes online will be the last vacant building.”
The opening of The Statler last year represented another significant milestone in downtown redevelopment as the 1950s era hotel now has a mix of hotel rooms and apartments. Also near downtown, workers are finishing up the restoration of the old Dallas High School building in an office campus and retail center.
Garrett also pointed to AT&T’s decision to remodel and expand its headquarters downtown rather than move to a suburb. And Goldman Sachs will be moving its offices downtown soon, she said.
“There’s really no one thing you can point to but when all those things come together, that’s where you see progress,” Garrett said.
“It’s a city block in the middle of one of the largest cities in the country," said Steve McCoy, president of Drever Construction. “It’s a very special project and I will probably never work on another one like this in my career," he said.