Developer Jack Matthews buys 157 acres in Prosper

Jan 11, 2013

Dallas Business Journal - January 11, 2013 - by Candace Carlisle

A rolling prairie nestles up to the intersection of the Dallas North Tollway and U.S. 380 in Prosper - but not much else. Soon, that will change.

The lonely stretch of land could become the site of a regional retail destination, sparking surrounding development.

The catalyst: Developer Jack Matthews' recent acquisition of a large tract of land.

Matthews purchased 157 acres of land at the intersection in the Town of Prosper with plans to build a $1 billion regional mixed-use development. Terms of the land deal were undisclosed.

Plans for the public-private partnership include more than 3 million square feet of office, residential, retail, medical, hotel and entertainment space.

"The location is incredible," Matthews said. "We were surprised we could still purchase it. If you look at the history of Dallas, this is the next major natural intersection where a major east-west thoroughfare meets the Tollway. It's natural for development."

Matthews has been working with the Town of Prosper and the Prosper Economic Development Corp. for the past year and a half. The first parcel of the two-parcel land deal — 127 acres — closed on New Years Eve after the town agreed to the proposed development plans. The second parcel of land — 30 acres — is scheduled to close on January 11.

The buyer, Dallas-based Matthews Southwest, was self-represented in the purchase of the 127-acre tract of land from the St. Clair Family. Ray Utley of A. Ray Utley & Co. worked on the deal. John St. Clair of Henry S. Miller Brokerage represented the family.

David Davidson Sr. of Davidson Real Estate Inc. represented Matthews Southwest in the purchase of the 30-acre tract of land from Centurion American. Ken Reimer, David Davidson Jr. and Edward Bogel of Venture Commercial's recently formed land division represented Centurion.

The Town of Prosper agreed to a tax incentive agreement based on the performance of the project and the increase of property values, said Mayor Ray Smith.

"This is one of the key corridors of our community," Smith said. "Jack has done a lot of nice development and has the relationships to develop a quality project. We don't just want growth, we want quality growth."

The project is envisioned to resemble a mixed-use destination, much like the Legacy area or Addison Circle.

Matthews plans to break ground after securing tenants. Venture Commercial's Reimer, Davidson, Bogel and Katie Vance are marketing the project.

Development could begin in late spring, Matthews said.

Matthews Southwest will hire an architect and a general contractor, among other services. Addison-based JBI Partners is the engineering firm working the project, which includes more than $27 million in infrastructure improvements.

A second chance

When the St. Clair family purchased its land two decades ago, they knew the tract would become a major piece of Dallas' development history. So, the family held onto it.

"The Tollway is the economic engine that's driving the good quality development as the Metroplex moves north," said John St. Clair, a broker at Henry S. Miller Brokerage and the representative of the family partnership. "Combined with the east-west of U.S. 380, it's a very dynamic intersection in Prosper."

The St. Clair family sold the property in 2007 to a hedge fund affiliated with Highland Capital Management LP. However, the impact of the recession forced the selling partnership — which financed the hedge fund's buy — to foreclose on the property in 2010, reclaiming the land.

In 2010, St. Clair told the Dallas Business Journal, "We were very fortunate to sell it in 2007, and we were fortunate to get it back."

The family still owns 61 acres in the area and plans to develop the land to complement Matthews’ proposed project. "This was a great place to invest," St. Clair said. "There has been enormous appreciation in our investment. That's why we are keeping some land. We want to benefit from the development that occurs."

Retail sprawling north

From Neiman Marcus in downtown Dallas to Stonebriar Centre in Frisco, major shopping destinations have slowly progressed northward in the past century. That's likely to continue, real estate experts say.

Retail follows residential development, and single-family development has driven north to Frisco and Prosper.

"We have development going up to Celina," said David Davidson Jr., assistant vice president of the land division at Dallas-based Venture Commercial. "This is growing quicker than people think."

South of Matthews' claim, Cleveland-based Forest City is ready to launch its 320-acre mixed-use project at the southwest corner of the Dallas North Tollway and U.S. 380.

The City of Frisco partnered with Forest City on the public-private mixed-use project in November, much like the Town of Prosper and the Prosper Economic Development Corp. joined Matthews Southwest.

Forest City is scheduled to begin construction in late 2013. The development is on track and Forest City is in active discussions with possible tenants, said Brian Ratner, president of Forest City Texas.

"We are talking to a bunch of tenants for a power center or an open air mall or retail center with department stores," Ratner said. "This is a long-term project."

The result? There could be competition for restaurant and retail tenants.

Competition is something every project has, whether it's perceived or real, Ratner said.

Prosper Economic Development Director Robert Winningham says what's going on in the town reminds him of the City of Allen, his former stomping grounds. He was the economic development director for the Allen Economic Development Corp.

"This project enables us to put that product on the ground, such as midrise office buildings that will create brand new jobs in Prosper," Winningham said. "This is Allen 15 years ago. But the advantage for Prosper is that Allen only had one major feeder road and Prosper has three: the Tollway, Preston Road and U.S. 380."