PEPPER SQUARE
Prior to 1970, most of Far North Dallas as we know it today was ranch and farmland.
In 1975, the triangular-shaped parcel of land at the northeast corner of Preston Road (289) and Beltline Road was owned by the McCutchin family. The property was bordered by a dirt road, Alexis Drive, on the South. The McCutchin family had a large home on the property, including a helipad. By the early 80’s the McCutchins had vacated the property, though they still owned it.
Pepper Square Shopping Center was developed by Ben McCutchin and his brothers in 1978 long before the area became awash with single-family homes and dirt roads were paved. Tom Thumb was an original tenant, but the grocer relocated to the west side of Preston Road. Hobby Lobby, Trader Joe’s (2015) and Stein Mart ultimately anchored Pepper Square with smaller businesses catering to the nearby residents.
In the early1990’s, Henry S. Miller, a Dallas-based real estate development and brokerage firm, bought Pepper Square from the McCutchins.
The Miller family is one of Dallas’ oldest legacy developers owning shopping centers, offices, residential development, and investments across the state. Most famously, Henry S. Miller acquired Highland Park Village in 1976 for about $5 million, which they sold to a Ray Washburne/Stephen Summers partnership in 2009 for more than $170 million.
In 2015, they partnered with Dallas billionaire Gerald Ford who bought major stakes in two Miller-owned North Dallas shopping centers, including Pepper Square. Ford bought a 49 percent stake in the ownership of two centers as “the Dallas firm seeks to liquefy its real estate holdings as it changes business strategy “(Dallas Business Journal).
“We want to take advantage of the low cap rate environment and capitalize on the real estate holdings,” CEO Greg Miller told the Dallas Business Journal.”We agreed internally to keep these assets because they are at two of the best intersections in Dallas.”
But even with the cash infusion, rumored at $15 million and used to improve the facade, plus the strong anchors, Pepper Square never was fully leased. Some in real estate say that was by design: Miller let leases lapse to keep the spaces empty on purpose, deterioration by design, to bend the neighborhood to his way.
As Miller noted in 2015, his corner commercial development is along one of the busiest thoroughfares in the city, Preston Road/Highway 289. According to a Kimberly Horn 2022 traffic study done at Masterplan’s request, 50,014 vehicles per day traveled on Preston Road and 23,303 traveled on Belt Line Road.
Why Redevelop?
Pepper Square is an aging retail shopping center reeling from the ravages of changing consumer shopping habits post-COVID-19. The 43,581-square-foot SteinMart store has been shuttered since 2020. Despite busy Trader Joe’s and Hobby Lobby big box stores, about 84,000 square feet remain empty at Pepper Square.
Traffic on both Preston and Belt Line is already at gridlock conditions – the intersection is already noted by TEXDOT studies as the “second heaviest travel intersection in Dallas”.
Many, many more apartments are coming to the Preston Road Corridor
Preston Del Norte: 1500-2000 apartments
Tonti Investments: 300-500 garden apartments
Proposed Pepper Square: 4400 apartments
Valley View: 800-2000 apartments and condos
With 4,400 new dwelling units this new high-density urban development will be a further traffic impediment for current single-family residents in the impacted areas. And, it will be further impacted by the redevelopment of the old Valley View Mall two miles south.
The Pepper Square proposal calls for +/- 1,550 apartments, ground level retail, commercial offices and a 2-acre park. It would include two 4-story apartment buildings and one 12-story apartment building.
Historically, Preston Road has bookended its vast single family neighborhoods with neighborhood-based centers such as Preston Royal, Preston Forest, Preston Frankford – all low-rise, non-residential or non-high density projects.
The old Valley View/Midtown Shopping Center at the intersection of LBJ and Preston Road has been an eyesore since 2012, throughout the entire tenure of Lee Kleinman’s District 11 City Council terms (8 years) and Jaynie Schultz work as his Plan Commissioner.
Significantly, nineteen (19) homeowners’ associations and neighborhood alliances have come together as the North Dallas Neighborhood Association to challenge the Pepper Square development. The developer, Henry Miller and their planning consultant, MasterPlan, exhibit little interest in developing a functioning, profitable, neighborhood center and working collaboratively with the community.