Development plans for the area behind the Caven bars on Cedar Springs, now a parking lot, call for a high-rise and a pocket park.
Those plans are on hold.

Higher interest rates keep Cedar Springs development from breaking ground

DAVID TAFFET | Senior Staff Writer

Construction of new apartments on property along Cedar Springs Road formerly owned by Caven Enterprises is on hold, according to sources with Caven, and interest rates are to blame.

Mortgage interest rates currently hover around 7 percent. Less than two years ago the rate was between 3 and 3.5 percent. Fannie Mae, the federal home loan backer, expects rates to fall by about one half of one percent next year but to still remain above 6 percent.

Construction interest rates are different from mortgage rates, but follow a similar pattern.

When the sale of employee-owned Caven Enterprises was first announced in November 2020, the community was shocked and divided. Would this mean the end of the bars that had been there for decades or was this a means of preserving the historic properties?

As per the plan, the bars would be owned by an investor group of younger Caven employees. The older management, along with a number of long-time employees, would retire. And the bars would rent their space from developer Mike Ablon who purchased the properties.

In his development plans, Ablon was leaving the bars untouched, instead incorporating them into his development plans. The bars secured a long-term lease to assure their continuation.

Over the past decade, Caven had received a number of offers for TMC, S4 and the Rose Room, JR.’s and Sue Ellen’s as well as the building that houses Skivvies and Roy G’s.

But, “Developers only wanted the dirt,” Caven board member Ed Oakley said at the time. In other words, the bars would have been razed by those other developers, and new construction would have fronted Cedar Springs Road.

Under Ablon’s 2020 proposal, the bars would remain as a centerpiece of the project as a condition of the sale. Ablon agreed to that condition, because, he said at the time, the property had more value with the bars than without.

Caven officials said they felt comfortable working with Ablon because of his approach to development in the Design District. While other developers have been tearing down showrooms and replacing them with offices, hotels and high-rise and big block apartments built around giant parking garages, Ablon had approach has been different.

Rather than plowing under older buildings, Ablon maintained showrooms and art galleries and added restaurants, residential units and other retail to help turn the Design District into a neighborhood.

For the Cedar Springs Strip, Ablon proposed a building behind S4 that would be as high as 20 stories and would be separated from the bars by a covered pocket park. At the time, he said he hoped that would become a meeting place for the community. Several new retail and restaurant spaces were incorporated into the design to add ambiance.

In May 2021, the Dallas City Council approved a plan to build two high-rise buildings, the pocket park and multilevel parking garages on what are now parking lots behind the bars in the 3900 and 4000 blocks of Cedar Springs Road.

Supporters at the time said what was called the PegasusAblon development would preserve the gayborhood’s history and protect it from other developers who would come in and make wholesale changes, simply demolishing the existing structures with no thought for the area’s history, its residents or the LGBTQ community — even those who don’t live there — that still calls Oak Lawn home.

Opponent said the high-rise buildings would change the character of the neighborhood, and that the future of the entire surrounding neighborhood would be in jeopardy.

However, even without Ablon breaking ground on the property, demolition of older, smaller properties and construction of new mid-rise buildings has continued at a breathtaking pace between Cedar Springs Road and Maple Avenue.

For now, though, the PegasusAblon project remains on hold. And until Ablon secures financing, no ground will be broken.

Wayne Falcone, the owner of the Daisy Polk Inn, at 2917 Reagan St., recently had a problem with the city over the construction suspension. He contacted Councilman Paul Ridley’s office about missing street lights on Dickason between Reagan and Throckmorton, the back side of the PegasusAblon property. Ridley referred the matter to the city transportation department, and temporary lighting was placed.

What is on the city’s radar for lighting are the approved plans that includes pedestrian lighting in the “acorn historical style.” But, “Oncor just put two very ugly utility poles on 4011 Dickason, totally detracting from the custom wrought iron fence I had installed in 2003,” Falcone wrote in an email.

He continued, “Two poles and another unattractive one in the alley. They removed two huge trees but never returned to grind or remove the stumps as promised. I think this is an urgent matter, and someone is going to get hurt. Temporary lighting can be installed on my side of the street with the two new poles placed there six months ago!”

But the city’s answer was not encouraging: “Since this is a private development, we will work with our construction team on contacting the contractor and getting a timeline,” the council liaison and policy advisor for District 14 wrote. “Hopefully, this will nudge them to prioritize restoring lighting on Dickason.”