PILLAR: Vibrant
AGENDA DATE: June 24, 2026
COUNCIL DISTRICT(S): 7
DEPARTMENT: Office of Housing and Community Empowerment
PRIORITY: N/A
______________________________________________________________________
SUBJECT
Title
Authorize the Dallas Public Facility Corporation to (1) acquire, develop, and own Apperson, a mixed-income, multifamily development that will span four parcels located at 1431 Apple Street, 1500 Caddo Street, 1526 Caddo Street, and 3910 San Jacinto Street, Dallas Texas 75204 (the “Project”); and (2) enter into a seventy-five-year lease agreement with Slate Properties, LLC and/or its affiliate(s), for the development of the Project - Estimated Revenue Foregone: General Fund $5,616,793.05 (for 60 years; see Fiscal Information)
*In alignment with Dallas Housing Resource Catalog.
Body
BACKGROUND
The City of Dallas (City) is authorized by the Public Facility Corporation Act, Chapter 303 of the Texas Local Government Code, as amended (the Act) to create a Public Facility Corporation for the purposes established in the Act, including the financing, acquisition, construction, and leasing of public facilities under the Act. On June 24, 2020, by Resolution No. 20-1035, the City Council authorized the creation of the Dallas Public Facility Corporation (“DPFC” or “Corporation”) pursuant to the Act to further the public purposes stated in the Corporation’s Articles of Incorporation and Bylaws, which were subsequently amended by Resolution No. 22-1194 (“Bylaws”). Section 6.2 of the Corporation’s Bylaws requires City Council approval by written resolution prior to entering into any agreement that would result in a property tax exemption. Per Section 7.3 of the Bylaws, any public facility related to multifamily residential development of the Corporation shall not proceed unless (1) the development of the public facility could not be feasible but for the Corporation’s participation, and (2) the development of the public facility is in furtherance of the City of Dallas’ Comprehensive Housing Policy which has been replaced by the Dallas Housing Resource Catalog (DHRC), as amended.
On April 12, 2023, by Resolution No. 23-0444, the City Council adopted the DHRC, which contains the approved city-supported housing programs, corporations, funding, and compliance tools, used to develop and maintain mixed-income housing through the Office of Housing and Community Empowerment (OHCE). On April 22, 2026, the City Council authorized an amendment to the DHRC and the Corporation’s program statement, to establish a clearer and more consistent process for reviewing projects that seek City support by Resolution No. 26-0742. Additionally, the amendment requires the Corporation to prioritize new construction of mixed-income housing in areas with poverty rates greater than 20%, areas with higher-than-average appraised values of real estate as compared to the city-wide values, or in designated high-opportunity areas with poverty rates below 20%.
The Project advances this priority because it involves developing new housing units in a high-opportunity area in Council District 14. The Project is located in census tract 16.02 which has a 2.7% poverty rate. As discussed below, the fair housing rating for the Project is low positive.
Slate Properties, LLC (“Applicant”), a Texas limited liability company, submitted an application to the Corporation for the development of Apperson, a 251-unit mixed income multifamily development that will span four parcels located at 1431 Apple Street, 1500 Caddo Street, 1526 Caddo Street, and 3910 San Jacinto Street, Dallas, TX 75204 (the “Project”). The Project is not located within any Tax Increment Financing (“TIF”) District or Public Improvement District (“PID”). The development is a new construction project, and the Corporation will own the site and improvements and lease the Project back to the Applicant or its affiliate. Pursuant to the Act, any public facility owned by a public facility corporation is exempt from all ad valorem taxes. To qualify as a public facility pursuant to the Act, a multifamily property must reserve at least 40% of the units for residents earning at or below 80% of the Area Median Income (AMI) and at least 10% of the units for residents earning at or below 60% of the AMI. The Project will reserve 10% of the units for residents earning at or below 60% AMI, 40% of the units for residents earning at or below 80% AMI, and the remaining units will be at a fair market rate.
On April 28, 2026, the DPFC Board of Directors adopted a resolution authorizing the negotiation and execution of a term sheet for the Project in partnership with Slate Properties, LLC. This Applicant is Texas-based with real estate development experience. Slate Properties, LLC has developed over 5,000 Class A multifamily units, totaling more than $600 million in asset value.
The Project will span four parcels located at 1431 Apple Street, 1500 Caddo Street, 1526 Caddo Street, and 3910 San Jacinto Street, encompassing approximately 2.1 acres. These sites consist of previously vacant lots and buildings that the Applicant acquired between 2022 and 2025. Once closed, the Applicant will be required to secure the property no more than 60 days after closing and provide security until completion of the project. Amenities will include a pool, fitness center, co-working space clubhouse, and accessibility to Dallas Area Rapid Transit bus stops. The Project is located in an area zoned for multifamily development without any opposition. The Applicant will work with the Office of Emergency Management and Crisis Response throughout the planning and design process for security input, community activities, and to incorporate best practices of Crime Prevention through Environmental Design.
The anticipated unit mix and rental rates are as follows:
|
Unit Type |
AMI |
Units |
Rent |
|
Efficiency |
60% |
5 |
$1,231.00 |
|
Efficiency |
80% |
18 |
$1,451.00 |
|
Efficiency |
Market |
20 |
$1,520.00 |
|
1BR |
60% |
18 |
$1,407.00 |
|
1BR |
80% |
70 |
$1,831.00 |
|
1BR |
Market |
85 |
$1,965.00 |
|
2BR |
60% |
4 |
$1,584.00 |
|
2BR |
80% |
14 |
$2,112.00 |
|
2BR |
Market |
17 |
$2,915.00 |
Reserving units for individuals and families earning between 60% and 80% AMI provides affordable housing for households that earn above the low-income housing tax credit income limit of 60% AMI but would be cost-burdened by market rents. Household incomes between 60% and 80% of AMI range from approximately $49,320.00 to $65,700.00 for an Individual and increase with family size and reflect average incomes across a variety of employment sectors, such as teachers, first responders, government employees, and health care providers.
Total development costs are anticipated to be approximately $50,922,450.00 which includes the acquisition price for the land. The development budget less soft/financial costs is anticipated to be approximately $43,005,107.00 which is $171,335.09 per unit.
The proposed financing sources and uses are as follows:
|
Proposed Financing Sources |
Amount |
|
Mortgage Loan |
$ 35,645,715.00 |
|
Developer/Investor Equity |
$ 15,276,735.00 |
|
Total |
$ 50,922,450.00 |
|
Proposed Uses |
Amount |
|
Development Costs |
$ 32,774,200.00 |
|
Land Acquisition |
$ 7,550,000.00 |
|
Soft Costs/Other Costs |
$ 7,917,343.00 |
|
Contingency |
$ 2,680,907.00 |
|
Total |
$ 50,922,450.00 |
The City staff reviewed the Project for alignment with the DHRC and confirmed the following:
|
Development/Area Characteristics |
Result |
|
Census Tract Poverty Rate |
2.7% |
|
Designated High Opportunity Area |
Yes |
|
Appraisal Values Higher than City-wide Values |
No |
|
Construction Type |
New Construction |
The Fair Housing rating for the Project is low positive. The City uses the Fair Housing Review Worksheet to assess projects based on measurable factors, including poverty levels, opportunity indicators, income mix, accessibility standards issued under the Americans with Disabilities Act, anti-displacement efforts, resident services, and outreach. Each project receives an overall impact rating, with ratings ranging from high positive to high negative, based on whether the project advances fair housing goals. To receive City support, a project must earn a neutral or positive rating, demonstrating that it promotes fair housing and inclusive, stable communities.
The Project will be owned by the DPFC and leased to the Applicant and other potential owners for a period of 75 years. In consideration for the DPFC’s participation in the Project, the DPFC is estimated to receive $105,604,003.00 in revenues and rental savings over 60 years of the lease which includes $30,956,007.00 in fee payments to the DPFC and $74,647,996.00 solely attributable to rent savings directly to residents. Potential proceeds to the DPFC include (1) a $300,000.00 structuring fee paid at closing; (2) lease payments starting at $200,000.00 and increasing by 3% annually upon stabilization; (3) 15% of net sale proceeds upon first capital event of the Project; and (4) 2% of gross profits on all future capital events. In the event of a sale during the life of the Project, DPFC will continue to receive the annual lease payments. Upon completion of the lease, DPFC will own the Project free and clear.
DPFC revenues will support DPFC operations and be reinvested in attainable housing. The Project results in foregone City tax revenue while the DPFC owns the asset. The current tax bill is $34,447.57, with a 60-year estimate of $5,616,793.05 in foregone taxes. However, the workforce housing rental savings of $74,647,996.00 over 60 years and the estimated $30,956,007.00 in Project revenues provide the City with $105,604,003.00 in benefits that outweigh the foregone revenue.
The DPFC’s estimated revenues were calculated by DPFC’s partnership counsel and financial advisors. Market rent comps and current construction costs were analyzed to ensure the project costs are reasonable for the market. DPFC financial advisors have also confirmed that, but for the ad valorem tax exemption, the Project would not be economically feasible. Also, the DPFC’s revenue consideration and affordability levels have been analyzed to confirm that the ad valorem tax exemption does not over-subsidize the Project.
The DPFC Board, legal counsel, and financial advisors have confirmed that this Project would not be feasible but for the DPFC’s participation and that the Project furthers the goals of the DHRC. The DPFC Board recommends approval of this item to allow this mixed-income housing development to move forward.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On April 28, 2026, the Dallas Public Facility Corporation Board of Directors approved the negotiation and execution of a term sheet with the Applicant.
The Housing and Homelessness Solutions Committee was briefed by memorandum regarding this matter on May 26, 2026. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=15501101&GUID=F6C62FC7-03C8-45F7-81BB-AF6DFF52F1C8>
FISCAL INFORMATION
The following is an estimate of the tax revenue the City of Dallas (COD) is projected to forgo. These projections are based on the current taxable value of the property and the anticipated value if the Project were possible to be built as a market-rate project. Please note that the amount of estimated taxes foregone is a speculative number and not a representation of actual taxes currently due to the City. For DPFC projects, the values are calculated by DPFC’s underwriter at this time.
|
Taxing Entity |
Actual Taxes |
Estimated Taxes Foregone |
|
|
Current Year |
Year 15 |
Year 60 |
Year 15 |
Year 60 |
|
COD |
$34,447.56 |
$640,687.20 |
$5,616,793.05 |
$4,697,966.28 |
$45,820,827.44 |
|
Dallas ISD |
$48,991.39 |
$911,186.64 |
$7,988,214.51 |
$6,681,458.60 |
$65,166,487.58 |
|
Dallas County |
$10,623.14 |
$197,578.87 |
$1,732,139.49 |
$1,448,786.17 |
$14,130,493.24 |
|
Dallas College |
$ 5,253.65 |
$ 97,712.18 |
$ 856,625.69 |
$ 716,493.63 |
$ 6,988,200.54 |
|
Parkland Hospital |
$10,450.60 |
$194,369.81 |
$1,704,006.25 |
$1,425,255.87 |
$13,900,994.41 |
MAP
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