Downtown Dallas Set For Major Change — If Slow Retail, Old Buildings And Tariffs Don't Get In The Way

Downtown Dallas is on the cusp of a major renaissance, thanks to a stream of significant projects, as the booming development in once-trendier areas like Uptown, Deep Ellum and the Design District bleeds back into the city center, creating a distinct mix of development for the area.

Major projects on the way include the $3.7B overhaul and expansion of the Kay Bailey Hutchison Convention Center and an $800M wellness-focused resort from Therme Group that is generating excitement despite some recent headlines questioning the firm's history.

The area faces headwinds from the lack of a strong retail environment, an existing stock of buildings in need of revitalization, and the prospect of tariffs, among others.

But some of its biggest backers are feeling new energy.

“Your downtown is phenomenal compared to virtually any of the major metros,” Therme Group U.S. Executive Chairman John Alschuler said during Bisnow's Future of Downtown and Uptown Dallas event Wednesday at The Statler Dallas.

“The level of growth, the level of investment, the amount of new energy coming into your downtown makes it one of the most … successful downtowns anywhere in America.”

The “explosive” nature of the market was a chief reason Therme Group purchased 24 acres adjacent to Downtown in the Cedars area of the city for its European-style wellness resort and water park, Alschuler said. At around 500K SF — or the size of an NFL stadium, as he described it — Therme Group’s resort is expected to bring in 2 million people per year.

“Our goal is to take health and well-being … and save it from becoming a luxury product,” Alschuler said. “Make it something that's accessible to the vast majority of the citizens of this great Metroplex.”

Yet the European company is in hot water of its own after The New York Times reported Wednesday that Therme Group exaggerated its track record in its dealings for a planned resort in Ontario. Rather than the half dozen spas it touted itself as operating in Europe, the company only has one facility in Romania, the NYT reported in a lengthy investigative piece. 

If the Therme Group facility in Dallas opens in 2030 as planned, resort visitors will be able to walk to the revamped convention center. 

The renovation and expansion project for the Kay Bailey Hutchison Convention Center broke ground last year with an end target of 2029. Work to upgrade the facility to serve as the International Broadcast Center for the 2026 FIFA World Cup is scheduled to start in July. That will be followed by a demolition of a portion of the center to clear the way for the facility's expansion.

Matthews Southwest serves as the city’s program manager for the project.

The city's master plan for the convention center project also entails enhancing transportation to connect Union Station and the rest of the city, adding trolley systems and creating a mixed-use district, Matthews Southwest Senior Vice President Phillip J.F. Geheb said. 

“The city's investment in this social infrastructure project with the convention center [is] really about changing the narrative about Dallas,” Geheb said. 

The expansion will allow the convention center to host nearly 80 more events per year than it can handle now. Geheb said the renovations will also allow Dallas to get conventions the city is losing to places like Chicago, Orlando and Las Vegas. 

“It's time to take that master plan, that significant investment, and really build off of that,” Geheb said. “That energy, that investment is going to spill around that district.”

Therme Group's investment in Cedars and the $1.8B in tax revenue the resort is projected to bring wouldn't happen without the convention center master plan, Alschuler said. 

“It just shows if you think big [and] you invest strategically, you get your money back many times over,” Alschuler said. “The growth of Dallas is going to happen faster and more decisively here than in any other metro in the United States.”

But headwinds are perpetual, and urban development always runs into challenges, Alschuler said. Depletion of the retail environment has been a challenge for downtown.

“We're an example of something the internet can't destroy,” Alschuler said of Therme Group’s planned wellness resort. “You can't experience a thermal bath digitally.”

For Downtown Dallas to succeed, HN Capital Partners Managing Partner Vipin Nambiar said it needs an ecosystem of various neighborhoods working together with different components of amenities as well as housing and work environments.

“If you focus on the actual broken-out components of our demographic growth that everybody talks about, most of that has been in the suburbs, and the city of Dallas hasn't really participated,” Vipin said.

“Our neighborhoods here that are outside of the downtown area I think can have the opportunity to provide for housing stock and the growth for the demographics to come to town and participate in this amenitized environment.”

The growth of neighborhoods like Cedars, the Design District and Deep Ellum is going to help elevate Downtown Dallas, Alschuler said. Goldman Sachs' 800K SF campus will bring job growth, which will be followed by residential development.

“Life on the street follows life in offices and life in residences, because now you have purchasing power,” Alschuler said. “It buys food, it buys booze, it buys entertainment.”

The stock of older buildings downtown has also been a challenge for the area, though Merriman Anderson Architects has led the charge on that front with adaptive reuse projects for nearly 30 buildings in the area.

“We really concentrated on [adaptive reuse projects] in downtown, because we believe in downtown,” Merriman Anderson Architects principal and Director of Design John Carruth said. “We believe that we have to bring these buildings back to life in order to create that fabric that we can start working from.”

Another big issue that could stand in the way of the plans for downtown is tariffs.

“The biggest thing that could derail us are things that nobody in this room can control: tariffs, fiscal policy, monetary policy, inflation and interest rates,” Geheb said.

But while it is easy to fixate on political and economic roadblocks, the convention center master plan and all the other developments happening around Dallas are going to be transformative, Carruth said.

“You have every reason to be confident about the future of downtown,” Alschuler said. “Keep the confidence, keep the public-private partnership going, [and] things will continue to evolve in a way that, 10 years from now, you'll be amazed at the success you've had.”