Article written by Candace Carlisle
Staff Writer - Dallas Business Journal
A Texas-based investment partnership has big plans for the 101-year-old building adjacent to Dallas’ City Hall.
Alterra 500 South Ervay LLC, a limited liability company of Alterra International, led by Turkish investor Mike Sarimsakci, plans to spend $55 million turning the Butler Brothers Building into a multi-use property that would include a 220-room hotel, 250 apartments, a school and about 80,000 square feet of office and retail space.
The development group is looking for partners for its extended-stay hotel flag, retail and restaurant space and school, said Sarimsakci, who has been described by Turkish media as the “Turkish Trump.”
“We want the building to be more than a residential building and a hotel. We want retail and restaurants to compliment the residential,” Sarimsakci said.
Sarimsakci is a partner for the Eastern Mediterranean investment group.
He has been previously affiliated with the $135 million development called 1401 Elm St. in downtown Dallas. The 52-story, 1.3 million-square-foot property was previously known as Elm Place.
Sarimsakci recently left Polidev International Inc., which owns and plans to redevelop 1401 Elm St. The abatement work on the tower is scheduled to begin in February.
The Butler Brothers and Elm Place projects are part of a flurry of redevelopment projects centered on downtown Dallas, including the redevelopment of the Mercantile Continental building, the Statler Hilton Hotel, the old Dallas Central Library and 1600 Pacific LTV Tower.
The reinvestment activity in downtown Dallas is busier now than it has been in the past few decades, said John Crawford, CEO of Downtown Dallas Inc.
“There’s more and more residential development coming to downtown Dallas, as more people move to downtown,” Crawford said. “People are living and working in downtown, and I think these kind of developments do very well.”
Each of the redevelopment projects in downtown Dallas will benefit one another, Sarimsakci said.
Sarimsakci and the group of investors are in the process of applying for roughly $8 million in historical tax credits and $6 million in new market tax credits.
The property, at 510,000 square feet and eight stories, was last appraised for $2.5 million, according to the Dallas Central Appraisal District.
Dallas-based Merriman Associates Architects is designing plans for the redevelopment project at 500 S. Ervay, which includes a 450-car attached parking garage.
The investment group plans to hire a general contractor in the next few months. Construction is scheduled to begin on the facade of the building, which will pull the stucco from the original brick in the fall.
A large footprint
The 101-year-old building has served as a warehouse, a merchandise showroom and office space over the years. It also has inspired other proposed developments.
In 2006, Bismo Development Co. announced it would redevelop the building into 321 residential units and retail space. But that never happened and the company abandoned its original conversion plans.
“It is probably one of the more unique buildings in downtown because of its floorplates,” Crawford said. “It’s in a good location, right across the street from city hall.”
When developer Larry Hamilton of Colorado-based Hamilton Properties Corp. first looked at the building for a possible joint venture with Bismo, he thought it had “real character and there was good potential.”
But deep 75,000-square-foot floorplates from its history as a warehouse building presented a challenge.
“The floorplates were built as big as a warehouse, so it had its challenges — but what rehab doesn’t,” said Hamilton said, who is one of the developers redeveloping the Lone Star Gas complex.
The building’s redesign includes internal atriums that will keep the building historic but make the floorplates more usable, said Jerry Merriman, president of Dallas-based Merriman Associates Architects.
“The atriums will bring in more light and make the floorplates a more usable depth,” Merriman said. “It is an efficient way to solve those big floorplates.”
The building has the largest floorplates that Merriman has worked on in downtown Dallas.
The redevelopment of 500 S. Ervay is an important piece of downtown Dallas, Merriman said.
“It’s a big link between what’s happening in the Farmers Market area and the core of downtown,” he said. “It completes the city hall plaza and brings more vibrancy to the area. It will be a cornerstone.”
Sarimsakci and other investors are looking at financially partnering with developer Leobardo Trevino on the Statler Hilton Hotel project, as well as looking at redevelopment possibilities in two other office towers in downtown Dallas.
But nothing has been finalized and the discussions are continuing, he said.
“We, like any other investor, is looking for a reasonable return on investment,” he said. “We are looking for that right now.”