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A commercial real estate investment firm founded in 1984 by William L. Hutchinson
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Dunhill & Dallas Morning News

New towers on the way in Dallas’ booming Design District

Three new towers in the works will change the skyline of Dallas’ Design District.

But the ambitious development plans won’t come at the expense of long-time design firm tenants that give the neighborhood its name, the builders promise.

“The heart and soul of the district are the design firms and we don’t want to lose them,” said Bill Hutchinson, CEO of Dunhill Partners, which heads the investment group that in 2014 bought the lion’s share of the Design District.

Since then Hutchinson and his partners have worked on plans for new developments in the area northwest of downtown Dallas while marketing existing buildings to design showroom and creative firms.

This year Dunhill and its team will break ground on the first of the high-rises planned just east of Stemmons Freeway.

The hotel, apartment and office buildings will be a big change for a neighborhood that for decades was dominated by single-story buildings constructed in the 1950s and 1960s.

“You won’t recognize this area in five to 10 years,” Hutchinson said.

The Design District has already gone through a transformation, with construction of a handful of major apartment communities and the addition of new restaurants and retail.

Currently the largest apartment building in the neighborhood is the 24-story 1400 Hi Line building on Stemmons Freeway.

The 3-year-old luxury high-rise just sold for almost $100 million to Chicago investor Amli Residential.

Kelly Hardage, who heads one of the Design District’s biggest and oldest show room firms — Culp Associates — said that with all the changes he’s even more committed to the district.

“We started down here in 1972,” Hardage said. “I believe in what they are doing and want to be a part of it.”

Culp Associates just renewed its more than 30,000-square-foot lease with Dunhill in the Design Center building on Stemmons Freeway. The firm moved into that location in 1994.

“They are the largest tenant in that building,” said broker John Amend, who represented Culp. “We looked at a lot of locations but Dunhill wanted to keep them.”

Hardage said he originally had concerns when Dunhill and its joint venture partners bought more than 30 acres — the largest share of the Design District.

“You never know what’s going to happen with new owners.”

Dunhill and its partners, including Crosland Group, have spent the last year negotiating with tenants in the district and planning for the next wave of construction.

“With land prices what they are, a lot of people would have torn all these old buildings down,” Hutchinson said. “The big showrooms have renewed their leases and have expanded.

“In our first year of ownership, we have increased our operating income by more than $1 million.”

Hutchinson said the towers he is developing will be on empty sites or where there are vacant buildings.

The first high-rise will kick off later this year at Hi Line Drive and Turtle Creek.

With more than 20 stories, the building will include a 210-room Virgin Hotel and 150 apartments.

“We had to push back the start date — originally planned for this spring — when we switched from condos to apartments,” Hutchinson said. “Condos have been slow and apartments are hot.”

About three blocks away on Stemmons Freeway near Oak Lawn Avenue, Dunhill has designed a second tower that will house a hotel and more apartments.

San Francisco-based Joie de Vivre Hospitality will operate the 125-room boutique hotel.

And developer Crosland Group will build a 230-unit Illume apartment community on the upper floors.

“We had Dallas’ 5G Studio Collaborative design all of our buildings,” Hutchinson said. “But we told them they had to look different.”

Construction on the Joie de Vivre Hotel will start late this year or in early 2017.

A third tower at Stemmons and Edison Street will house an office building.

“We are waiting for anchor tenants before we start that one,” Hutchinson said.

The investors recently purchased a more than 100,000-square-foot commercial building on nearby Dragon Street, which takes their Design District holdings to almost 40 acres.

“We didn’t have a presence on Dragon Street and it’s appealing to some tenants,” he said.

Dunhill and its partners say they have turned down some companies that wanted to rent buildings or build in the district.

“We’ve had big box retailers interested but that’s not the direction we want to go,” said Andy Crosland, executive vice president with Dunhill Partners. “We are very careful how we market this district.”

By STEVE BROWN