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The empty former headquarters of H. Ross Perot Sr.’s legendary Electronic Data Systems in Plano could one day become a hub for companies creating life-saving technology.
That’s the vision of Dallas-based NexPoint, which says it’s ready to invest over $3.6 billion in an ambitious plan to turn the existing 1.6 million square feet of office space into a life sciences complex.
And it wants the city to partner with it, possibly by tapping into Plano’s economic development incentive programs supplying tax breaks and cash grants to assist in readying the campus for a new use.
NexPoint, an alternative investment firm with $14 billion in assets under management, calls its plan the TxS District – “Technology x Science.”
The concept is to create lab and manufacturing spaces that attract leading researchers in gene and cell therapy, providing facilities and amenities for biotech and pharmaceutical firms at all stages of development. Land and additional properties totaling about 4 million square feet would be developed in phases to create a life sciences district covering 135 total acres.
Early conversations with the city show promise.
Plano city manager Mark Israelson said city leaders are excited about the project because it would reimagine and repurpose the heart of Plano’s Legacy Business Park on Legacy Drive, just east of the Dallas North Tollway.
The former EDS complex has two eight-story buildings connected by an upper-level bridge of office space. The unique office complex was the brainchild of Perot, who built the surrounding business park and relocated his company to Plano from North Dallas. Hewlett Packard bought EDS in 2008.
NexPoint has been talking with Plano officials about the idea for a year.
“Their vision for the project will provide Plano with an opportunity to compete with New England and Southern California for industry-leading jobs and programs,” Israelson said.
Frank Zaccanelli, a partner in the project, said it can’t happen without the right public-private partnership. “But if any city can figure out how to make this work, it’s Plano,” he said.
Zaccanelli is president of NexPoint Development Co., the development arm of NexPoint’s real estate platform. James Dondero, NexPoint’s founder and principal, brought Zaccanelli on last year to oversee major development projects, including the TxS District in Plano and Cityplace Tower in Dallas.
The master plan
The main building at 5400 Legacy Drive has been empty for about four years. NexPoint bought it in 2018 and looked for traditional tenants to fill it.
But it was an investment in another company, IQHQ, in 2019 that laid the groundwork for the current plan.
Matt McGraner, who sits on IQHQ’s board of directors, describes the company as a real estate firm that develops some of the top lab spaces around the country. Its projects include San Diego’s Research and Development District and Boston’s Fenway Center.
In 2020, NexPoint pivoted to a life sciences “cradle to grave” concept for the Plano site. That’s also around the time when Lyda Hill Philanthropies, in partnership with J. Small Investments, took the wraps off their plan to turn the former Exxon Mobil headquarters in Dallas into Pegasus Park, a now-thriving collection of biotech companies and lab space.
NexPoint sees its redevelopment project occurring in four phases over six to seven years, with the first two phases transforming two of the existing buildings into 972,287 square feet of multi-use labs and office space and 123,000 square feet of amenity space.
The TxS District proposal also includes 400,000 square feet of flexible production space on the main campus for multiple tenants in the first phase. Additional production and cold storage facilities are planned for adjacent acreage in later phases.
Israelson said reinvestment has been a trend in Plano in recent years, since the city is “landlocked” with few undeveloped properties within its existing 72-square miles. But projects of this size take time to develop.
“It can be simple and short or it can be longer and complicated, but it really depends on the needs of the project,” Israelson said.
Ethan Garner, region lead for commercial real estate firm JLL, said NexPoint approached his firm about a year ago. Garner works with Matt Daniels, JLL’s New England brokerage lead, and the firm has been involved in creating other life sciences districts around the country.
JLL worked on Levit Green, a 53-acre project in Houston’s medical district, and Pegasus Park, the 23-acre Lyda Hill-backed project in Dallas, to create a biotech hub.
“We do a significant amount of life science nationally – San Diego, Raleigh and Boston,” Daniels said. “We really feel like the dynamics for northern Texas really lend itself well to grow through the life sciences industry and building out of the next great cluster and ecosystem.”
Dallas-Fort Worth is experiencing a biotech boom that now puts it among the nation’s top metros for life sciences companies. D-FW cracked the top 20 for the first time, scoring the 16th spot in an analysis by CommercialEdge, which examined 45 metros using government data and its own research.
Eric Danielson, director of business development at CRB Group, an engineering consulting firm, said the building NexPoint owns will “easily accept conversion” to a life sciences purpose. CRB Group also did the design work for BioLabs in Pegasus Park, Danielson said.
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Thinking of the future
Many of the buildings in NexPoint’s renderings conjure up a futuristic vibe.
“If we develop this, we have to bring a 1980s building into the 21st century,” Zaccanelli said, referring to amenities that appeal to today’s workforce, such as a fitness center, juice bar and day care to help working parents.
NexPoint plans to recruit the biggest and brightest talent to Plano with a $100 million incubator fund the company hopes to create, Zaccanelli said. Those recruits would be “whoever’s coming up with the latest life-saving technology,” McGraner said.
JLL’s Garner said he thinks the region’s biotech ecosystem is ready to grow.
“The science is here,” he said. “The capital is here. We’ve got all of the ingredients from a pro-business environment to attract these types of companies. We just are lacking the infrastructure.”
Helping with the economic aspects of the project is Ray Perryman, president and CEO of the Perryman Group. His Waco-based company has worked on major development initiatives all over the world in his 40-year career.
Perryman said he’s “rarely seen one with this much potential in terms of its sheer size, industrial focus and potential catalytic effects.”
“Many years ago, the EDS campus put Plano and the Dallas-Fort Worth area on the map as a global force to the emerging electronics industry,” Perryman said in an email. “NexPoint’s redevelopment of this iconic location can do the same thing in a newly exploding sector – greatly enhancing the area’s position in the burgeoning life sciences and bioscience manufacturing industries.”
The project could be a “game-changer” for North Texas, he said.
“The NexPoint life sciences campus is an important project with the scope to make a real difference, bringing in tenants, workers, researchers and guests from around the world,” Perryman said. “Once mature, it will likely generate billions in economic output and tens of thousands of jobs.”
Demand for life sciences
NexPoint doesn’t want to compete with Pegasus Park. Instead, it wants to build on that project’s success. Southern Methodist University is the latest to take up residence at Pegasus Park, moving its biotech research to the facility.
JLL’s Daniels said life sciences districts are “here to stay.”
“The industry is still growing, even in a down economy that we’ve seen the last six months,” he said. “There’s a tremendous amount of money behind it and there needs to be more infrastructure.”
Investing in real estate and infrastructure is NexPoint’s sweet spot.
The company, founded in 2012, serves as adviser to four publicly traded real estate investment trusts. It also manages other alternative investment vehicles outside of its real estate offerings.
NexPoint’s real estate play initially focused on the multifamily sector. It launched NexPoint Residential Trust in 2015. The firm has since expanded across real estate sectors.
Today, in addition to multifamily properties, NexPoint’s real estate expertise includes single-family rentals, self-storage, hospitality, office and life sciences. About 70 of the company’s 100 employees work out of its Dallas headquarters.
“This life science platform comes out of our serendipitous placement of capital in 2018, before COVID, with a couple of partners that are getting in front of some of the tailwinds, which is aging populations,” McGraner said.
Other than Pegasus Park, McGraner said no one has tried to pull off what his team wants to do in North Texas. He even quotes Kevin Costner’s famous line from Field of Dreams to sum up his faith in the project.
“If you build it, they will come,” McGraner said.
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