Dallas greenlights sale of embattled downtown building flagged for squatting, vandalism

Dallas City Council greenlit the sale of the old Family Gateway building at 711 South St. Paul Street on Wednesday after the building was flagged for squatting and vandalism. The property could sell for at least $2 million, the majority of which is reserved for capital improvements.
The vote passed 12-2.
Council members debated whether the city should demolish the building before the auction. Discussion oscillated between the city staff’s recommendation of putting the building on the market as-is and council member Jesse Moreno’s measure to demolish the building before it is sold, since the land value is likely more desirable.
Moreno, who represents the area, said the city needs to determine the best use of the property. Steps away from City Hall, it is situated in an area immersed in plans for a high-rise building with office and retail space, as well as several entertainment locales close to the Kay Bailey Hutchison Convention Center.
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For years, Dallas-based Hoque Global has had plans to create an almost 20-acre district between Canton and Cadiz streets. In 2022, council members approved a $96 million tax incentive to that cause.
“This is a building that has become a magnet for activities that are not desirable in any neighborhood,” Moreno said in the meeting.
Others, like council member Jaynie Schultz, were concerned a potential buyer may want to pay more to acquire the building along with the land.
Assistant City Manager Donzel Gipson told the council staff cannot estimate how the demolition will affect the property’s value, at least before it’s put on the market. The demolition alone could cost the city $250,000 or more. City staff said marketing for the property could begin as early as next month, with an expected sale period in October.
Council member Paul Ridley introduced a move to auction the property in two tiers. Every buyer could offer two bids — dollars they would pay with the building and what they would pay for just the land.
“That way, we could tell who’s really interested in the building,” Ridley said. “If there is no interest in the building, we’d have the highest bid for just the property, and then we would have a clear direction to demolish the building as a condition of sale.”
The majority of the council approved of Ridley’s recommendation. Twelve chose to approve the sale. Moreno and council member Kathy Stewart voted against it.
Moreno told The Dallas Morning News he was disappointed in the “city’s failure to leverage prime property in the center of downtown.”
“This property in my district has become a nuisance property owned by the city and would have likely been demolished had it been a private property facing similar circumstances,” the council member said. He added the building did not adhere to modern parking standards, as the current design provides no parking space. “I am deeply concerned how this property’s inadequacies will contribute to the experience of visiting downtown Dallas,” he said.
The move to sell the property comes amid growing calls to sell surplus assets to shave off the burden of paying off a $4 billion pension shortfall. The city’s real estate portfolio has more than 5,000 properties.
City officials were under fire after inspections in May showed the downtown property was unsecured, vulnerable to trespassing and littered with scat and broken furniture.
Moreno, also the chair of the homelessness and housing committee, issued a memo in May expressing concern the city had not maintained its facilities with “the same high standard we hold for our residents and business owners when it comes to proper maintenance of a building.”
The site was cleaned, and interim City Manager Kim Tolbert said officials had begun physical checks and collaborating with providers downtown who work with the area’s unsheltered populace. Moreno said he found fresh graffiti on the building as recent as Tuesday morning.