`PILLAR: Growing
AGENDA DATE: June 24, 2026
COUNCIL DISTRICT(S): 6
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 DDF, Pecan Deluxe and affiliated entities, and Dudley Ventures, LLC, a subsidiary of Valley Bank, and its subsidiaries thereof, including up to $15 million of DDF’s existing NMTC allocation, in support of the Pecan Deluxe Manufacturing Expansion Project located at 2575 Lone Star Drive, Dallas, Texas 75212 (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.
Body
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 New Markets Tax Credit (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 ($15 million) and beneficiary of the NMTC subsidy (Pecan Deluxe).
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 7-year credit allowance period.
On May 15, 2026, DDF Board of Directors approved up to $15 million in NMTC allocation to support the Pecan Deluxe Project located at 2575 Lone Star Drive, Dallas, Texas (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.
Pecan Deluxe is acquiring a 3-acre site across the street from its existing headquarters to construct a new state-of-the-art production facility. The new production facility will include approximately 83,656 square feet of production space, approximately 13,400 square feet of installed freezer and cold storage space, and sub-level parking for approximately 140 vehicles. Additionally, Pecan Deluxe recently added a new boba production line at its current facility that will also be supported through the NMTC financing.
Founded in 1950, Pecan Deluxe is a family-owned business that began as an ice cream shop and evolved into a global manufacturer of innovative ingredients and confectionery products for the food and beverage industry. Today, the company employs more than 600 globally and manufactures more than 1,500 products including baked goods, candies, pralines, nuts, sauces, dough products, and boba for restaurants, food service companies, dairies, and confectionery brands worldwide.
The Project will expand Pecan Deluxe’s production capacity by approximately 33% and support new product lines. The expansion is expected to support more than 340 permanent full-time equivalent positions, including retention of approximately 265 existing jobs and the creation of a minimum of 75 additional manufacturing, warehouse, and production positions. Many of the jobs created and retained through the Project are anticipated to be quality jobs accessible to individuals without a four-year degree.
The Project site is located at 2575 Lone Star Drive in Dallas, Texas. The Project falls within Census Tract 48113020500, which is NMTC-qualified and considered “severely distressed” per the CDFI Fund based on a median family income at 51% of the area median income.
The Project is anticipated to provide significant community and economic benefits through quality job creation and retention in West Dallas. Benefits include medical, dental, and vision insurance, retirement benefits with employer match, paid time off, annual safety trainings, and free annual Dallas Area Rapid Transit passes to reduce transportation barriers. Pecan Deluxe has demonstrated long-term workforce retention and employee advancement, with more than 30 employees having worked for the company for over 25 years.
As noted, many of the positions will be accessible without a four-year college degree, aligning with the educational profile of the surrounding community where approximately 89% of residents ages 25 and older do not possess a four-year degree. The Project is anticipated to support accessible employment opportunities in food production, manufacturing, warehouse operations, and related industrial functions.
NMTC financing is a critical component of the Project’s capital stack. Pecan Deluxe’s current operations are constrained by limited space at its existing headquarters facility along Lone Star Drive. Rather than relocating operations outside the City of Dallas, the company elected to acquire a nearby site directly across from its current operations to retain and expand its workforce within the community. However, the selected site included higher acquisition and development costs than comparable greenfield sites and presented topographic challenges that increased predevelopment and construction costs. NMTC financing will help offset these additional costs and support continued business expansion within the city of Dallas
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 Pecan Deluxe 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
Pecan Deluxe
Jay Brigham, President/Chief Executive Officer