The delay postpones the opening of Wade Park's tenants, some of which have been announced for a few years. Several of the 23 announced tenants, including Hotel ZaZa, are no longer committed to Wade Park. Blo Blow Dry Bar, The Lash Lounge and Bread Zeppelin have also pulled out of the project, representatives from the businesses said. Representatives from The Rustic and Torchy's Tacos would not confirm whether the restaurants are still committed.
Frisco residents have been waiting since 2014 for the highly anticipated Whole Foods Market, which was first projected to open in 2015. The health-conscious supermarket chain is still committed to the project, but its opening date has moved to 2019, said Stan Thomas, CEO of Thomas Land & Development, Wade Park’s developer.
City officials first approved Wade Park's incentive agreement in 2015 with an expected opening date in late 2017. The city amended the agreement in January with a new deadline of late 2018. Under the amended agreement, the developers would receive up to $40 million from the city and $7 million from the Frisco Economic Development Corp. and Frisco Community Development Corp. if certain elements of the development were delivered.
Thomas said some retail strips will open in 2018, with a grand opening scheduled for spring 2019. His company is trying to secure a loan to keep construction moving, he said.
“Construction is still going, but it’s not the way we want it to or need it to be,” he said.
Thomas said new tenants have signed leases for Wade Park in the past two months, and he expects to have new tenant announcements soon.
Wade Park’s delay
Wade Park started construction before the city ever branded the $5 Billion Mile.
Since announcing that Whole Foods would anchor the development and breaking ground in 2014, Wade Park announced a slew of tenants committed to the project. These tenants included boutique hotels, high-end restaurants and top-of-the-line retailers. Destination entertainment venues iPic Theaters and Pinstripes Bowling also joined the lineup. Anthropologie and Free People were the last tenants announced in June 2016.
In January this year, the developers asked the city to extend the deadline of the incentive agreement.
Also in January, Thomas Land & Development secured a loan for $82.75 million to continue construction on the development. The loan helped pay for the installation of utilities and infrastructure, according to Gamma Real Estate, the New York-based company that provided the loan.
A second loan that Thomas Land & Development is securing will help construction move faster, Thomas said. He said it has taken some time to find a lender for the amount of money Thomas Land & Development is asking. As of press time, he could not say how much the loan is for.
“It is a massive loan,” Thomas said. “When you close that kind of loan, there’s only two or three people in the world that can close that loan.”
With the extra money Thomas said he is putting into Wade Park, the first phase of the development is estimated to be worth $700 million. At build-out, the development is expected to value at $4 billion.
When it comes to how long a private development takes to be completed, the city does not have a lot of control.
Frisco Development Services Director John Lettelleir said the city often does not put a strict timetable on construction projects unless the delay in construction becomes a public safety issue, such as unstable structures or holes left in roadways that motorists currently access.
“I get nervous about having a timeline because there’s so many variables that could happen, just like the recession that occurred and a lot of homebuilders ceased operations,” he said. “What our building inspections division did is when they heard that was going to happen, they worked with those homebuilders to secure the property so they don’t become nuisances, but it happens. You may have a recession or some other reason that slows it down.”
The city’s incentive agreement with Thomas Land & Development does not require Wade Park to be finished by a certain date. It requires that aspects of the project, such as a certain square footage of commercial and office space, be delivered by the Dec. 31, 2018, deadline in order for the project to be eligible for tax grants.
Because this is a performance-based agreement, Frisco Assistant City Manager Ron Patterson said the city does not owe Thomas Land & Development any funds unless the project is completed by the deadline.
Patterson said the city determines the appropriate deadlines for incentive agreements based on the nature of the project, but longer timelines are often given to projects on a larger scale, such as Wade Park.
It is not uncommon for the city to agree to extend the deadline of an incentive agreement, but Patterson said he could not say whether Frisco would consider extending the deadline again for Wade Park.
“We would have to see the particulars of the request, and that’s whether it’s Wade Park or any other project,” he said.
A tenant’s rights
Whether a committed tenant could pull out of a delayed project depends on conditions of the lease agreement, said Dallas attorney Kendall Laughlin, who specializes in lease agreements.
If the leased space is not delivered by the promised date, a lease could be terminated, Laughlin said, but it depends on whether the reason for the delay is considered reasonable, he said.
“There is no reasonable standard,” Laughlin said. “The only thing the parties can do is agree or go to court and let a judge decide.”
Often, delays outside of the landlord’s control, such as waiting for a city permit, could be considered reasonable, Laughlin said. Delays within the landlord’s control, such as having to secure financing for a project, could be considered unreasonable, he said.
“Often times in commercial leases, there will be a clause, particularly if it’s a raw land buildup, that the lease delivery is dependent on the landlord’s receipt of financing to build the building,” Laughlin said.
The four tenants that puled out of Wade Park did not say why they were no longer committed to the project. Several other tenants could not be reached by press time to confirm whether they were still committed to Wade Park.
Nicole Luna contributed to this story.