STRATEGIC PRIORITY: Growing
AGENDA DATE: May 28, 2025
COUNCIL DISTRICT(S): 14
DEPARTMENT: Office of Economic Development
EXECUTIVE: Robin Bentley
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SUBJECT
Title
Authorize (1) a real property tax abatement agreement and all necessary documents with CP Land Owner, LLC and/or affiliate (“Cityplace Phase 1 Owner”) for a period of ten years in an amount equal to the City’s taxes assessed on ninety percent of the added taxable value to the real property resulting from and in consideration of Cityplace Phase 1 Owner’s real property investment in and delivery of Phase 1: The Apron (“Cityplace Phase 1 Project”) on approximately 5.3 acres of unimproved land addressed as 2711 North Haskell in the City of Dallas Neighborhood Empowerment Zone Number 21 (“NEZ No. 21”); (2) a real property tax abatement agreement and all other necessary documents with CP Tower Owner, LLC and/or affiliate (“Cityplace Phase 2A Owner”) for a period of ten years in an amount equal to the City’s taxes assessed on ninety percent of the added taxable value to the real property resulting from and in consideration of Cityplace Phase 2A Owner’s real property investment in and delivery of Phase 2A: The Tower (“Cityplace Phase 2A Project”) on approximately 3.3 acres of improved land addressed as 2711 North Haskell in the City of Dallas NEZ No. 21; (3) a real property tax abatement agreement and all other necessary documents with CP Tower Owner, LLC and/or affiliate (“Cityplace Phase 2B Owner”) for a period of ten years in an amount equal to the City’s taxes assessed on ninety percent of the added taxable value to the real property resulting from and in consideration of the Cityplace Phase 2B Owner’s real property investment in and delivery of Phase 2B: The Tower (“Cityplace Phase 2B Project”) on approximately 3.3 acres of improved land addressed as 2711 North Haskell in the City of Dallas NEZ No. 21; and (4) a real property tax abatement agreement and all other necessary documents with CP Tower Owner, LLC and/or affiliate (“Cityplace Phase 2C Owner”) for a period of ten years in an amount equal to the City’s taxes assessed on ninety percent of the added taxable value to the real property resulting from and in consideration of the Cityplace Phase 2C Owner’s real property investment in and delivery of Phase 2C: The Tower (“Cityplace Phase 2C Project”) on approximately 3.3 acres of improved land addressed as 2711 North Haskell in the City of Dallas NEZ No. 21, in accordance with the City’s Economic Development Incentive Policy - Estimated Forgone Revenue: $13,849,498.00, over a ten-year period (all four phases)
Body
BACKGROUND
Approximately nine months ago, NexPoint Diversified Real Estate Trust (“NexPoint”) submitted a development incentive application to the Office of Economic Development for gap funding to support four separate phases of new development/redevelopment of the Cityplace Tower and surrounding undeveloped land at 2711 North Haskell Avenue (“Property”) within Neighborhood Empowerment Zone Number 21 (“NEZ No. 21”) and an Economic Development Target Area.
The Project will consist of the following:
1. Phase 1: The Apron (“Cityplace Phase 1 Project”):
a. new ground-up construction of a minimum of 465 mixed-income multi-family residential units (rental), of which a minimum of 20% (93 units) shall be set aside as affordable for fifteen years
b. a minimum of 15,000 net rentable square feet of ground floor retail/commercial space throughout the Phase 1 buildings
c. tenant amenities, to be shared with hotel, including two rooftop pools, fitness center, and social activity spaces
d. site improvements (public and private) necessary to complete Phase 1 of the Project which shall include modernization of and safety improvements for the interface between Cityplace Tower and the underground Cityplace/Uptown DART station in coordination with DART’s improvement efforts, renovation and structural enhancement of the six underground parking garages, landscaping improvements, and all necessary utilities, lighting, signage, and streetscape to complete the Project
2. Phase 2A: The Tower (“Cityplace Phase 2A Project”):
a. conversion of floors 15-21, 32-36, and 39-41 to deliver a minimum of 240 mixed-income multi-family residential units (rental), of which a minimum of 20% (48 units) shall be set aside as affordable for fifteen years
b. construction of amenity floor within the Tower consisting of fitness center and swimming pool to be accessible to all residents of Phase 2A, Phase 2B, and Phase 2C of the Tower
3. Phase 2B: The Tower (Cityplace Phase 2B Project”):
a. conversion of floors 27-28 and 37-38 to deliver a minimum of 115 multi-mixed-income multi-family residential units (rental), of which a minimum of 20% (23 units) shall be set aside as affordable for fifteen years
4. Phase 2C: The Tower (“Cityplace Phase 2C Project”):
a. conversion of floors 22-26 and 29-31 to deliver a minimum of 150 mixed-income multi-family residential units (rental), of which a minimum of 20% (30 units) shall be set aside as affordable for fifteen years
Phase 2: The Tower will not include portions of the Tower that are anticipated to be maintained as office or hotel uses.
The total Project cost (all four phases) is estimated at $445,261,449.00 comprised of the following components: (i) site acquisition cost of $37,000,000.00, (ii) hard costs of approximately $333,364,454.00, and (iii) professional fees and soft costs of approximately $74,896,995.00, including contractor overhead/profit and developer fee. The construction costs shown above include parking garage enhancements/structural reinforcement ($7,200,000.00) and DART station interface/concourse improvements ($3,800,000.00).
The Project was reviewed by the City’s Urban Design Peer Review Panel (“Panel”) on March 21, 2025, and NexPoint has agreed to accommodate the Panel’s recommendations.
Based on a comprehensive review of the real estate development incentive application and extensive consultation with the City’s independent outside underwriter, staff has proposed, for each of the four phases, a real property (RP) tax abatement for a period of ten years in an amount equal to the City’s taxes assessed on ninety percent of the added taxable value to the real property resulting from and in consideration of the owner/developer’s real property investment in and delivery of each phase. In early April, staff and NexPoint reached agreement on the proposed real property (RP) tax abatement incentive.
The resolution accompanying this agenda item contains the detailed terms and conditions of the proposed real property tax abatement agreements.
ESTIMATED SCHEDULE OF PROJECT
Begin Construction December 2025
Complete Construction December 2030
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Economic Development Committee was briefed by memorandum regarding this matter on May 5, 2025. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=14145153&GUID=813A62E0-B505-44BA-90F0-F4AC757DFF34>
FISCAL INFORMATION
Estimated Forgone Revenue: $13,849,498, over a ten-year period beginning FY2027-28 (all four phases).
DEVELOPER/EXECUTIVE
NexPoint Diversified Real Estate Trust
Matt McGraner, Chief Investment Officer
MAP
Attached