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CC June 12, 2024

District: 2

District: 6

District: 4

The Dallas City Council has approved a $1,854,995 Chapter 380 economic development grant for the Power & Light mixed-income project. The development, a Public Facility Corporation (PFC) deal, will bring 310 affordable units and vital wastewater infrastructure to the Cedars neighborhood. The grant will be funded by $6,902 from the TOD bond fund and $1,848,093 from the Economic Development/Housing bond fund.

District 2 Council Member Jesse Moreno backed the project, citing its potential to preserve the historic Power & Light building and spur neighborhood growth. He emphasized that the developer-funded sewer line benefits 300 other parcels in the growing Cedars neighborhood.

The PFC structure drew fire from critics like Council Member Cara Mendelsohn. The District 12 Council Member criticized granting $1.8 million for the project's sewer lines in addition to the tax exemption, calling it a “very careless way” for the City to spend its tax dollars. Mendelsohn pressed the Chief Financial Officer to confirm the PFC tax exemption means the property will not pay taxes into the General Fund for 75 years, even though the City will still provide services to that address.

Mendelsohn expressed concern that the City has not rejected a single PFC deal and the public does not understand the implications of these approvals. Deputy Mayor Pro Tem Carolyn King Arnold, District 4, called for more financial data on the impact of PFCs. The need for more economic data on PFCs was a sentiment shared by both sides of the argument.

Council Member Gay Donnell Willis, District 13, spoke to the bigger picture, noting the tens of millions of dollars the City spends on homelessness services. She urged a comprehensive look at costs and benefits.

The deal's financials are complex. The total project cost rose from $80.6M to $83.6M due to off-site infrastructure requirements. The $1.85M grant will partially cover the $3M in off-site infrastructure costs. Dallas Water Utilities will chip in on the hard construction costs per Chapter 49 of the City Code.

The affordable housing breakdown includes a minimum of 40% of units at 80% AMI and a minimum of 10% at 60% AMI. The project is slated to begin construction in December 2025 and be completed by December 2028.

For developers, the Power & Light deal could be transformative. The 3,000-foot wastewater expansion, ranging from 10" to 21" lines, will open up capacity across 56 acres and 317 parcels. This could accelerate future multifamily development in the Cedars.

What it is

PFC + $10 Million in Community Development Block Grant (CDBG) funds

The Park at Northpoint PFC is a $121.9 million mixed-income housing development in Dallas that will turn a 15-acre site with a vacant office building into affordable housing. The project will be 426 units with 186 one-bedrooms, 198 two-bedrooms, and 42 three-bedroom apartments. 51% of the units will be reserved for residents earning between 50-80% of the Area Median Income (AMI). The development is funded by a $10 million Community Development Block Grant (CDBG) and other sources. The Dallas Public Facility Corporation (DPFC) will own the property and lease it to the developer for 75 years.

Why it’s here

The project is being reviewed again because the developer requested changes due to increased costs and loan rates. The revised proposal consists of a single phase of 426 units, reduced from the original plan, and a change to 3-story buildings. To gain City approval, the developer has agreed to additional considerations.

The project required City Council approval for DPFC participation and property tax exemption.

Reactions and Implications

Council Member Omar Narvaez advocated for the project, emphasizing the critical need for affordable and workforce housing in Northwest Dallas. Narvaez also highlighted the urgency of moving forward amidst ownership uncertainties with the developer stuck in limbo.

On the other hand, Council Member Cara Mendelsohn raised concerns about the property's valuation and the substantial decrease from the previous year. Mendelsohn questioned the financial details and the City's valuation including the existing building, which is planned to be demolished.

The development will forego $178.2 million in City property taxes over 75 years. In exchange, The Park at Northpoint will provide much-needed affordable and workforce housing, with an estimated $147 million in rent savings for residents over 75 years. The project is projected to generate $102.9 million in revenue for the DPFC to fund future affordable housing initiatives.

What it is

4% Low-Income Housing Tax Credit (LIHTC)

The Legacy on Kiest is a proposed $56.5 million, 180-unit affordable housing development seeking 4% LIHTC financing. 100% of the units will be reserved for households earning 0-60% Area Median Income (AMI). 33% of the units will be 3 bedrooms.

Why it’s here

To enable the project to proceed, the City Council needed to approve a Resolution of No Objection for the TDHCA application because of this project’s less than one-mile proximity to another recent LIHTC deal (Skyline at Cedar Crest from Brompton CHDO).

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