The City of Dallas needs cash to fund a $3 billion deficit in its police and fire pension fund, and it needs advice on how to repurpose some old city buildings and whether it should be buying and selling land — so they asked the Economic Development Corporation for help.
The issue of city-owned real estate came up during the budget process when District 1 Councilman Chad West, who chairs the Government Performance and Financial Management Committee, inquired about city assets. Most didn’t know at the time that Dallas owns about 50,000 acres.
“We have a lot of expenses in the future that we’re going to need to pay for, like the [police and fire pension],” West said. “We talked to city management and city staff multiple times about how we can leverage in the best way possible our city real estate to do that. We also have a desperate need for housing, parks, and green space.”
The key going forward, West said, is determining what the assets are and what needs to be purchased.
So they brought in the big guns from the EDC.
Economic Development Corporation Will Review City’s Real Estate Portfolio
The Dallas real estate office is a division of Public Works. It currently operates in a “reactionary” fashion rather than pursuing transactions. The GPFM identified a need for a more strategic plan, West said.
EDC board president John Stephens said the corporation, which is hiring its first-ever CEO, is already reviewing the city’s “book of real estate.”
“At the EDC, our first challenge is really to market activities for the City of Dallas and to encourage investment and attract and grow business,” Stephens said. “One of the conversations we’ve had with the city manager is to look at the real estate the city has and to collaboratively do a review and provide information on whether it provides opportunities for economic development or any other goals the city manager might have. We are actively doing that but we are just getting started.”
In response to a question in an Oct. 23 GPFM meeting about how the EDC would evaluate land for potential housing opportunities, Stephens said, “We’re not there yet, and quite frankly, I don’t know that we will go there.”
“What we will do is the evaluation of land, the buildings, and so forth, and come up with understandings of value and alternative uses,” he said. “We’ll present those to the city manager and the council with the intention that we are all inclusive of considerations that the city has for all its goals.”
District 5 Councilman Jaime Resendez said he’d like to ensure that the city has “eyes on the housing aspect and the greenspace aspect.’
“Those two things impact economic development,” he said. “If there’s any way to make the analysis a little bit more broad, that would be great.”
He added that it’s also important to look for land the city could acquire.
Stephens, who attended the GPFM meeting with former Dallas City Councilman and EDC board member Alan Walne, said they expect to start making recommendations to city officials in the first quarter of 2024.
Highest And Best Use For City-Owned Real Estate
Assistant City Manager Robert Perez said Dallas department directors are required annually to review the assets under their purview and determine whether those buildings are needed for a future project or could be deemed surplus.
“This year we’re actually going to take a step further and look not just at our land but at our facilities,” he said. “If we know of any office space that is not currently being utilized, we want to activate that. We’ll be looking at all that and developing a master plan on how we’re going to utilize our facilities.”
Employees at Oak Cliff Municipal Center are currently transitioning to a space on Stemmons Freeway, Perez said. Additionally, employees who work at Hensley Field will be relocated once that project is developed.
Chief Financial Officer Jack Ireland confirmed that the city’s real estate portfolio has come up in discussions about how to close the gap on a $3 billion deficit in the police and fire pension.
District 9 Councilwoman Paula Blackmon said she’d like the EDC board to look into the highest and best use for city-owned property.
“We’re going to need some cash,” she said. “I think everything should be analyzed. If the result is, ‘Not this, not now,’ that’s fine, too, but to say, ‘We have to take this off [the list]’ is probably not a good practice. We need to maximize either the lease agreements or selling, whatever we get the highest and best price for.”
District 12 Councilwoman Cara Mendelsohn pointed out that in recent years, it’s been up to the City Manager’s office to determine what happens to city buildings like OCMC that are no longer in use.
“Whose responsibility has it been to ensure that we’re actually monetizing or saving land as necessary, whether it’s for parks or economic development or something else?” she asked.
Perez said the city manager does that, too, based on recommendations from his staff.
District 2 Councilman Jesse Moreno said he’d like the Economic Development Corporation to consider doing a needs assessment.
“Some of these facilities are in disrepair and they are going to take substantial money to keep operating,” he said. “As we start looking at, do we refurbish these buildings, do we consolidate, do we move to an entirely new location, the bottom line is these conversations really excite me. I think it’s an opportunity for our city to grow and an opportunity for us to have more housing, more workforce, and more green space.”
