by Holly L. Estridge

Dallas Business Journal, March 3, 2006

Several Dallas developers have tapped into landlocked Frisco acreage, with plans to develop a $300 million high-end gated community.

The Hills of KingsWood, a 480-lot subdivision, with homes priced from $400,000 to $3 million, will be located on the south side of Lebanon Road, east of F.M. 423. The purchase price of the land was not disclosed.

Dallas' Southbrook Development and the Tower Group expect to break ground on the first 114-lot phase of the 330-acre development in eight to 12 months. Highland Capital Real Estate Advisors, a subsidiary of Dallas-based Highland Capital Managament, L.P., is an investor in the project, which backs up to Tomlin Properties' Lone Star Ranch.

"The property hasn't been developed because it's landlocked," said John Zouzelka, chairman of the Tower Group. "We’re spending money to bring an access road and two bridges in."

The partners are investing $4 million in a new road and bridges to the development.

The property is situated near heavily wooded Army Corps of Engineers land, surrounding Lake Lewisville. Zouzelka said the land's elevation places lots 60 feet above the trees. "The land is just so physically beautiful," he said.

It's unlikely that the developers will presell lots to builders and instead will focus on custom homes, Zouzelka said.

"Some of the areas that have been the long-term producers for custom housing, like Starwood, Stonebriar Park and Chapel Creek, are all running out of lots, or will be over the next few years," said Ted Wilson, principle of Residential Strategies, an operation that studies the new-home business in the Metroplex. "There's been some head-scratching as to where the custom market goes from here."

Wilson said much of the new development is heading up to Prosper, with construction of the Dallas North Tollway pushing out toward U.S. 380. "I think what the Tower Group is going to try to do is target a certain segment of those custom buyers who want to live in Frisco," he said.