The merchant builder of market-rate apartments and student housing was created out of the economic downturn in late 1989 with an investment from Texas oilman Ray Hunt. The company also struggled through the market dip after September 11, 2001.
In response to today’s tanking economy, JPI has adopted a slimmed down strategy, reducing development staff by around 10 percent. The company also has downsized its construction division, turning its attention to the property operations side of the business. “We felt it prudent to focus most of our business around our existing asset management, construction and property management businesses. Today, we have a $2.5 billion portfolio of assets and a very successful property management business. Our regional and services teams continue to oversee the financial, operating and construction activities associated with all of these assets,” said Cory Ingram, JPI development associate in the Central Market. JPI manages more than 45,000 conventional and student living apartment homes in 20 states and 27 major metropolitan areas — 35 of which are company-owned and another 140 managed for third-party clients.
“With this substantial business foundation, we are dedicated to successfully navigating the company through these volatile times, as the industry and capital markets reinvent themselves. We expect to see a more stabilized environment sometime in 2009, at which time we will expand our focus on new opportunities that then exist in the market,” said Ingram. The company has the debt and equity in place to continue a number of projects already under construction.
A couple of months ago, JPI began delivering units at its 146-unit West End Station, a five-story mix of apartments and retail, located directly across from the company’s four-year-old, 204-unit Jefferson at 1001 Ross, a mid-rise mix of rental units and ground-floor retail.
In July, JPI broke ground on its first project in downtown Dallas’ burgeoning Arts District, on the site of a former comedy club and parking lot, and expects to begin leasing units at the 228-unit Jefferson at the Arts District in 2010.
The company owns another parcel right outside the Arts District where a 242-unit second phase may be built when the development climate is more favorable. The community, designed by Atlanta-based The Preston Partnership, is a six-story podium project with two parking levels, one on grade and the other subterranean.
“What we have done is postpone new development until the capital markets return,” said Ingram.
When liquidity returns to the capital markets, JPI is well positioned to build again in a big way. In JPI’s pipeline is a $2 billion development deal consisting of two mixed-use projects on the outskirts of downtown Dallas that could include a total of around 5,500 apartment units, office space, retail and a hotel component at build- out.
Those sites are located along Industrial Blvd. (which will be renamed Riverfront Blvd. on November 10, 2009) next to the Trinity River Corridor Project that encompasses 20 miles of Trinity River and approximately 10,000 acres, making it the biggest public project the city of Dallas has ever undertaken and one that is expected to redefine the Big D by revitalizing neighborhoods on the city’s blighted south side.
The Trinity River separates the northern and southern parts of the city. The Corridor creates enormous development opportunities within Dallas, but large swaths of it lie within the Trinity River floodplain. It also is home to some of the city’s most impoverished residents, many of whom are African American, a grim reminder of the segregation laws that once banished Black Americans to the worst neighborhoods in most of our nation’s cities.
Redeveloping the Corridor area, a mish mash of industrial businesses, liqueur stores, and bail bond establishments, carved up by freeways, has been the dream of Dallas’ city fathers for years. That dream moved into the realm of reality in 1998 with the passage of Proposition 11, which leveraged more than $1 billion in state, federal and other agency funds to completely revamp the river’s levees and improve corridor transportation, while protecting and preserving the Great Trinity Forest. After its passage, the city began to draft a master plan for the area.
JPI’s proposed projects are designed to fit in with the comprehensive land use plan for the area that, adopted in 2005, is a blueprint for an urban, pedestrian-friendly mixed-use village. In addition to increasing flood protection and improving traffic congestion in the downtown area, the plan includes creation of a vehicle parkway along the Downtown side of the river.
Also central to the city’s $1.2 billion project are the creation of two lakes, several parks, the Trinity River Audubon Center, which will be the flagship facility for the Audubon Society in the state of Texas, and three new “signature” bridges by renowned designer Santiago Calatrava that are expected to redirect Dallas’ development pattern.
“We started looking into where the available land was in 2005, especially the large parcels, and when you do that, you naturally migrate down to the Trinity River Corridor,” said Ingram.
JPI began to assemble land at two locations next to the center of the corridor project along the old Trinity riverbed. The company cobbled together a total of 101 acres — a 60-acre site on the south end of the Trinity River Corridor and another 40-acre site on the north end — by acquiring seven parcels from a variety of owners, closing on the final piece in January 2008.
“The idea was to book-end the Trinity River Corridor,” said Ingram.
With a build-out timeline of around seven years, he expected to be under construction on the south project in 2009, but the company pushed back start plans because of the lack of available capital and the reluctance of banks to gamble on new construction.
“You may not see dirt flying, but there is a lot of work still taking place,” said Ingram.
One hurdle recently cleared by JPI was the zoning change from industrial manufacturing to planned development district, which allows the uses that the developer plans to include in its projects.
“We plan a mixture of mid-rise apartments, and a couple of high-rise components, as well as some large retail footprints,” said Ingram.
Both the northern and southern sites have the potential for mass transit connection, which will be critical to connecting the area to Downtown and bringing people to the park and other public amenities.
“Currently there are no stations at our sites, but there are some in the area and there have been talks about a potential DART connection.
But most importantly, we’ve talked with the Trinity Lakes and Design team about connectivity to Hillwood’s Victory project less than a mile away. Whether that’s a rubber-wheeled trolley or a modern street car, there needs to be connectivity to Victory, to the West End, to the CBD and to the Design District,” Ingram said.
Designed by Dallas-based Good, Fulton and Farrell, the project itself is atypical for the merchant builder, which isn’t in the business of buying and banking land. But JPI has always been a development pioneer in Dallas, a market that is expected to be a pack leader on the road to national economic recovery.
“We were the first apartment developer to build in what is now the Victory area. We also developed in the Deep Ellum area with the highly successful 480-unit Jefferson at Gaston Yard and we built a couple of projects in Oak Cliff on the southern side of the Trinity River. So this project will be another pioneering page in our book,” said Ingram.
For now, the project is a step-by-step process that is keeping Ingram and others on JPI’s development staff quite busy. Here again, JPI is leading the way. “Other developers are weighing in on the Trinity River Corridor, but for now, only JPI has submitted any plans,” said Rebecca Dugger, director of the Trinity River Corridor project.
