On a now-barren hill, mounds of dirt at U.S. Highway 380 and Interstate 35 await the next move in a planned development that has residents asking what’s happening nine months after Allegiance Development Inc. of Dallas unveiled an estimated $1 billion project.

DRC/Al Key

A hill on U.S. Highway 380 awaits the next move in Allegiance Development Inc.’s planned $1 billion project.

Krum resident Joe Pytleski said he became concerned early this year about the lack of progress at Rayzor Ranch. He noticed the heavy equipment was no longer working the land that had once been inhabited by longhorn cattle.

Pytleski is one of several area residents, developers, real estate brokers, business owners and others who are asking about the status of what some have touted as the largest project ever proposed for the city of Denton.

The project — unveiled last August by Allegiance Development and other investors, including Torreon Capital of Austin — is still on target to open in Denton, but possibly later than initially expected, says Randy Holcombe, formerly with Allegiance Development.

“We’re continuing to drive the project forward,” said Holcombe, who created Holcombe Properties LLC of Dallas in January.

He added that Torreon Capital, which invested at least $28.5 million in the project — its largest investment in 17 projects listed on the company’s Web site — is “still very much committed to Rayzor Ranch.”

Torreon Capital indicates on its Web site, www.torreoncapital.

com, that it can provide equity funding for developments across the U.S., investing in projects that cost between $10 million to $50 million or more.

Holcombe said the partnership in which he is included is the same as it was two years ago.

“We’ve just been working with issues,” he said, which has delayed the project’s timeline. “We probably got a little ahead of ourselves on mass grading” of the land.

Project officials have been working with the U.S. Corps of Engineers on drainage issues as well as seeking final approval of design plats from the city, Holcombe said.

“You can’t get a building permit until you get your final plats approved,” he said.

Charles Ames, president of Allegiance Development, said Tuesday that his company was in the process of replacing financial partners.

“In a nutshell, they were part of the Wall Street meltdown several weeks ago,” Ames said. “We’re replacing old capital with new capital.”

Torreon officials indicated they would prefer not to comment at this time.

Holcombe, saying he was speaking on behalf of the partnership, added that the size of the project makes it a complicated development, but repeated that the development would still have the same partners.

Both Ames and Holcombe said residents likely would see development of Sam’s Club and Wal-Mart first on the north side of U.S. 380. The north side of the project, known as Rayzor Ranch Marketplace, is projected to open in either spring 2010, according to Holcombe, or summer 2010, according to Ames.

Ames and Holcombe said developers were in negotiations with Lowe’s for a home improvement store in Rayzor Ranch Marketplace.

Holcombe says negotiations continue with retailers for locations in the estimated 1.2 million-square-foot Rayzor Ranch Town Center.

J.C. Penney and Dillard’s — both of which announced intentions last year to open stores at Rayzor Ranch Town Center — are currently operating anchor stores in Golden Triangle Mall.

Feldman Mall Properties Inc., which owns the Denton mall, asked City Council members to reject proposed incentives and rezoning requests for Rayzor Ranch to prevent potential loss of retailers at a time when the company had plans to significantly renovate the mall.

In February 2007, mall officials revealed plans for up to $50 million worth of renovations, including a multi-screen IMAX theater, food court, additional restaurant spaces, new entrances and a center court with added seating.

“At this point, we still have every intention to move forward with the [renovation] project,” said Matt Ludemann, mall manager. “And, obviously, we are interested in seeing what the [Rayzor Ranch] project does.”

Parts of the mall renovation plan would be directly affected by what happens with the Rayzor Ranch project, Ludemann added.

Officials in the Rayzor Ranch project are stopping by to meet city staff as development continues. The latest faces representing the project, however, are with Torreon Capital or other partners in the project.

Both Ames and Holcombe say residents should expect to see dirt moving by May or June.

On the east side on Denton along U.S. 380, the Villages of Crossroads, another major development with the same partners, is further along in the construction process. Ames said the development is on the same timetable as Rayzor Ranch and work is expected to resume within 60 days.

“The project is not dead,” Ames said, referring to both.

Early reports detailed plans to build a total of 2 million square feet of retail space north and south of U.S. 380, a multi-storied hotel, an office complex, a medical hub and multiple types of residential space, from brownstones to town homes and apartments for seniors. Plans for a museum high atop the center of the hill have been under way for months as Greater Denton Arts Council officials gather funds and sponsors for a Texas art museum to create a prominent Southwestern arts presence.

Recent contraction in the retail market, as talk of an economic recession looms, is one reason behind the project’s delay, Ames said.

“All retail has pulled in a little because of the economy,” he said. “That’s the reason it’s been backed up to 2010.”

Holcombe says the project still draws a lot of interest among retailers that are looking to grab a part of the Denton market.

Some retailers are concerned about cannibalizing existing stores, but Denton is considered a unique market, he said.

“We have a trade area that isn’t cannibalizing existing stores for the upper-end market,” he said.

Concerned residents

Pytleski went online to find out why there has not been any construction on Rayzor Ranch. His concerns grew as rumors swirled around town about the project’s status.

Pytleski said he moved to Krum in 2005 because he liked the city’s hometown atmosphere and its proximity to Denton and its retail offerings.

Krum’s growth has helped builders in the area, and Rayzor Ranch is a part of it, he said.

Still, Pytleski is worried about his home’s property value. With other builders selling homes quickly, he considered putting his house on the market but is now hesitant about what would happen without the convenience of more retail.

John Pohly, another Krum resident and a Keller Williams real estate agent, has also seen the impact on the housing market as more people move into the area, especially north of U.S. 380.

“The city of Krum is looking forward to the retail aspect of Rayzor Ranch because of all the dollars, the demand for housing,” he said. “If we can get our Wal-Marts and Sam’s, the residents would just love it. They would have to travel less for shopping and groceries.”

When it is finished, Rayzor Ranch Town Center and Rayzor Ranch Marketplace could have a big impact on the community, he said.

“I know it is going to happen,” Pohly said. “I can’t say when.”

DAWN COBB can be reached at 940-566-6879. Her e-mail address is dcobb@dentonrc.com. KARINA RAMÍREZ can be reached at 940-566-6878. Her e-mail address is kramirez@dentonrc.com.