Last year, when J.C. Penney partnered with three Dallas firms—The Karahan Cos., Columbus Realty Partners, and KDC—to develop 240 acres of prime real estate surrounding the retailer’s Plano headquarters, few expected the project to get so big, so fast. But in short order, one of the largest and most-admired companies in the world decided to relocate its North American headquarters from California to Legacy West. And things really started rocking from there.
Along with the corporate build-to-suits developed by KDC, Legacy West also will include multitenant space. Earlier this year, Dallas-based Gaedeke Group snapped up an 11-acre tract at the southeast corner of State Highway 121 and Legacy Drive for a 15-story, 308,000-square-foot office tower. Gaedeke Group expects to have the project completed before the end of 2016.
Anchoring Legacy West are headquarters for two of the most recognizable brands in the world—Toyota Motor North America and FedEx Office. KDC is developing both projects. FedEx Office, a subsidiary of Memphis-based FedEx, decided to consolidate its Dallas headquarters and another North Texas office into one larger facility in Plano. Designed by HKS Inc. with interiors by HOK, the four-story, 265,000-squarefoot building will eventually house about 1,200 FedEx Office employees.
Legacy West and KDC beat out a host of other developers vying for the project, says Toby Grove, the company’s president. “We had done four previous build-to-suit projects for various tenants over the years, which gave us a little credibility,” he says.
KDC broke ground on the FedEx campus last July, and Grove expects it will take about 22 months to complete. The campus is located on the east side of Headquarters Drive, immediately south of the Gaedeke site.
But that wasn’t the project’s original location. The company had signed on for a larger parcel on the west side of Headquarters Drive within Legacy West. It was persuaded to move to the smaller site to make room for one of the largest and most signifi cant corporate relocations North Texas has ever secured: Toyota.
The Japanese automaker began exploring options for a new North American headquarters last year, selecting Meredith O’Connor and Michael Sessa with JLL’s Chicago office to help lead the search. They pulled together a team from JLL’s Dallas office—Paul Whitman, Brad Selner, Brooke Armstrong, and Torrey Littlejohn—to evaluate North Texas opportunities. In the end, Legacy West proved to be the perfect fit.
“North Texas, and specifically Plano, have a lot of positive attributes that make it attractive to relocating corporations,” Selner says. “They include a pro-business climate and tax structure; a large, highly educated workforce; a relatively low cost of living with top-ranked K-12 schools; and a variety of housing options.”
As it often is in large searches like these, the Dallas Regional Chamber was the primary economic development point of contact. Mike Rosa, the chamber’s senior vice president of economic development, said winning the prized relocation has been a career highlight for him and his team. “It’s like winning the World Series, an Academy Award, or the green jacket,” he says.
Toyota’s selection of Dallas-Fort Worth will have a lasting impact on the market, Selner says. “Our local and state governments are doing great things to bring businesses to our area,” he says. “We’re all fortunate to be in Texas with a business-friendly environment.”
“IT’S LIKE WINNING THE WORLD SERIES, AN ACADEMY AWARD, OR THE GREEN JACKET.” - MIKE ROSA, DALLAS REGIONAL CHAMBER, ON TOYOTA’S SELECTION OF DFW FOR ITS NORTH AMERICA HEADQUARTERS
Upon completion, the $350 million Toyota campus will include more than 1 million square feet of office space in six or seven buildings, and house more than 4,000 employees. KDC broke ground on the project, which was designed by Dallas-based Corgan, in January. They’re using environmentally sensitive construction methods while building the campus, and are also incorporating sustainability principles into the buildings themselves. KDC expects the campus will take between 30 to 32 months to build.
Along with its 4,000 workers, Toyota will likely attract various automotive suppliers and vendors to the region. Economic developers anticipate a large-scale impact on both the city of Plano and the North Texas region as a whole. It has already kick-started development of Legacy West’s $300 million urban village, which will include retail, restaurants, and multifamily space.
Some industry observers are projecting a “four-fold ripple effect” spurred by secondary jobs from automotive suppliers wanting to be located around Toyota’s new campus, relocating employees’ need to buy new houses, and consumer spending driven by new supply and demand in the marketplace.
It also could help persuade more companies to relocate to North Texas, Selner says. “Without a doubt, there are other companies looking in the area, and largely because we have a company like Toyota—of that profile and magnitude,” he says. “It really validates this marketplace as a great place to do business.”
One company that got that message is Boston-based Liberty Mutual. In April, the company announced that it was joining the Legacy West party, too. The insurance giant is planning a large operations center that will employ as many as 5,000. It will be located at Headquarters Drive and the Dallas North Tollway, immediately north of Legacy West’s urban village.
TOYOTA MOTOR NORTH AMERICA
TENANT REPRESENTATIVE: JLL
ECONOMIC DEVELOPMENT: Dallas Regional Chamber, Plano Economic Development Corp.
ARCHITECT: HKS Inc.
INTERIOR DESIGN: HOK
GENERAL CONTRACTOR: Rogers O’Brien
STRUCTURAL ENGINEER: Kimley Horn
LEGACY WEST TOWER ONE
DEVELOPER: Gaedeke Group
ARCHITECT: Morrison Dilworth + Walls
GENERAL CONTRACTOR: Austin Commercial