BUSI­NESS:

Dal­l­a­site has ad­vised the likes of Steve Jobs, and now he’s re­mak­ing Hen­der­son Av­enue

The Dallas Morning News - - Front Page - By MARIA HALKIAS Staff Writer mhalkias@dal­las­news.com

The man be­hind the Hen­der­son plan.

Mark Mas­in­ter has left a trail of an­gry ac­tivists as he tries to re­make Hen­der­son Av­enue. The old East Dal­las street has es­tab­lished and newer shops but also ar­eas of blight. It’s a 1.1-mile street with pock­ets of suc­cess­ful restau­rants, bars and shops amid dis­con­nected gaps and crooked side­walks that kill its walkability, es­pe­cially at night. Mas­in­ter’s vi­sion is to con­nect it and make it unique to Dal­las. Though he had to scale back his plans, the City Coun­cil ap­proved a ver­sion ear­lier this month that al­lows him to leave his mark on the area. Hen­der­son is an op­por­tu­nity for Dal­las, he said, to have its ver­sion of Ab­bot Kin­ney in Venice, Calif., King Street in Charleston, S.C., El­iz­a­beth Street in Man­hat­tan’s Soho dis­trict or 23rd Av­enue in Port­land, Ore.

“I think Hen­der­son has that kind of vibe cul­tur­ally,” he said. “We own build­ings that we won’t tear down. The Porch, Cap­i­tal Pub, Fire­side are all cool build­ings that aren’t go­ing any­where. Hound­stooth, not go­ing any­where; Gemma, not go­ing any­where.”

“I’m try­ing to do some­thing taste­ful and last­ing — as it gets older, it looks bet­ter,” he said.

Mas­in­ter has made a ca­reer of ad­vis­ing re­tail­ers about when and where to open stores and de­vel­op­ers about how to fill their re­tail spa­ces.

Ever won­der why the mall across town has a J.Crew store and yours doesn’t? Or who de­cided when your city fi­nally got an Ap­ple store? Mas­in­ter knows.

He’s the one Ap­ple called when Steve Jobs de­cided in 2000 that Ap­ple would have stores. He and his part­ners at Open Realty Ad­vi­sors have been qui­etly work­ing out of Dal­las for decades on re­tail projects from Cal­i­for­nia to New York and D.C. and from Canada to Asia.

Mas­in­ter is in a part­ner­ship on an 85-acre, mixed-use de­vel­op­ment in North­ern Vir­ginia’s Loudoun County near Dulles Air­port. The project was un­der­way be­fore Ama­zon said in Septem­ber that it’s look­ing for a sec­ond head­quar­ters, and it’s now con­sid­ered a lead­ing HQ2 site prospect in the Wash­ing­ton, D.C., area.

In Dal­las, Open Realty and Los An­ge­les-based CIM Group have been buy­ing real es­tate along North Hen­der­son Av­enue for more than five years. The part­ner­ship owns 127,000 square feet of 18 sin­gle-story, stand-alone and strip re­tail build­ings along Hen­der­son be­tween Ross Av­enue and North Cen­tral Ex­press­way.

Mas­in­ter won ap­proval this month from the Dal­las City Coun­cil to build a 156,500-square-foot of­fice, re­tail and res­tau­rant de­vel­op­ment on 4.5 va­cant acres on the north and south sides of Hen­der­son be­tween Glen­coe Street and McMil­lan Av­enue.

While the plan had strong sup­port from neigh­bors, it faced fierce op­po­si­tion from some vo­cal East Dal­las res­i­dents who be­lieve the project is too big and will bring too much traf­fic to the broader area.

Mas­in­ter agreed to scale back por­tions of the project to in­clude a shorter of­fice build­ing in ad­di­tion to a two-level un­der­ground park­ing garage for the 72,500 square feet of of­fice space, 72,000 square feet of re­tail and 12,000 square feet of restau­rants. The space is in of­fice build­ings and bun­ga­lows that wrap around a cor­ner to fit in with the area’s older homes. Deputy Mayor Pro Tem Adam Me­drano said be­fore a vote was taken at City Coun­cil that he re­ceived more emails of sup­port than com­plaints against the project.

Mas­in­ter per­suaded the coun­cil and a ma­jor­ity of sur­round­ing neigh­bors that he has tested his ideas and has rea­son to be­lieve that the area has the best chance of be­com­ing Dal­las’ premier walk­a­ble neigh­bor­hood.

He helped in­ter­net-first brands such as Warby Parker and Bono­bos find their cus­tomers in the phys­i­cal world, and he says, “they helped me prove the con­cept of Hen­der­son” when both opened stores there in 2014.

Mas­in­ter, 54, has been be­hind the scenes from the be­gin­ning on the hot con­cept roll­outs in re­tail’s hey­days of the 1990s and 2000s, in­clud­ing Restora­tion Hard­ware, J.Crew and Ap­ple, the store that has re­de­fined the up­per ranges of sales-per-square-foot and is at the top of the check­list for Class A prop­er­ties.

Young turk

An At­lanta na­tive, Mas­in­ter came to Dal­las as a high school stu­dent to check out South­ern Methodist Univer­sity. It was one of those beau­ti­ful sunny days when the cam­pus looks its col­le­giate best and is alive with stu­dents. He picked SMU.

After grad­u­at­ing in 1986 with a de­gree in po­lit­i­cal science, he had a choice to make about his ca­reer.

“I saw all th­ese young guys driv­ing nice cars and turns out they were all in the real es­tate busi­ness. So I de­cided I was go­ing to be in real es­tate,” Mas­in­ter said. He got “a grunt job” at Cush­man & Wake­field where he learned to cold call, write pro­pos­als and go after the busi­ness.

He was 29 when he met Restora­tion Hard­ware founder Stephen Gor­don. There were plenty of fur­ni­ture stores in Amer­ica, but Gor­don’s five­store Cal­i­for­nia com­pany’s fur­ni­ture was dif­fer­ent from any­one else’s. There were ac­ces­sories and re­pro­duc­tions of old toys and some­thing to buy even if you couldn’t af­ford a leather sofa.

Mas­in­ter knew it was a great con­cept, but he didn’t know how to make it grow and make money do­ing so.

In 1994, he brought Restora­tion Hard­ware as an in­vest­ment op­por­tu­nity to Mar­shall Payne at Car­di­nal In­vest­ments Co., best known lo­cally for buy­ing the Texas Rangers in 1987 and build­ing the team’s stature and op­er­a­tions.

Even­tu­ally, the in­vestors in­clud­ing Mas­in­ter pur­chased a 45 per­cent stake and prof­ited nicely from Restora­tion Hard­ware’s growth and ini­tial pub­lic of­fer­ing. At the same time, Mas­in­ter said, the whole ex­pe­ri­ence ended up be­ing his MBA.

Payne, who is now chair­man and a founder of Dal­las­based CIC Part­ners, the suc­ces­sor of Car­di­nal, “helped me be­come a bet­ter in­vestor and ad­viser,” Mas­in­ter said.

“Mark con­vinced Gor­don to take on a chief op­er­at­ing of­fi­cer, a tough thing for any founder to do,” Payne said. “But Mark’s knack for form­ing re­la­tion­ships made it hap­pen.

“Then and now, Mark has in­cred­i­ble en­ergy and in­sights. Back then he needed to get honed.”

Mas­in­ter’s ca­reer is not void of mis­takes. Payne said a fund that he in­vested in with Mas­in­ter in 1990s to pro­vide fi­nanc­ing to emerg­ing re­tail and res­tau­rant busi­nesses didn’t work out. And Mas­in­ter tried to launch Ev­ery­thing Or­ga­nized, a Con­tainer Store copy­cat that didn’t make it ei­ther. But that’s busi­ness, and the ups were big­ger than the downs.

Ap­ple con­nec­tion

When Mas­in­ter first got a call in 2000 from Ap­ple founder Steve Jobs, the idea that there would be Ap­ple stores was still a big se­cret, said Ron John­son, who was hired by Jobs that same year to head Ap­ple re­tail. In an in­ter­view last week, John­son re­called Mas­in­ter’s first meet­ing with Jobs.

It lasted five min­utes. “Mark and his part­ners came to Cu­per­tino, and we’re in Steve’s con­fer­ence room. Steve in­ter­rupted Mark and said, ‘I heard you were re­ally smart — smarter than this. I don’t think you made a good pre­sen­ta­tion. What hap­pened? Re­think this and come back in a week.’”

Steve left the room and the mo­ment’s awk­ward­ness ended up be­ing just a blip. The next week they were back in Jobs’ con­fer­ence room. Even in 2000, the fu­tur­ist Jobs “was not a mall per­son,” John­son said, and he ques­tioned plans to put Ap­ple stores in malls.

“Steve called and said he was skip­ping the meet­ing; it was my de­ci­sion, but he ex­pected me to make the right choice,” John­son said. “Steve wanted to make sure I was de­mand­ing. That’s how our re­la­tion­ship with Mark started.”

Mas­in­ter ex­plained to Jobs that if Ap­ple were go­ing to have a sig­nif­i­cant re­tail foot­print, it would have to open stores in malls.

“He was quite elo­quent in con­vinc­ing Steve that all re­tail is lo­cal and in many mar­kets the mall is the place his cus­tomers love to shop. I think Mark was re­fer­ring to great malls like NorthPark when he made this case.”

Since then, Open Realty has lo­cated all of Ap­ple’s 300plus stores in North Amer­ica, in­clud­ing the first two that opened on the same day in 2001, both in malls that re­main Class A prop­er­ties to­day: Tysons Cor­ner in McLean, Va., and Glendale Gal­le­ria, just north of Los An­ge­les. And lots of Ap­ple stores are also on streets. Per­haps the most fa­mous is the hard-to-miss glass cube over the un­der­ground store on Fifth Av­enue in New York City.

“I re­mem­ber when Mark said we had to be on Knox Street,” John­son said. The two walked Knox, and John­son’s first re­ac­tion was, “‘Are you sure?’ It seemed very quiet with a lot of home stores and not a lot of traf­fic.”

“Mark told me that’s where Ap­ple be­longs, and he was right,” John­son said. The store opened in Jan­uary 2003 right next to Restora­tion Hard­ware, where Mas­in­ter cut his teeth.

Mas­in­ter won’t speak on the record about his work for Ap­ple, but John­son, who led Ap­ple re­tail from 2000 to 2012, said he’s of­ten asked who does Ap­ple’s real es­tate.

“Mark is one per­son I’ve rec­om­mended un­hesi­tat­ingly,” John­son said.

His phi­los­o­phy

It’s get­ting harder and harder for re­tail­ers to know when and where to open stores. Sub­ur­ban malls are no longer a slam-dunk strat­egy for ex­pand­ing a chain. On­line shop­ping is mak­ing stores less rel­e­vant, and grow­ing ur­ban pop­u­la­tions want more places where they don’t need a car to get to shop­ping and restau­rants.

“Re­tail is not dead. It’s just dif­fer­ent, and to be a suc­cess­ful brand to­day, you have to be in­ter­est­ing,” Mas­in­ter said. “Peo­ple aren’t go­ing to co­coon them­selves in their homes. They want to come out and have cof­fee and walk through a park. Peo­ple still like to get out and go, but to places that speak to them.”

Not that many stores are grow­ing be­cause they don’t

“I think Hen­der­son has that kind of vibe cul­tur­ally. We own build­ings that we won’t tear down. The Porch, Cap­i­tal Pub, Fire­side are all cool build­ings that aren’t go­ing any­where. Hound­stooth, not go­ing any­where; Gemma, not go­ing any­where.” Mark Mas­in­ter

need the big foot­prints they have, he said. “But there will al­ways be great shop­ping des­ti­na­tions like NorthPark. It’s one of the great­est malls on the planet, and the [Nasher] fam­ily has done a great job keep­ing it rel­e­vant. It in­creas­ingly is get­ting bet­ter be­cause the fam­ily re­ally cares. That car­ing oozes out of ev­ery cor­ner of the place.”

The Dal­las-Fort Worth area keeps grow­ing, and it’s on its way to be­com­ing the third-largest U.S. metro area, he said. “It’s a dif­fer­ent world. We’re hop­ing peo­ple will walk to work here. We en­vi­sion the of­fice space be­ing cre­ative co-work­ing space.” Why Hen­der­son?

“I felt like there was a real op­por­tu­nity for a real street dis­trict to ex­ist in Dal­las. Knox will al­ways be Knox, and it’s very cool, but it still leaves a lot of room, a lot of white space.”

Knox Street has been de­vel­op­ing up, and more tall build­ings are in the works. “There’s not go­ing to be a lot of ver­ti­cal de­vel­op­ment on Hen­der­son,” Mas­in­ter said. “It’s dif­fer­ent. That’s not what it needs. We want to fill out the street with in­ter­est­ing food and bev­er­age con­cepts and stores.”

Legacy West

Mas­in­ter said he’s been for­tu­nate to work with “some of the best minds in re­tail­ing” as they were be­gin­ning and just start­ing their com­pa­nies’ up­wards tra­jec­to­ries: Gor­don and later Gary Fried­man at Restora­tion, Mickey Drexler at J.Crew and Madewell, Andy Dunn at Bono­bos, Neil Blu­men­thal at Warby Parker among them.

He is also proud of the projects that help com­mu­ni­ties thrive long term, in­clud­ing Plano’s Legacy West. He was in­vited into a part­ner­ship with de­vel­oper Fehmi Kara­han, Robert Shaw at Colum­bus Realty and In­vesco to pop­u­late Legacy West with stores and restau­rants. Mas­in­ter worked on the 425,000 square feet of re­tail and restau­rants in the $2 bil­lion Legacy West de­vel­op­ment that in­cludes Toy­ota’s North Amer­i­can head­quar­ters.

“We had to change the nar­ra­tive about Plano,” Mas­in­ter said. In a year of record store clos­ings in 2017, Mas­in­ter con­vinced Front­gate to open its first store in Texas, the only Tommy Ba­hama Res­tau­rant in North Texas and only the sec­ond Madewell in the mar­ket to come to Legacy West. It also has the first food hall in the mar­ket.

Mas­in­ter’s na­tional re­la­tion­ships helped Legacy West open faster than some might ex­pect, Kara­han said.

And now he has a smaller project — but one he is lead­ing — on Hen­der­son.

“Mark has worked re­ally hard on Hen­der­son. He’s won­der­fully cre­ative and is think­ing all the time be­cause he’ll tell you that great streets hap­pen one great deal at a time,” said Open Realty part­ner Jonathan Siegel.

Lo­cal own­er­ship makes a dif­fer­ence, Mas­in­ter said. “West Vil­lage has lo­cal own­er­ship and is a rel­e­vant place. [Bil­lion­aire oil­man and de­vel­oper] Tim Head­ing­ton is a gift to this city be­cause of the in­vest­ments he’s mak­ing in down­town Dal­las. Look what Klyde War­ren Park did for Dal­las.”

Now Mas­in­ter is get­ting his turn. “I want to play a small role in mak­ing Dal­las a city with a soul.”

Louis DeLuca/Staff Pho­tog­ra­pher

Mark Mas­in­ter, a re­tail ad­viser and de­vel­oper in Dal­las, has met re­sis­tance on his grand vi­sion for Hen­der­son Av­enue, but the Dal­las City Coun­cil has ap­proved a scaled-down ver­sion of his re­de­vel­op­ment idea.

Louis DeLuca/Staff Pho­tog­ra­pher

Mark Mas­in­ter has made a ca­reer of ad­vis­ing re­tail­ers about when and where to open stores and de­vel­op­ers about how to fill their re­tail spa­ces. He’s ad­vised Steve Jobs on Ap­ple stores and helped plan 425,000 square feet of re­tail space at Legacy West.

Open Realty Part­ners

Ren­der­ings show of­fice build­ings along North Hen­der­son Av­enue be­tween Glen­coe Street and McMil­lan Av­enue in East Dal­las.

Ron Baselice/Staff Pho­tog­ra­pher

North Hen­der­son Av­enue has newer and es­tab­lished stores but also pock­ets of blight, which are tick­eted for trans­for­ma­tion.

Andy Ja­cob­sohn/Staff Pho­tog­ra­pher

“I felt like there was a real op­por­tu­nity for a real street dis­trict to ex­ist in Dal­las,” Mark Mas­in­ter says, and Hen­der­son Av­enue is that street he sees.

2017 File Photo/Jae S. Lee

Mark Mas­in­ter also was in­vited into a part­ner­ship to pop­u­late the $2 bil­lion Legacy West de­vel­op­ment with stores and restau­rants. He con­vinced Front­gate to open its first store in Texas there, as well as Tommy Ba­hama Res­tau­rant to open its first North Texas lo­ca­tion.

2016 File Photo/Getty Im­ages

Mas­in­ter and his part­ners at Open Realty Ad­vi­sors found the lo­ca­tions for all of Ap­ple’s 300-plus stores in North Amer­ica, in­clud­ing the hard-to-miss glass cube over the un­der­ground store on Fifth Av­enue in New York City.

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