STRATEGIC PRIORITY: Growing
AGENDA DATE: June 25, 2025
COUNCIL DISTRICT(S): 3
DEPARTMENT: Department of Housing and Community Development
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
Authorize the City Manager to negotiate and execute a development loan agreement and security documents with 3606 S Cockrell Hill Rd, Ltd., an affiliate of Palladium USA International, Inc. (Applicant) conditioned upon the Applicant, or the entity named receiving 2024 9% Housing Tax Credit award and other funding source subject to approval of the City for the development of 3606 Cockrell Hill Road Senior Living, a 120-unit multifamily senior housing complex located at 3606 and 3626 South Cockrell Hill Road, Dallas, Texas 75236 (Project) - Not to exceed $5,000,000.00 - Financing: HOME Investment Partnerships Program Funds
Body
BACKGROUND
Palladium USA International, Inc. submitted a proposal under the City’s Notice of Funding Availability (NOFA), as amended, to receive gap financing in the form of a cash flow loan to support the construction of a 120-unit multifamily senior housing complex known as 3606 Cockrell Hill Road Senior Living. The NOFA was issued by the Department of Housing and Community Development (Housing) in accordance with the City’s Dallas Housing Policy 2033 (DHP33) and Dallas Housing Resource Catalog (DHRC).
Housing administers programs to appropriately incentivize private investment for the development of quality, sustainable housing that is affordable to the residents of the City. Specifically, Housing administers the New Construction and Substantial Rehabilitation Program, which where necessary, seeks to provide financial assistance to new developments or substantial rehabilitation of existing developments. All projects seeking financial assistance are required to submit a Notice of Intent to apply for financial assistance through NOFA to develop affordable homeownership and rental housing. As outlined in the NOFA, multiple sources of funding are available. However, proposed projects must meet specific thresholds to qualify for the use of a specific funding source.
The NOFA scorecard criteria for multi-family rental development include the following:
|
Scoring Criteria |
Maximum Points |
Awarded Points |
|
Project Attributes |
21 |
16 |
|
Equity & City Initiatives |
40 |
25 |
|
Readiness |
53 |
53 |
|
Developer Experience and Capacity |
27 |
27 |
|
Bonus Points |
28 |
0 |
|
Penalty for Nonperforming Previously Funded Projects |
-10 |
0 |
|
Total |
169 |
121 |
The Applicant received a fundable score of 121 of 169 points.
Housing proposes to authorize the NOFA funding request totaling $5,000,000.00 comprised of HOME Investment Partnerships Program Funds for acquisition costs and hard construction (e.g., vertical construction such as framing, roofing, carpentry, etc.) and other soft costs as allowed by federal regulations and the DHRC.
The Applicant is a Texas-based developer dedicated to identifying high-quality urban infill development and redevelopment opportunities within its target markets. The firm specializes in value-added and complex transactions that often present significant barriers to entry. Palladium USA International, Inc.’s experienced team is proficient in managing projects of large scale, guiding them through all phases, including conceptual selection, site planning, design, cost estimation, construction, lease-up, management, and unit sales.
The Applicant proposes to develop 120 multi-family senior housing units on over five acres. The 120 units are comprised of 68 one-bedroom, and 52 two-bedroom units. The project will include common area amenities, such as on-site leasing center, fitness center, resort-style pool with gazebo, clubhouse with community room, business center, and high-speed Wi-Fi. Unit amenities will include energy efficient appliances, LED lighting, dishwasher, natural stone or quartz countertops, wood style flooring, designer fixtures, and covered balcony with storage units.
Additionally, the Applicant will provide modern security features to include a camera system and controlled access in accordance with the NOFA criteria and the Office of Emergency Management and Crisis Response recommendations to ensure a safe living environment for all residents and staff. The project also features targeted resident services including financial literacy classes, monthly calendar of events, exercise classes, senior volunteer programs, and market food pantry access.
The proposed development is located in the established Kiest Cliff Neighborhood at the center of multiple high frequency DART stops, and 2.5 miles from the Westmoreland Rail Station. The site is within one mile of two full-scale grocery stores, a pharmacy, and multiple parks.
The unit mix and rental rates are as follows:
|
Unit Type |
AMI |
Units |
Rent |
|
1BR |
30% |
12 |
$ 621.00 |
|
1BR |
50% |
33 |
$1,035.00 |
|
1BR |
60% |
7 |
$1,242.00 |
|
1BR |
70% |
2 |
$1,441.00 |
|
1BR |
80% |
2 |
$1,441.00 |
|
1BR |
Market |
12 |
$1,374.00 |
|
2BR |
30% |
6 |
$ 744.00 |
|
2BR |
50% |
3 |
$1,241.00 |
|
2BR |
60% |
18 |
$1,489.00 |
|
2BR |
70% |
1 |
$1,737.00 |
|
2BR |
80% |
4 |
$1,759.00 |
|
2BR |
Market |
20 |
$1,670.00 |
Total development costs are anticipated to be approximately $34,927,425.00 which includes the acquisition price for the land. The hard cost construction budget is anticipated to be $22,663,015.00 which is $188,858.46 per unit.
The anticipated financing sources and uses are as follows:
|
Financing Sources |
Amount |
|
HUD 221(d)(4) |
$ 10,482,700.00 |
|
Tax Credit Equity |
$ 3,180,278.00 |
|
Developer Fee + GP Equity |
$ 2,538,685.00 |
|
City of Dallas HOME Loan |
$ 5,000,000.00 |
|
City of Dallas 2024 Tax Credit Line of Credit |
$ 500.00 |
|
Bridge Loan Equity |
$ 13,725,262.00 |
|
Total |
$ 34,927,425.00 |
|
Proposed Uses |
Costs |
|
Acquisition |
$ 2,884,000.00 |
|
Hard Construction Costs |
$ 22,663,015.00 |
|
Financing Fees, Soft Costs |
$ 1,569,196.00 |
|
Developer Fee |
$ 3,831,226.00 |
|
Reserves |
$ 3,979,988.00 |
|
Total |
$ 34,927,425.00 |
After the development is complete, 18 of the 120 units to be made available to households earning 0.00% - 30.00% Area Median lncome (AMI), 36 of the 120 units to households earning 31.00% - 50.00% AMI, 25 of the 120 units to households earning 51.00% - 60.00% AMI, 3 of the 120 units to households earning 61.00% - 70.00% AMI, six of the 120 units to households earning 71.00% - 80.00% AMI, and 32 units will be non-income-restricted market rate units. As requirement of the HOME funding, the Applicant must provide 24 HOME-assisted units consisting of 19 High HOME and 5 Low HOME units. The affordable and HOME-assisted units must remain affordable for a minimum of twenty years, per federal and DHP33 requirements.
The development is currently under review by the Office of Equity and Inclusion Fair Housing Division. Staff recommends approval of this item as it furthers the mixed-income housing goals of the DHP33 and Housing Action Plan by creating more rental housing for those making 50% AMI or below, meets the threshold requirements of the NOFA, and confirmation of the financial gap by third-party underwriting.
Staff confirmed that this Project would not be feasible but for the City’s participation and that the Project furthers the goals of the DHP33. Staff recommends approval of this item to allow this mixed-income housing development to move forward.
ESTIMATED SCHEDULE OF PROJECT
Begin Construction October 2025
Complete Construction October 2026
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Housing and Homelessness Solutions Committee (HHSC) was briefed on the development and the authorization of a Resolution of Support on January 22, 2024. The HHSC approved moving forward to Council for consideration.
On February 14, 2024, the City Council held a public hearing and following the hearing, adopted a Resolution of Support related to the Development and Developer’s 9% Competitive Low Income Housing Tax Credits application to TDHCA by Resolution No. 24-0253.
The Housing and Homelessness Solutions Committee was briefed by memorandum regarding this matter on May 27, 2025. <https://dallascityhall.com/government/citymanager/Documents/Council%20Materials/Upcoming%20Agenda%20Item%20-%203606CockrellHill.pdf>
FISCAL INFORMATION
|
Fund |
FY 2025 |
FY 2026 |
Future Years |
|
HOME Investment Partnerships Program Funds |
$5,000,000.00 |
$0.00 |
$0.00 |
M/WBE INFORMATION
In accordance with the City’s Business Inclusion and Development Policy adopted on September 23, 2020, by Resolution No. 20-1430, as amended, the M/WBE participation on this contract is as follows:
|
Contract Amount |
Procurement Category |
M/WBE Goal |
|
$22,663,015.00 |
Construction |
32.00% |
|
M/WBE Subcontracting % |
M/WBE Overall % |
M/WBE Overall Participation $ |
|
32.00% |
32.00% |
$7,252,164.80 |
|
• This contract meets the M/WBE goal. |
|
• Palladium USA International, Inc. |
OWNER/EXECUTIVE
Palladium USA International, Inc.
Kim Parker, Executive Director
MAP
Attached