Vandergriff Town Center was seen as vital to the redevelopment of downtown Arlington.
In 2006, developers borrowed $3.9 million and built a two-story, 30,000-square-foot brick office building with a 70-foot clock tower just east of the historic Vandergriff Chevrolet dealership building on Division Street. The ground floor offered space for shops and restaurants as the city worked to draw commerce to the fledgling business district, not far from the gleaming Cowboys Stadium.But now the property has been posted for foreclosure, yet another victim of the sagging economy. Its major tenant downsized and moved out, and it's been difficult to find another, the developer said.The building is only 27 percent leased and headed back to the lender, said Ralph Shelton, who developed the project with Dalmac."They're prepared to let it go," Shelton said of his partners. "It's not worth what we owe against it. We thought we were doing what would make sense."What makes sense in commercial real estate has changed dramatically in Tarrant County over the past five years as the recession wiped out demand for many projects and left many developers sitting on empty land and big loans.Many announced projects never made it off the ground. In some cases, property was posted for foreclosure either before the project started or after it was built.Other projects are still in the works but taking much longer to develop than anticipated. Developers have been forced to shift gears to adjust to new demands in the marketplace.Several buildings along a two-block stretch of Race Street off Belknap Street near the Oakhurst neighborhood in Fort Worth were once pegged for renovations, renewal and the creation of a quasi-restaurant row. Lenders have foreclosed on the property, most of which is vacant.The investment and development company of Fort Worth investor Ed Bass planned to turn 279 acres near Texas Motor Speedway into a $300 million center of shops, offices and homes. Behind-the-scenes infrastructure work has been done, but the project is still inching along with no construction start date set.On University Drive just south of Interstate 30, a Fort Worth-based real estate developer suddenly stopped construction on a parking garage for a planned shopping, hotel and office project. The garage has been completed, but other parts of the development won't be completed until space has been leased.Yet another developer planned a huge office, residential and shopping complex around LaGrave Field on the near north side. That never happened, and the land was eventually sold to pay the bank.The Great Recession didn't discriminate. Small and large developers alike were caught in the same vise -- able to get loans when credit was plentiful before the downturn but then stuck with high debt loads when consumers stopped spending, companies stopped expanding and demand for space dried up."A lot of projects around the country slowed down or stopped," said Tommy Miller, president of Fort Worth-based Trademark, a real estate development company. "Many of those projects should have been stopped earlier."The Rockford, Ill.-based developer of Glade Parks, a retail and residential project on Texas 121 near Glade Road in Euless, recently filed for bankruptcy protection rather than lose the 193-acre property to foreclosure.Miller, of Trademark, which is developing the successful Alliance Town Center in far north Fort Worth, is also behind the WestBend development on University Drive near the Cultural District.In what was considered a gutsy move, Trademark pulled the plug on the project three-quarters of the way through construction of the parking garage, a key component for the shops, restaurants and hotel that were to come later.Construction of the seven-story, 798-space garage stopped in January 2009, with the developer citing the economic downturn and lack of retail growth nationwide. Trademark just recently completed the garage, deciding to finish it regardless of whether anything else is built, Miller said. Trademark is being cautious about adding more, although a small building it put on the site is doing well, leased to Smashburger and Zoes Kitchen."The economy looked so rough," Miller said. "We waited for the economy to feel better. It's still a difficult environment with the retailers. They've crawled out of their shell and are looking around. I would not describe it as any crazy euphoria."It's just not a landlord market."Most of the other space will need to be leased before Trademark moves forward with the remaining plans.Retail occupancy across Dallas-Fort Worth was flat in 2011, with retailers occupying 87.4 percent of the 183.5 million square feet on the market, according to The Weitzman Group in Dallas. In 2010, the figure was 87.3 percent.At Fort Worth-area shopping centers, retailers occupied 87.6 percent of the 54.3 million square feet, also up 0.1 percentage point from a year ago, figures show.Leasing of office space has also remained flat, despite strong employment growth in the area. Little speculative construction took place in 2011.Job growth in Dallas-Fort Worth has real estate brokerage firms feeling more optimistic about increases in occupancy and rents in 2012.That's what Fort Worth-based Fine Line Diversified Development Co., run by Bass, is counting on for its Champions Circle project near Texas Motor Speedway. In all, the project is planned to have 3 million square feet."Finally, there's some traction," said Bill Boecker, Fine Line's president and CEO. "I'm feeling pretty optimistic."Fine Line began marketing the project three years ago during the slack economy. Today, three anchor retail tenants are interested in the site, Boecker said.Fort Worth architect Ken Schaumburg planned and completed a few projects in and around downtown during the recession but lost some to foreclosure. The projects were all luxury, high-dollar condos, a market that "went totally away," he said.Now the market favors apartments, and Schaumburg has returned to the plate. A few years ago, he was involved in buying about 14 acres at the southwest corner of Interstate 35W and Northside Drive along the Trinity River, where he planned a mixed-use development. Schaumburg sold the property and made a couple of million dollars, but the new owners lost it to foreclosure.Schaumburg and his partners have it under contract with the lender to buy back the land and plan to build a 500-unit apartment complex."In times like this the market changes," Schaumburg said. "You do the deals today that make money."In Southlake, Hines Interests, a large Houston-based developer, announced a 285-acre commercial and residential development along Texas 114 and Carroll Avenue. To date, Cook Children's Health Care System has built a facility on 10 acres, which has served as a catalyst for the project, said Jeff Kennemer, a senior project manager with Hines in Dallas.Ninety-four home lots are also ready, and developers are talking with home builders, he said. Hines is also negotiating with a development partner for the retail space."We're working very diligently on the retail piece and chasing some office prospects," Kennemer said."Retailers are beginning to have discussions again. Their attitude is beginning to change."Sandra Baker, 817-390-7727Twitter: @SandraBakerFWST