Business

Alliance looks ahead 25 years after opening of airport

On a cold December day nearly 25 years ago, an American Airlines jumbo jet dipped its wings above hundreds gathered near Fort Worth’s new Alliance Airport runway.

About 150 people were on the plane, and Ross Perot Jr., Alliance’s developer, was in the cockpit. When it landed, Mayor Bob Bolen accepted the airport’s operating certificate from the Federal Aviation Administration in a ceremonial opening. It would be another couple of months before the airport was fully operational.

Fort Worth had plowed into new territory when leaders agreed to back a city-owned airport in far north Fort Worth, on land donated by the Perot family and at the behest of the FAA. Alliance would become the nation’s first industrial airport, expected to alleviate pressure on Dallas/Fort Worth Airport for cargo traffic.

With it, Fort Worth would become an aviation capital and the envy of the nation, Bolen predicted back then.

But the opening of Alliance Airport would spur much more. Homes with more than 150,000 residents fill the once-empty farmland, huge distribution centers ship goods around the world, and the area serves as the pinnacle of logistics hubs to developers.

In terms of growth, AllianceTexas experienced one of its best years in 2013.

Although it now encompasses much more than just the airport, with retail and office development from Interstate 35 west to the former Circle T Ranch, the project’s success circles back to the airport. And Perot says its best days are still to come.

“I can’t comprehend another time we’ll build another airport in the North Texas marketplace, so this airport is going to have more and more pressure on it,” Perot said. “We’ve got to make sure we don’t become complacent. We can’t forget how hard it was 25 years ago.

“The Cold War was ending. Defense spending was cutting back. We had the savings-and-loan crisis. And oil and gas prices were down. Tarrant County really was on its back. This is now one of the faster-growing regions in the United States.”

Responding to the market

Perot recalls the excitement, energy and spirit of the community the day the airport opened, but he is quick to credit the foresight of Bolen, who died in January.

“He’s the one that saw the benefit of bringing Alliance into the Fort Worth area,” Perot said. “He’s the one who saw the vision of being able to build an industrial complex around an airport. If you didn’t have Mayor Bolen, you’d have some development out here, but it wouldn’t be near the richness we have today.”

After the project cleared federal hurdles, construction began in July 1988 and the airport opened on Dec. 14, 1989. At the groundbreaking, former House Speaker Jim Wright said, “I predict we will see this prairie blossom with jobs and economic development.”

No one had any idea just how much that would ring true over the next couple of decades. Not everything that Perot’s Hillwood Properties planned for Alliance happened, and some things that it never dreamed of happening did.

So while a major aerospace plant and an Intel chip plant never materialized, the project attracted a major rail facility and developed a retail center.

“Whatever the market needs, we try to respond,” Perot said. “We didn’t see NASCAR coming. We didn’t see this boom in data centers coming. We certainly never envisioned a great complex like Deloitte University,” he said, referring to a $300 million training center in the Circle T Ranch portion of the development.

Since 1990, AllianceTexas has surpassed $50.6 billion in economic impact on North Texas. More than 37,000 jobs have been created there, more than 9,000 homes have been built, and dozens of top companies have operations there. In all, 370 companies are located at Alliance, and more than 37 million square feet of space has been developed or is under development.

In 25 years, it has generated $1.3 billion in property taxes alone, and Alliance is only about 50 percent developed.

Inland port growth

Alliance Airport is just west of Interstate 35W, generally between Westport Parkway on the south and Eagle Parkway on the north.

It is part of the sprawling AllianceTexas, which now spans 65 square miles on both sides of I-35W in Tarrant and Denton counties. About 80 percent of AllianceTexas is in Fort Worth, but it also takes in Haslet, Roanoke and Westlake.

Land for the 18,000-acre development was carefully assembled by Perot beginning in the 1980s when prices were cheap and Perot saw the growth potential of the northwest quadrant of Tarrant County.

Today, as the development celebrates its 25th anniversary, an expansion of the airport’s runways to 11,000 feet — one from 8,200 feet and the other from 9,600 feet — is on track to be completed in 2017. The longer runways will allow for larger aircraft and nonstop flights to Europe and Asia, opening up even greater logistics flexibility for companies in Alliance.

“The growth of the area is just moving at an incredible pace,” said Mike Berry, Hillwood’s president. “I don’t think most of us realized just how much velocity there would be. It took forever to get healthcare covered out here, and now we have the major players here.”

And just in time. Texas Health Harris Methodist Hospital Alliance, open only three years, passed a milestone in September when 112 babies were delivered there, several more than projected at this point in its business plan, spokeswoman Megan Brooks said.

Alliance, though, is best known in industrial and logistics circles for creating the so-called inland port — where air, rail and highway are brought together to provide a seamless distribution of goods. More than 600,000 shipping containers go through BNSF Railway’s intermodal yard annually, a figure that today surprises Perot.

“The aviation business is what we wanted,” Perot said. “We grew into the industrial business. We didn’t realize it was going to be as big as it was and currently is.”

After announcing the airport project, Perot said, the developers all waited for a big aviation deal. Instead, Santa Fe Railway came to them about putting in an auto distribution yard.

The railroad would later develop an intermodal yard, where trailers arrive by rail and are transferred to trucks for regional deliveries. The railroad, which merged with Burlington Northern Railroad in 1995 to form BNSF, today has 396 acres at Alliance.

BNSF’s auto distribution center has processed more than 2.3 million vehicles at Alliance, the railroad said.

Vann Cunningham, BNSF’s assistant vice president of economic development, said the intermodal yard is far from meeting capacity. It serves businesses within 250 miles of Alliance, but that could easily expand to 500 miles, he said.

“The capacity as it sits today can go to about 1.6 million containers. By changing the crane system, it can go to 2 million. It will happen,” Cunningham said.

As the fourth-largest facility in BNSF’s network, the intermodal yard is “very significant” to the railroad’s growth, Cunningham said.

“Without a doubt, AllianceTexas is the largest and most successful inland port and logistics center in North America,” he said. “It is without doubt a world-class facility.”

Berry said: “The industrial airport was unique because it was never done before. That really got people’s attention. But it really didn’t take hold until the intermodal hub was put together with BNSF.”

New wildflower park

After the airport opened, it took about six years to build Alliance’s infrastructure, Berry said. That included the opening of Texas 170, a link to DFW Airport, and the completion of the intermodal hub. Few deals for industrial buildings were made during those early years, but they would eventually drive development, he said.

LG Electronics is one of the original companies to locate its distribution in far north Fort Worth. It has grown from a couple of hundred thousand square feet of leased space to 1 million square feet. LG distributes millions of appliances and electronics from Alliance, said John Taylor, a vice president in the corporate office.

“It’s the perfect location for national distribution,” Taylor said. “I do know from speaking with our experts there, Alliance has been a great partner.”

Building at Alliance began in 1993 and was steady until 2008, when the recession set in and warehouse and distribution center building came to a halt. Then retail development took off with Alliance Town Center, a 900-acre master-planned project at I-35W and North Tarrant Parkway.

Initially, retail did not figure prominently in plans for Alliance, but Hillwood formed a joint venture with Fort Worth’s Trademark Property Group to take the lead on Alliance Town Center and looked at what it could do when the industrial sector slacked off. In addition to shops and restaurants, offices, hotels and residential units are becoming part of the town center concept.

Included is the new 14-acre Lady Bird Johnson Park, which will quickly become the focal point of the center. Experts from the Lady Bird Johnson Wildflower Center in Austin were brought in to consult. The park involves a prairie grass restoration project.

“Basically, we had them work with us to design this park,” Berry said. “It’s all about trying to be focused on native grasslands and being environmentally sensitive.”

Disney World Alliance?

Some projects went as planned, but others came as a surprise.

Perot said no one dreamed Alliance would have a NASCAR track. Texas Motor Speedway, at I-35W and Texas 114, opened in 1997 and nearly took Alliance in a whole different direction.

Building on the racetrack’s success, Berry and his team tried to chase big entertainment venues. That’s how it got Cabela’s, the world’s largest retailer of hunting, fishing, camping and outdoor merchandise, to put its first Texas store in north Fort Worth, he said.

“We thought, ‘If you’ve got a NASCAR track, are there ways we can go out and get a Busch Gardens or Disney World?’ We spent a lot of time on it,” Berry said. “We talked to all of those groups.”

Hillwood also talked to the horse-racing industry about a track at Alliance, and it had a scintilla of hope that Dallas Cowboys owner Jerry Jones would pick Alliance for his $1 billion football stadium. The stadium would eventually be built in Arlington.

“We tried to get him to consider the Alliance Center North site,” Berry said. “That was when he was really beginning to think about what this stadium needed to be and how unique it needed to be. It was heavily skewed to the east side. We were viewed as a little more remote.”

The last couple of big industrial projects have been 1-million-square-foot e-commerce fulfillment centers for Amazon and Wal-Mart.

‘Envy of the nation’

Since 2012, with the economy improving, Alliance has been in one of its most accelerated development phases.

Last year was one of its best, with the creation of more than 5,000 jobs as building projects were launched in all real estate asset classes, including industrial, office, residential and retail. That hadn’t happened since 2007.

“Fort Worth may not be the single envy of the nation, but I would tell you based upon the way the real estate world views Fort Worth, it and North Texas … we’re now in the top three to five in a conversation about where you would invest,” Berry said.

If Perot has one regret about Alliance, he said, it would be that his group didn’t buy enough land.

“We had a lot of great land acquisitions that we didn’t do in the ’90s because I said we’ve got so much I’m not sure we’ll be able to use what we have. But we really should have bought a lot more land. We could have bought another 8,000-9,000 acres. We could have filled it up.”

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