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One of the most suburban sights in the center of downtown Dallas, yet a fixture there for decades, is at risk of extinction.
A permit allowing the McDonald's at 1000 Commerce St. to operate a drive-thru expired Dec. 8. The fast food restaurant sits just a few blocks away from the city's tallest tower in a largely underdeveloped area of downtown that city leaders and developers hope to transform into a walkable, urban corridor — especially with the soon-to-be-redeveloped Kay Bailey Hutchison Convention Center a short walk away.
The permit's expiration threatens the rare breed of McDonald's locations in the downtowns of Texas' major urban centers. Neither Austin nor Houston have a downtown McDonald's. Downtown San Antonio has one, but in a historic building near the Alamo and the River Walk tourist attractions; there's no drive-thru.
While on the surface this seems like a debate over a single McDonald's, it speaks to a deeper reckoning about the future of downtown Dallas. Social media commenters dream of a less car-centric Central Business District. But these Golden Arches have also fed countless North Texans at an affordable price, including nearby residents and workers who might stop by more than they would care to admit. It's a battle of two competing visions of downtown: one of urban walkability, another of suburban convenience.
"Now that we have these beautiful parks and we're building dynamic districts throughout downtown and really trying to weave them together, we are looking at what's now holding us back," said Jennifer Scripps, president and CEO of Downtown Dallas Inc. "You know, a bunch of cars lined up is not ideal toward our goals, but that being said, there are a lot of people who use that."
The special-use permit is required as drive-thrus are generally not allowed in downtown Dallas under zoning rules. McDonald's Corp. submitted an application requesting renewal of the permit Dec. 7.
Despite the expiration, the permit remains active while the application is under review by city staff, according to a city spokesperson. The question of whether to renew the permit will go before the City Plan Commission and Dallas City Council, although dates have not been set.
The presence of a McDonald's on the site likely dates back to 1979. The restaurant replaced the demolished turn-of-the-century Dorsey Building after it was demolished that year, according to a quote in an archived New York Times story about the closure of the Baker Hotel.
The drive-thru permit was originally issued when the restaurant was remodeled around 2000 with an option for automatic renewal every 10 years, though that process still required the property owner to file an application. In 2021, McDonald's did not file on time, so the permit expired.
That brought the permit back to the planning commission and city council for public meetings, where city leaders were apprehensive about giving the drive-thru a green light for another decade. City Plan Commissioner Melissa Kingston — who represents District 14, where the McDonald's is located — pushed to renew the permit but for it to expire after two years with no auto-renewal. That was passed by city council.
Jimmy Lopez, development officer for McDonalds Corp., told the planning commission in 2021 that the company submitted its renewal application late after city staffers sent notice to an engineer that hadn’t worked for the fast food company in 10 years and to a former employee. Complicating matters, the McDonald's offices were shut down for about a year and half because of the pandemic.
The company eventually received the renewal notice but the permit had already expired. But multiple commissioners at the time said the corporation should have been able to keep track of the permit renewal, rather than relying on the city’s notice.
Paul Ridley, city council member for District 14, echoed many of Kingston's concerns.
“I think it's a very rare occasion when we should be granting 10-year [special-use permits] for drive-ins; that is not customary, particularly in such an urban location," Ridley said in a 2021 council meeting. "I have concerns that, since this is not a profitable location, that it will deteriorate over time and not be reinvested in, and so this will give us an opportunity to monitor the operations after two years."
Attempts to reach Ridley for this story were unsuccessful.
Ridley's comment about the restaurant's profitability came after Lopez said that following the pandemic , the store had been operating in the red and was not very profitable. The company invested more than $1 million remodeling the store in late 2019, according to Lopez.
“We still want to be in the downtown, city of Dallas area servicing our customers, no matter how difficult the area is," Lopez said at the time. "We’ll continue to reinvest.”
The location is operated by franchisee McKaren McDonald's LP. As of 2021, 64 employees worked in the restaurant, McKaren Director of Operations Rob Hernandez told city council at the time.
“If we were to lose the drive-thru, we would lose more than half of these people," Hernandez said. "It would be a significant loss in sales and a significant loss to the customer base that’s around the location.”
Permit pushback
Kingston expects the case to come before the commission sometime this year. That would be followed by a city council vote. When asked by Dallas Business Journal whether she would support renewing the special-use permit, Kingston said, “absolutely not.”
“I very rarely do auto-renewals, especially for something like this, because I think the auto-renewal deprives the community and the city of the opportunity to revisit a use,” she said.
Kingston said downtown has changed drastically in the two decades since the auto-renewal was granted and that potential developments around the property and increased downtown living will necessitate more pedestrian-friendly amenities. She said residents living downtown want to walk their dogs and ride bikes and scooters, but that those things are harder to do with a stream of cars onto and off of the streets.
“Look, if you're going to have a vibrant downtown, it cannot be littered with drive-thrus; it’s got to be walkable,” Kingston said.
The commissioner said she wanted to prioritize the people and businesses that call downtown home, rather than people who work downtown and grab dinner on their way home to somewhere else.
“A drive-thru use, particularly one like this that’s heavily dependent on drive-thru, is not a good mix with a park across the street and a lot of pedestrians," she said. "I gave them two years so that they had plenty of time to reconfigure their business or reimagine their business as something that didn't require the drive-thru component, and they haven't done that.”
Franchisee urges support of McDonald's drive-thru
The franchisee, McKaren McDonald's, tried to drum up support for the drive-thru at the start of 2024.
In January, an image of a sign hanging on the door of the restaurant gained traction on Reddit and other social media platforms. On the sign, which is no longer on the door, the franchisee said the drive-thru was being "forced to close" by city council and the planning commission.
The sign urged guests to scan a QR code, which would open their email application with a pre-written email to Mayor Eric Johnson and other council members, requesting they renew the permit and claiming that the vision of a walkable downtown extolled by Ridley and Kingston did not extend to the McDonald's location.
The email also claimed the franchisee proposed adding multiple pickup options, including a walk-up window, but that those were "denied."
Craig York, owner and operator of McKaren McDonald's, referred questions to McDonald's Corp., which owns the land and has been handling the zoning case alongside a contractor. McDonald's Corp. did not respond to a request for comment.
Kingston said that the majority of communication she's received as a result of the campaign actually opposed the drive-thru: "Whatever they were hoping to generate with that, it had the opposite effect."
Big real estate investors dominate area
The land the McDonald's sits on is worth five times the building itself, according to Dallas Central Appraisal District, which estimates the land value alone at $1.7 million.
Some prominent landowners control parcels surrounding the McDonald's. Metropolis Investment Holdings — owner of Dallas' tallest skyscraper, Bank of America Plaza — owns the entire block southeast of the intersection of Lamar and Commerce streets, except for the McDonald's. Metropolis also owns the entire block north of the McDonald's and south of its skyscraper.
Just west of the McDonald's and Metropolis' lots is the downtown Greyhound bus station, which is set to shut down when its lease expires in October, according to the Dallas Morning News. An entity sharing an address with Connecticut-based investment firm Twenty Lake Capital LLC acquired the station in late 2022, according to Dallas County records.
And directly south of the McDonald's, Ray Washburne's Charter Holdings owns Founders Square, a 1914 office property renovated in 2015.
Dustin Bullard, director of urban strategies for Charter Holdings, said the firm does not believe drive-thrus should be allowed in an urban environment because they contribute too much traffic to the street and encourage people to drive downtown and quickly leave.
"[Special-use permits] should be granted for community benefits, things that are accretive to neighborhoods; we just do not believe that’s the case today," Bullard said in an interview. "If we're inviting all of these people into downtown Dallas to visit and have fun, they need to be experiencing a walkable, urban environment. Not, you know, a kind of suburban, vehicular use."
Bullard added that the firm also wants to see the adjacent Greyhound station acquired by a new owner, whether it be Charter Holdings or someone else, for a redevelopment that would preserve the existing building in some way.
"That changes that area," Bullard said. "You have two high-intensity vehicular uses today."
Imagining downtown without a drive-thru
Downtown is on the precipice of major change. The nearly $3 billion plan to redo the convention center could boost other parts of downtown like the West End, Main Street and the AT&T Discovery District, Scripps said.
"We are keenly interested in a lot of the neighboring opportunities that the McDonald's is now kind of ground zero for," she said. "Every one of the vision statements that we have put out about the convention center includes this really unique, dynamic, seven-day-a-week neighborhood that enchants and entices visitors and conventioneers as well as locals who want to be in that part of downtown."
She said the organization would be interested in McDonald’s adopting different service approaches, as Chick-Fil-A did downtown with its new location on Elm Street in The National, which caters to downtown office workers without a drive-thru.
Perhaps the restaurant chain will rethink the car-centered restaurant. In 2021, District 15 Commissioner Brent Rubin noted that McDonald's is no stranger to operating in walkable, big-city environments.
"You can go to New York City and see McDonald's stitched into their urban fabric," Rubin said at the time. "I know they have the capability, if they want to continue operating here, to do it in a way that is congruent with where downtown is heading."
