STRATEGIC PRIORITY: Growing
AGENDA DATE: September 10, 2025
COUNCIL DISTRICT(S): 6
DEPARTMENT: Office of Economic Development
EXECUTIVE: Robin Bentley
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SUBJECT
Title
Authorize an amendment of the tax increment financing (“TIF”) development agreement (“Agreement”) to Resolution No. 20-1480, previously approved on September 23, 2020 between the City of Dallas (“City”) and Villas at WH 20, LP and its affiliate Villas Development Corporation (collectively, “Owner/Developer”) and the associated deed restrictions recorded on February 28, 2024 under Clerk’s File No. 202400040173 (“Deed Restrictions”) to subordinate the Deed Restrictions (in favor of the City) to Bellwether Enterprise Mortgage Investments, LLC (“Bellwether” or “Lender”) and Owner/Developer and amend the Agreement and Deed Restrictions to terminate the City’s recapture of the TIF Subsidy in the event of a default, and in consideration, extend the Affordability Period as defined in the Agreement and Deed Restrictions by an additional five years from fifteen years to twenty years, approved as to form by the City Attorney, to facilitate the permanent financing loan to be provided by Lender for the mixed-income apartment development commonly known as Mariposa at Western Heights, formerly known as the Villas at Western Heights (“Project”), addressed as 1641 North Windomere Avenue in Tax Increment Reinvestment Zone Number Fifteen (“Fort Worth Avenue TIF District”) – Financing: No cost consideration to the City
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BACKGROUND
On September 23, 2020, the City Council authorized the execution of a TIF development agreement, and all other necessary documents with Owner/Developer in an amount not to exceed $7,678,874.00, payable from current and future Fort Worth Avenue TIF District funds, in consideration of Owner/Developer’s development of the mixed-income apartment development commonly known as Mariposa at Western Heights, formerly known as the Villas at Western Heights, on property currently addressed at 1641 North Windomere Avenue in the Fort Worth Avenue TIF District by Resolution No. 20-1480.
Owner/Developer completed construction in late 2024, and the Project was placed into service. Of the units (104 units), 80% are income-restricted and set aside for senior households earning at/below 30%, 50%, and 60% Area Median Income (“AMI”), and twenty percent (20%) of the units are not income-restricted. As secured by the Deed Restrictions, the duration of the City’s Affordability Period is fifteen (15) years; however, the Low Income Housing Tax Credit (“LIHTC”) Land Use Restriction Agreement (“LURA”) between the Texas Department of Housing & Community Affairs (“TDHCA”) and Owner/Developer secures the affordability restrictions for forty-five (45) years if the Project is not recapitalized.
In April 2025, the City received a request from the Owner/Developer to subordinate the Deed Restrictions to a permanent financing loan between Owner/Developer and Bellwether, which is a delegated underwriting and servicing lender of Fannie Mae. The Owner/Developer is in the process of converting the Project’s construction financing to permanent financing, with Lender as the senior lender. As a condition of the loan, Lender requires that the Deed Restrictions in favor of the City be subordinated to Lender’s deed of trust. As written, the Agreement and Deed Restrictions do not contemplate this subordination but do allow for amendment, approved as to form by the City Attorney, with the approval of City Council.
Therefore, seeking to responsibly balance the City’s interest in protecting the public investment in the Project and the public purpose of increased affordable housing in the city, City staff recommends amending the Agreement and the Deed Restrictions to subordinate the Deed Restrictions to the lien of a permanent financing loan between Lender and Owner/Developer and terminate the City’s right to recapture the TIF Subsidy in the event of a default, and in consideration, extending the Affordability Period as defined in the Agreement and Deed Restrictions by an additional five years from 15 years to 20 years. Such extension is not intended to restrict Owner/Developer from engaging in typical recapitalization activities customarily occurring in the timeframe between year 15 and year 20, including, without limitation, the buy-out of the LIHTC investor, refinancing or placing new debt, or otherwise restructuring the Project in connection with the timing of the bonds and financing.
Ongoing affordability restrictions for the Project for a total of 45 years are secured by the LURA between TDHCA and Owner/Developer, and the LURA will not be subordinated unless the Project is recapitalized due to LIHTC investor buy-out or loan refinancing or restructuring.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On September 23, 2020, the City Council authorized the Agreement and a TIF Subsidy in an amount not to exceed $7,678,874.00 from the Fort Worth Avenue TIF District Fund in consideration of the Project by Resolution No. 20-1480.
The City Council was briefed by memorandum regarding this matter on September 5, 2025.
FISCAL INFORMATION
No cost consideration to the City.
OWNER/DEVELOPER
Villas at WH 20, LP
By: Villas at WH 20 GP, LLC
By: Sycamore Strategies, LLC
Jessica Krochtengel, Managing Member
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