PILLAR: Growing
AGENDA DATE: June 24, 2026
COUNCIL DISTRICT(S): 7
DEPARTMENT: Office of Economic Development
PRIORITY: Targeted Economic Growth
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SUBJECT
Title
Authorize a New Markets Tax Credit (NMTC) transaction between the Dallas Development Fund (DDF), a Dallas-based Texas non-profit corporation and certified Community Development Entity or a subsidiary thereof, Forest Forward and affiliated entities, and U.S. Bancorp Community Development Corporation and its subsidiaries thereof, including up to $8 million of DDF’s $55 million NMTC allocation, in support of the Forest Theater Redevelopment Project located at 1918 Martin Luther King Jr. Boulevard, Dallas, Texas 75215 (Project), a qualified project under Section 45D of the Internal Revenue Code of 1986, as amended, as further described in Attachment A, and for DDF to collect related closing costs and annual fees related to the Project - Financing: No cost consideration to the City
*In alignment with Economic Development Incentive Policy.
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BACKGROUND
On February 11, 2009, the City Council authorized the creation of the DDF, a Texas nonprofit corporation and certified Community Development Entity (CDE), and submission of a (NMTC) allocation application to the U.S. Department of Treasury’s Community Development Financial Institutions Fund (CDFI), by Resolution No. 09-0461. DDF was most recently awarded $55 million in NMTC allocation during the CDFI’s 2024-2025 allocation cycle. Previously, DDF has been awarded a total of $240 million in allocation from 2009, 2012, 2014, 2017 and 2021 cycles. To date, DDF has closed 25 NMTC transactions involving $229 million in allocation.
Under DDF’s bylaws, in addition to DDF Board approval, any DDF activity involving the use, transfer or allocation of NMTC must also be approved by the City through a City Council resolution indicating the allocation amount ($8 million) and beneficiary of the NMTC subsidy (Forest Forward).
The NMTC program permits taxpayers to receive a federal income tax credit for making qualified equity investments in designated CDEs. These investments must be used by the CDE for qualified projects and investments in low-income communities, as defined by the NMTC program regulations. The investor’s tax credit totals 39% of the investment and is claimed over a seven-year credit allowance period.
On May 15, 2026, the DDF Board of Directors approved up to $8 million in NMTC allocation to support the Forest Theater Redevelopment Project located at 1918 Martin Luther King Jr. Boulevard, Dallas, Texas 75215 (Project) as a NMTC transaction in accordance with the terms and conditions in the applicable term sheet(s), including authorization for DDF officers to negotiate and execute any document necessary to complete the transaction.
Additionally, Enhanced Capital is expected to provide up to $10 million in federal NMTC allocation to support the Project. U.S. Bancorp Community Development Corporation, as the NMTC investor, will provide a total of approximately $5.6 million in NMTC Equity ($0.80 pricing) to support the $8 million in allocation from DDF and $10 million in allocation from Enhanced Capital.
The Project is a comprehensive redevelopment of the historic Forest Theater which includes rehabilitation of the National Register of Historic Places-listed Forest Theater and construction of an addition to provide additional amenities to the site. The Project is led by Forest Forward and affiliated entities (Forest Forward), a nonprofit organization founded in 2020 to restore and expand the Forest Theater while partnering with the community to drive equitable development, economic mobility, and improved outcomes for children, residents, and families in South Dallas.
Forest Forward is renovating and expanding the historic Forest Theater into a vibrant approximately 45,000 square foot mixed-use hub to anchor community revitalization efforts in South Dallas. The Project includes a concert hall with approximately 1,000 seats and a 200-seat studio theater for community events, arts programming, and performances; a 13,500 square foot creative laboratory which includes movement, visual arts, and recording studios, flex space, a resource center, sensory immersion room, and classrooms for arts education; and neighborhood-serving retail, including a locally-operated Starbucks.
The Project site is located at 1918 Martin Luther King Jr. Boulevard in Dallas, Texas. The Project falls within Census Tract 48113020900, which is NMTC-qualified and considered “severely distressed” per the CDFI Fund based on a poverty rate of 22.4% and an unemployment rate 2.24 times the national average.
The Project will provide significant community benefits through arts education, workforce development, youth programming, and cultural activation. The Project will also provide afterschool and summer programming serving approximately 350 youth annually focused on creative learning, digital media, movement, visual arts, and audio production.
Additionally, the Project will provide workforce development programming to approximately 200 residents annually through partnerships with local arts and cultural organizations. Programming will focus on workforce pathways in theater operations, hospitality, technical production, and related creative industries. The Project is also anticipated to support 35 full-time equivalent jobs, including theater operations, event management, technical production, and facilities support positions.
NMTC financing is a critical component of the Project’s capital stack due to the high costs associated with rehabilitating a long-vacant historic theater and the Project’s mission-driven operating model. The non-NMTC financing for the Project includes private pledges, public funding, including an $8 million City of Dallas Community Development grant funds from the Regional Transportation Council and U.S. Department of Housing and Urban Development, as well as Historic Tax Credit equity, and additional financing sources. NMTC assistance will help offset development costs while ensuring the Project remains accessible to the surrounding community.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On February 11, 2009, the City Council authorized the creation of the Dallas Development Fund (DDF), a non-profit Community Development Entity (CDE) by Resolution No. 09-0461.
On January 13, 2010, the City Council authorized the acceptance of the initial $55 million NMTC allocation by Resolution No. 10-0210.
On January 19, 2010, the Economic Development Committee was briefed on the DDF and the NMTC program.
On September 21, 2015, the Economic Development Committee was briefed on the DDF and the NMTC program.
On May 15, 2026, the DDF Board of Directors was briefed on the Forest Theater Redevelopment Project and approved the NMTC transaction.
The Economic Development Committee was briefed by memorandum on this matter on June 1, 2026. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=15509185&GUID=660EEA12-EF5F-4F49-92B3-828839267CD5>
FISCAL INFORMATION
No cost consideration to the City.
OWNER/EXECUTIVE
Forest Forward
Elizabeth Wattley, Chief Executive Officer
MAP
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