Cypress Creek at Forest Lane, a mixed-income apartment complex proposed most recently as a Public Facility Corporation project, is going before the Dallas City Council on Wednesday, but the PFC funding mechanism won’t work, city officials say.
The 189-unit project is being developed by Zach Krochtengel of Sycamore Strategies and was the subject of a contentious public meeting in March. A majority of District 10 residents at the meeting said they didn’t want the apartments at 11520 North Central Expressway.
The project was proposed previously in 2021 but failed to move forward because deed restrictions prevent the land from being developed as residential. Under the PFC structure, the developer could have leased the land from the council-appointed PFC board and it would be taken off the tax rolls for 75 years. That could circumvent the deed restrictions, but PFC board members said in a late March meeting they expected to get sued.
May 10 City Council Meeting
A memo issued April 28 by Assistant City Manager Majed Al-Ghafry states the following:
Majed Al-Ghafry
“The plan was presented for consideration and approval to the DPFC Board of Directors (Board) on March 28, 2023. The Board conditionally approved a memorandum of understanding (MOU) that outlined the City’s conveyance of the project site to the DPFC and the subsequent lease to the Developer. However, the conditional approval of the Board is tantamount to a denial because the conditions were unacceptable to the City and thus the project cannot move forward under the proposed structure.”
DALLAS ASSISTANT CITY MANAGER MAJED AL-GHAFRY
Alternate Recommendation
Al-Ghafry proposed an alternate approach in his memo, which the City Council is expected to vote on Wednesday.
The assistant city manager proposed that the City “enter into a ground lease directly with the Developer to finance, construct, and manage the development.”
“This alternative has no DPFC participation but will include a Developer obligation to indemnify the city for any potential litigation expenses and damages for the duration of the project ground lease term,” the memo states. “The City will require the standard performance and payment bond requirements for a transaction of this kind.”
Without the city’s participation in the acquisition and ground lease development structure, the mixed-income affordable housing development “will not move forward to serve the City’s affordable housing public purpose,” Al-Ghafry wrote.
City documents have been difficult to access since Dallas was the victim of a ransomware attack last week, but a resolution and other related documents on the Cypress Creek at Forest Lane project are posted here.
