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Conversation With: Mike Berry, Hillwood Properties

Mike Berry, president of Hillwood Properties, in the conference room at the company's Alliance office.

In the mid-1980s, Mike Berry was just starting his real estate career, working at Ray Hunt’s Woodbine Development Co., when he got a call from Ross Perot Jr., a former frat brother at Vanderbilt. Perot wanted to talk with Berry about working with him on an airport project in North Fort Worth. Despite Berry’s initial skepticism, he joined what was then the Perot Group on July 9, 1988—ground-breaking day for Alliance Airport.

Today that airport anchors AllianceTexas, a 17,000-acre masterplanned community that includes the Alliance Global Logistics Hub, Circle T Ranch, Heritage, Alliance Town Center, Saratoga, and Monterra Village. It’s home to 257 companies who occupy 31.2 million square feet of commercial space and have created 28,000 jobs. The economic impact, so far, is estimated to be about $38.5 billion.

Overseeing it all is Berry, president of Hillwood Properties. I caught up with him recently at Hillwood’s Alliance office to get an update on activity, and to get his thoughts on what AllianceTexas has become.

RealPoints: So what are some of the current projects you’ve got under way out here?
Mike Berry: Well, Deloitte is working on its global training center, Deloitte University, at Circle T Ranch. It’s an 800,000-square-foot campus that will open this fall. The outside is finished; they’re doing interior work. We also have Texas Health Resources building a new hospital at Alliance Town Center. It’s going to be about 200,000 square feet, 90 beds. We’re doing some smaller retail space, about 20,000 square feet, around a Kroger store. And HCA is building a 12,000-square-foot medical office, the first piece of its new health care campus.

RP: So it’s a lot of user-driven activity.
Berry: Exactly. It may not get the big splash out in the market, because it’s not Hillwood stepping out and doing a 800,000-square-foot spec building. But when you add it all up, it’s more than 1 million square feet. And I’d almost rather it be two new hospitals, some retail, and a major Fortune 500 company building a global training center; when you’ve got users driving activity, it really begins to signal hiring, capital spending, and job growth—the kind of things you need before guys like us, who build spec space, start coming in to backfill.

RP: What was the original concept for Alliance?
Berry: Even at a young age, Ross was extremely visionary. It was very easy to get excited about what he was thinking and doing—and there was no doubt that he had the capability to do it, with the family involved. My responsibility was to go out and sell this idea to end users and try to recruit companies to locate there. We used to cold call aviation companies all over the country and all over the world. But the first deal we did wasn’t an aviation deal, it was a rail deal with Santa Fe Railroad. It opened our eyes to the bigger idea: If you have rail and air and highway all linked together, it creates a very unique package of transportation infrastructure. So we decided to do a more multimodal type of project. It was a big hook.

RP: What was it like in the early days?
Berry: Well, today, to try to do something like this from scratch, it would be difficult to just get off the starting blocks. From the day we decided on this approach, where we had to bring in FAA, the city, a design team, to try to do an airport, it was 18 months. From the day we broke down to the day we opened the airport, it was another 18 months. So in three years, we went from, “This is kind of cool idea,” to cutting the ribbon on the world’s first industrial airport. You could never do that today. Being in North Texas geographically, with a tremendous workforce … even back then this was one of the leading markets in the country. Today it’s even stronger.

RP: What was the impact of being in relative close proximity to Dallas/Fort Worth International Airport?
Berry: It was a huge advantage. Some people thought we were competing with D/FW when we started, but it was just the reverse; D/FW was one of our biggest selling points. We’d tell companies, you can locate at Alliance meet all of your industrial needs, with access to airport, rail, and highway; and all of your people can be at the airport for your worldwide travel needs in 15 minutes. Or, for your cargo needs, things that need to come in and belly freight in passenger planes, that could easily be trucked over. So it was a huge story.

RP: How does the original vision for Alliance match up with reality?
Berry: It’s much more than what we thought it would be. What drives the whole Alliance story today, air, highway, rail, and intermodal—which took us to a whole different level; it’s like bringing a seaport to the site—there is really nothing like it. My vision was we’d have air space and aviation companies lining the runway, maybe some warehousing off to the side, some office, retail. But I never saw the depth and breadth of industrial users that could benefit from this whole program. We weren’t thinking about the intermodal piece of it. Once we added the intermodal piece, it opened the door to a whole new host of companies. Today, we have 31 million square feet, 250 companies, 28,000 jobs, and $7.3 billion in total investment. And we’ve only developed about 40 percent of what we have; so we have a long way to go.