City Council Approves Memorandum of Understanding with AMLI Residential/Stream Realty Partners for Addison Circle Transit-Oriented Development

With rail service slated to begin in 2024 on DART’s new Silver Line, the Town of Addison has initiated a significant mixed-use, transit-oriented development project, in the vicinity of the DART’s Addison Transit Center. To be built on land owned by both Addison and DART, the project represents a major opportunity to leverage the benefits of transit and a superior location to create a unique urban environment to attract jobs and corporations, restaurants and shops, and new residents.  

The project is the culmination of the Town’s years of preparation to expand the urban neighborhood and amenities of Addison Circle and Addison Circle Park through strategic acquisition of land around the DART station and planning efforts such as the Addison Circle Special Area Study, adopted in 2018.

The Vision 

The 2018 Addison Circle Special Area Study envisioned the creation of a distinctive and creative regional destination linking the DART rail station with Addison Circle Park and combining a mix of non-residential and residential uses and urban densities appropriate for the location and compatible with the surrounding uses. The special area study’s guiding principles are intended to result in enhanced support for the town’s tax base, economic development and tourism activities, and special events, and include:

• Seamless pedestrian connections from the rail station to Addison Circle Park, utilizing interconnected plazas, trails, and open space 
• Diversification of Addison’s residential and non-residential development opportunities 
• A positive economic impact on the Town
• Gateways to and connectivity with Addison Circle and Belt Line Road
• The use of open space, public art, and parks to create a distinctive place and character 

The Property

The Town and DART own approximately 18.5 acres of land bounded by Arapaho Road on the south, Addison Road on the west, Festival Way and Addison Circle Park on the north, and Quorum Drive/Spectrum Drive on the east.

The Town’s 13+/- of vacant land is intended to be coupled with DART’s 5.5 acres of land (currently home to the Addison Transit Center and a brick commercial building) to facilitate a large-scale master development that is controlled by the Town. The DART property will be leased to the Town for this development through a ground lease that will be executed between Addison and DART. In June 2021, the City Council approved an inter-local agreement with DART that stipulates the terms and conditions of the future ground lease. Additionally, the proximity of Addison Airport imposes height and noise restrictions that impact development on the western end of the property. 

Developer Selection Process 

In 2020, the Town engaged Cushman and Wakefield to serve as real estate advisors and brokers for the project. In October of that year, City Council also appointed Council Members Braun, Quintanilla, and Walden to a Selection Committee to guide the solicitation of qualified developers through a Request for Proposals (RFP) process. The Selection Committee used the vision and guiding principles of the Addison Circle Special Area Study to determine the very basic requirements for any project that would be built on the property.

The Selection Committee also worked to build a scoresheet, again based on the Addison Circle Special Area Study, to evaluate the responsiveness of each RFP submission to the Town’s goals and objectives for a successful project. The project is intended to be financially beneficial to the town but also create a successful and dynamic mixed-use development that sets a new standard for the region, and the evaluation factors address both the desired quantitative and qualitative aspects.

Financial evaluation factors included:

• Tax revenue generation (property, sales, and hotel/motel tax)
• Experience and financial capacity of the development team
• Financial transactions – the purchase price/ground lease value and non-refundable deposit for the Town’s properties
• Estimated city incentives for the project

With DART as a key partner, several evaluation factors centered on mobility:

• The projected increase in DART ridership and shared parking
• Multiple connections to the DART station
• Walkability and pedestrian and bike connections to the larger area 
• Accommodation of DART rail and bus activities 

The third category of evaluation factors addressed the expansion of Addison as a premier regional destination: 

• Imaginative development theme, a mix of uses, and high quality and distinctive architectural design
• Amenities such as landscaping, public spaces, and public art
• Density and height of buildings 
• Integration with Addison Circle and potential expansion south toward Belt Line Road
• Environmental sustainability
• Increase in the residential population base

The Selection Committee approved the issuance of the RFP to solicit developers in April 2021. Five development teams responded, and after presentations by each group, the Selection Committee recommended two finalists for consideration by the entire City Council to proceed to the second phase of the RFP process. After a subsequent round of presentations by the finalists and careful consideration of their proposals, the City Council directed the City Manager to negotiate and prepare a Memorandum of Understanding (MOU) with the AMLI Residential/Stream Realty Partners team as the selected master developer.

AMLI Residential/Stream Realty Partners Proposal 

The AMLI Residential/Stream Realty Partners team proposed a three-phase mixed-use development with an estimated investment of $472 million. It is anticipated that the construction would commence in the summer of 2023. 

The team’s proposal includes:

• Phase I – Stream will construct a six-story, 150,000 square foot office building, 9,000 square feet of retail, and a 625-space parking garage at the corner of Addison Road and Festival Way. Phase I will also include approximately 43,000 square feet of indoor/outdoor retail/entertainment space. AMLI will construct two multi-family buildings with retail space located on the first floors. The western building, at the southwest corner of Quorum Drive and Festival Way, will be thirteen stories in height and contain 250 units and 10,000 square feet of retail. The eastern building, at the northeast corner of Arapaho Road and Quorum Drive, will be seven stories in height with 450 units and 5,000 square feet of retail space. Spectrum Drive is proposed to be realigned to better accommodate this project. The total investment for Phase I of the project is estimated to be $344 million. 
• Phase II – Stream will construct an additional six-story 150,000 square foot office building and an 850-space parking garage on property ground leased from DART at the northwest corner of Quorum Drive and Arapaho Road. The garage will also contain parking for DART riders. This phase of the project contemplates potential changes to the Addison Transit Center to maximize both the development opportunity and better accommodate DART’s rail and bus operations. The total investment for Phase II of the project is estimated to be $104.2 million. 
• Phase III – Stream will construct a 120-room boutique hotel at the northeast corner of Addison Road and Arapaho Road, again on DART’s property. The hotel will share parking with the adjacent office building and DART station. The total investment for Phase III of the project is estimated to be $23.5 million.

Memorandum of Understanding 

At its April 12, 2022 meeting, the City Council approved a Memorandum of Understanding (MOU) with the AMLI/Stream Partners. Given the current uncertainties in the office market and the belief that tenants in the office building are critical to creating the active mixed-use environment needed for the success of the residential, retail, and entertainment uses, the Town is proposing to provide incentives to accelerate the development and occupancy of the Phase I office building. The incentives proposed by the Town and the performance-based commitments by the master development team are captured in the MOU

Additionally, the MOU memorializes the selection of the AMLI Residential/Stream Realty Partners team as the Town’s exclusive master developer for this project and guides the next steps and the various commitments that have been agreed to in principle by all parties to make this project a reality. The MOU addresses such topics as: 

• The basic financial and Phase I incentive agreements between the Town of Addison and the AMLI Residential/Stream Realty Partners team for the project
• Contemplated obligations by each party for Phases II & III of the project 
• Timelines for commencement and completion
• Authority for the development team to begin its necessary due diligence such as surveying and environmental and geotechnical testing 
• Authority for the submission of a zoning application to rezone the property 

Finally, the MOU will serve as the foundation for the other formal agreements that will be developed to govern this project. The additional agreements will be negotiated and finalized as part of the due diligence period and each agreement will require City Council consideration and approval.

You can watch Council's TOD discussion here, read the presentation here which includes a summary of the MOU deal points, and watch a digital flyover of the project here.