Dallas Suburb Looks to Strike Again While the Headquarters Iron Is Hot After Landing PGA Headquarte
With PGA of America planning to bring its corporate headquarters to Frisco, Texas, one of the fastest-growing cities in the United States, officials and real estate developers are gearing up to transform the Texas community into yet another magnet for corporations.
The team behind the public-private partnership key in wooing PGA is hoping that a proposed 2,500-acre master-planned, mixed-use development called Fields – in a city that had been pitched unsuccessfully as a possible site for Amazon’s second headquarters – will lure companies with the help of two new championship golf courses.
Already known for its deal-making savvy with major sports teams, Frisco wants to leverage its rapid growth in bringing new businesses to its borders. "Going forward, we'll be much more aggressive in the relocation marketplace," said Frisco Mayor Jeff Cheney, who is also a residential real estate agent. "We have been very strategic about our approach to land the next relocation in the market, and Fields is a prime location.”
The Dallas suburbs have well-established track records for winning company headquarters. One established corporate magnet is the bordering city of Irving, where energy producer ExxonMobil is based. It has the biggest concentration of Fortune 500 companies in Texas outside Dallas and Houston. That momentum has traveled north on U.S. Route 75 to Plano and now Frisco. Show Full Story
Frisco, which sits about 30 miles from downtown Dallas, has grown quickly over the past few years, ranking as the No. 1 fastest-growing large city by the U.S. Census Bureau with an annual growth rate of 8.2 percent, which is 11 times the national rate. Frisco has a population of 180,000 and each day adds an average of 37 new residents.
Landing the next company headquarters won’t be easy though, because there’s plenty of competition in North Texas.
The region has 13 cities with more than 100,000 residents. Many have their own economic development arms offering up enticing incentives or partnerships to would-be corporate residents. For this reason, it's not uncommon for firms to move their corporate homes to a new city only a few miles away.
Plano has snagged a big share of the recent corporate expansions and moves, including Toyota's new campus, a project Frisco had hoped to land. Since 2010, Dallas-Fort Worth has absorbed 25 million square feet of office space, with about 13 million of those square feet located in Frisco and northern Plano, according to data from real estate firm Jones Lang LaSalle. The majority of that office space absorption is tied to Legacy West, a $3.2 billion, 255-acre mixed-use development in Plano that’s filling up with major corporate tenants.
In August, Hunt Realty Investments, in a partnership with other investors , closed on the purchase of the 2,500-acre site now known as Fields. Even though plans for the massive contiguous land assemblage have yet to be fully designed or conceptualized, Fields has the ability to become Frisco's center of gravity at a size nearly 10 times larger than Legacy West, said David Kahn, a CoStar market analyst for the Dallas-Fort Worth market.
By developing this part of Blackland Prairie in northern Texas, Dallas-based Hunt Realty, along with The Karahan Cos., are seemingly seeking to turn Frisco into a new version of Tysons, Virginia, outside Washington, D.C., which has become an epicenter of new office development, said Walter Bialas, vice president of market research in JLL's Dallas office.
"The addition of the PGA underscores how attractive the northern suburbs are for companies," Bialas said. "In the PGA's case, they needed so much land, which Frisco has, and the city is easily accessible for employees with good schools and enough land to build two golf courses."
Plano still has more opportunities to become a more dense city as sprawling corporate campuses are replaced with vertical developments, Bialas said. But Frisco, he said, still has the land to grow and attract big business.
No matter to what degree Fields is successful in attracting new corporate tenants, there’s no denying the strength of Frisco’s office market, which has exploded from less than 700,000 square feet of space to more than 8 million square feet since 2000, according to CoStar data.
The majority of that space is located along the Dallas North Tollway. The area has attracted so many mixed-use projects that for years Frisco's economic development arm referred to a mile stretch of the roadway as the “$5 Billion Mile” in marketing materials.
But the moniker was abandoned this past summer, partly because one high-profile mixed-use project called Wade Park has seemingly stalled, in need of financial backing.
If plans are restored, Wade Park could be one of a handful of planned developments expected to bring 20 million square feet of office space to Frisco, according to CoStar research. That dwarfs development plans for other surrounding cities in the North Texas region, said Kahn, who has analyzed the Dallas-Fort Worth market for years. Kahn said Frisco may be the site of the densest concentration of mega mixed-use developments in the U.S. outside of New York's Hudson Yards.
Frisco has a history of putting together lucrative public-private partnerships with the Dallas Cowboys, as well as Hunt Sports Group and Major League Soccer team FC Dallas in the development of Toyota Stadium, and later, the National Soccer Hall of Fame. Frisco's economic prowess also led to the relocation of Jamba Juice from California and created a place for Fiserv, a financial tech firm, to consolidate its regional operations.
Cheney, who became the city's mayor in May 2017, has been focused on building Frisco, once perceived as a sports and entertainment town, into a contender for corporate jobs.
He and City Manager George Purefoy followed in Plano’s footsteps by recruiting Fehmi Karahan, president of The Karahan Cos., to plan a Legacy West-type development for Frisco. Along with Toyota, Legacy West also attracted regional operations for JPMorgan Chase, Liberty Mutual Insurance and FedEx Office to the curated, urban-like hub on the acreage surrounding J.C. Penney's corporate campus. Together, these companies spurred millions of square feet of new office space and brought thousands of jobs to Plano.
Karahan said Frisco is poised to compete for the region's next big corporate relocation.
"Like Legacy West, we didn't know we would attract those kinds of corporations, but we watched it happen over the years," he said. "This land has all the potential, and certainly the PGA is a great start for greater things to happen."
PGA has called Florida home for 50 years and wasn’t initially looking to relocate its headquarters.
"We felt like it was a very fertile area for a PGA championship game, and we talked to the city of Frisco about building championship golf courses," said Darrell Crall, PGA’s chief operating officer. "Then, as our board of directors decided we should consider a potential relocation of our headquarters, we searched the entire country and Frisco came up as the leader at every turn."
The professional golf industry group with about 29,000 members began its real estate search about two years ago with a request for proposal, which brought in responses from 212 cities throughout the United States. Frisco quickly rose to become a top contender because the city is centrally located to the rest of the country with Dallas Fort Worth International Airport being a major travel hub. Also working in Frisco's favor were its strong business community, highly educated workforce and quality of life.
The PGA headquarters and golf course development is expected to cost more than $520 million, according to a development group being overseen by a newly formed entity called Omni Stillwater Woods, a joint venture that includes Irving-based TRT Holdings, a private firm that owns the Omni Hotels & Resorts chain, and two private investment firms, Stillwater Capital and Woods Capital. The group plans to begin hiring architects and general contractors in January.
The newly minted partnership with PGA and the city of Frisco includes more than $160 million of economic incentives from various entities including local and state governments, economic and community development groups, and the school district. By comparison, the incentives are more than double those offered to Toyota for its move to Plano from Torrance, California.
In 2022, PGA plans to relocate its corporate headquarters to a new facility on 600 acres, a portion of which will overlap the Fields development near Rockhill Parkway and Legacy Drive on the west side of the Dallas North Tollway about a third of a mile south of U.S. 380. The Fields site spans the tollway and abuts a 100-acre University of North Texas development to the east at the southwest corner of Preston Road and Panther Creek Parkway.
Fort Worth being the No. 4 and No. 5 market in the country ... for championship golf, it seemed like a natural draw."
With the planned relocation, PGA is expected to employ at least 100 workers at the new Frisco facility, which will include an education center with classrooms and teaching facilities connecting to the golf courses. About half of the PGA's 200 employees are expected to stay in Palm Beach Gardens, Florida, an upscale community north of West Palm Beach.
The golf courses, also scheduled to open in 2022, are expected to be complemented six months later by a 500-room Omni hotel, a 127,000-square-foot conference center and a 40,000-square-foot retail village showcasing innovative golf apparel and equipment. PGA's Northern Texas Section plans to relocate its Dallas office to the Frisco campus.
Crall, who plans to relocate his family from south Florida to the Frisco area, says PGA's future Junior League Championship in Frisco will have a similar impact on the region as the Little League Baseball World Series has on Williamsport, Pennsylvania, with the ability to attract an international audience. In the end, Crall said he hopes the move will help PGA grow the game of golf.
"We want to create an environment that is encouraging for them, and this market is incredibly diverse," he added.
CoStar reporter Paul Owers contributed.