PILLAR: Vibrant
AGENDA DATE: August 12, 2026
COUNCIL DISTRICT(S): 3
DEPARTMENT: Office of Housing and Community Empowerment
PRIORITY: N/A
______________________________________________________________________
SUBJECT
Title
Authorize the Dallas Public Facility Corporation to (1) acquire, develop, and own Rivulet Apartments, a 240-unit, mixed-income, multifamily development to be located at 6400 University Hills Boulevard, Dallas, Texas 75241 (Project); and (2) enter into a seventy-five-year lease agreement with Rivulet MF LandCo I, LLC or its affiliate, for the development of the Project - Estimated Revenue Foregone: General Fund $1,185,925.15 (for 60 years; see Fiscal Information)
*In alignment with Dallas Housing Resource Catalog.
Body
BACKGROUND
The City of Dallas (City) is authorized by the Public Facility Corporation Act, Chapter 303 of the Texas Local Government Code, as amended (the Act) to create a Public Facility Corporation for the purposes established in the Act, including the financing, acquisition, construction, and leasing of public facilities under the Act. On June 24, 2020, by Resolution No. 20-1035, the City Council authorized the creation of the Dallas Public Facility Corporation (DPFC or Corporation) pursuant to the Act to further the public purposes stated in the Corporation’s Articles of Incorporation and Bylaws, which were subsequently amended by Resolution No. 22-1194 (Bylaws). Section 6.2 of the Corporation’s Bylaws requires City Council approval by written resolution prior to entering into any agreement that would result in a property tax exemption. Per Section 7.3 of the Bylaws, any public facility related to multifamily residential development of the Corporation shall not proceed unless (1) the development of the public facility could not be feasible but for the Corporation’s participation, and (2) the development of the public facility is in furtherance of the City of Dallas’ Comprehensive Housing Policy which has been replaced by the Dallas Housing Resource Catalog (DHRC), as amended.
On April 12, 2023, by Resolution No. 23-0444, the City Council adopted the DHRC, which contains the approved city-supported housing programs, corporations, funding, and compliance tools, used to develop and maintain mixed-income housing through the Office of Housing and Community Empowerment (OHCE). On April 22, 2026, by Resolution No. 26-0742, the City Council authorized an amendment to the DHRC and the program statement for the DPFC to establish a clearer and more consistent process for reviewing DPFC projects that seek City Council approval. Additionally, the amendment requires the Corporation to prioritize new construction of mixed-income housing in areas with poverty rates greater than 20.00%, areas with higher-than-average appraised values of real estate as compared to the city-wide values, or in designated high-opportunity areas with poverty rates below 20.00%.
This Project advances this priority by developing new housing units in an area with a poverty rate greater than 20.00%, in Council District 3. The Project is located in census tract 112.02, which has a 21.88% poverty rate. As discussed below, the fair housing rating is low positive.
Rivulet MF LandCo I, LLC (together with its affiliates, the Applicant), a Texas limited liability company, submitted an application to the Corporation for the development of Rivulet Apartments, a 240-unit mixed-income multifamily development to be located at 6400 University Hills Boulevard, Dallas, Texas 75241 (Project). The development is a new construction project, and the Corporation will own the site and improvements and lease the Project back to the Applicant and/or its affiliate. Pursuant to the Act, any public facility owned by a public facility corporation is exempt from all ad valorem taxes. To qualify as a public facility pursuant to the Act, a multifamily property must reserve at least 40.00% of the units for residents earning at or below 80.00% of the Area Median Income (AMI) and at least 10.00% of the units for residents earning at or below 60.00% of the AMI. The Project will reserve 10.00% of the units for residents earning at or below 60.00% AMI, 40.00% of the units for residents earning at or below 80.00% AMI, and the remaining units will be leased at a fair market rate without income restrictions.
On October 22, 2024, the DPFC Board of Directors adopted a resolution inducing the Project in partnership with the Applicant and authorizing the negotiation and execution of a term sheet. The Applicant specializes in delivering high-quality, well-designed attainable multifamily housing to the market.
The Project will be developed on approximately 6.52 acres located at 6400 University Hills Boulevard within the larger 90-acre Rivulet mixed-use development in Council District 3. The site is located at the northwest corner of Camp Wisdom Blvd and University Hills and will include a 240-unit mixed-income multifamily community consisting of 120 affordable units and 120 market-rate units. Amenities are anticipated to include a clubhouse, fitness center, swimming pool, courtyard, community gathering spaces, green space, dog park, elevators, on-site management, and wireless internet access in common areas. The Project benefits from proximity to the UNT Dallas DART Station, public transit routes, major employment centers, healthcare facilities, educational institutions, retail services, and community amenities. The property is zoned to permit multifamily development and is proposed as a component of the larger Rivulet mixed-use master planned community.
The anticipated unit mix and rental rates are as follows:
|
Unit Type |
Sq. Ft. |
AMI |
Units |
Rent |
|
Efficiency |
425 |
60.00% |
1 |
$ 950.00 |
|
Efficiency |
515 |
60.00% |
3 |
$1,000.00 |
|
Efficiency |
425 |
80.00% |
6 |
$ 950.00 |
|
Efficiency |
515 |
80.00% |
11 |
$1,000.00 |
|
Efficiency |
425 |
Market |
7 |
$ 950.00 |
|
Efficiency |
515 |
Market |
15 |
$1,000.00 |
|
1BR |
600 |
60.00% |
7 |
$1,188.00 |
|
1BR |
680 |
60.00% |
6 |
$1,188.00 |
|
1BR |
600 |
80.00% |
32 |
$1,250.00 |
|
1BR |
680 |
80.00% |
24 |
$1,275.00 |
|
1BR |
600 |
Market |
40 |
$1,350.00 |
|
1BR |
680 |
Market |
30 |
$1,500.00 |
|
2BR |
925 |
60.00% |
3 |
$1,200.00 |
|
2BR |
925 |
60.00% |
3 |
$1,225.00 |
|
2BR |
1,080 |
60.00% |
1 |
$1,425.00 |
|
2BR |
925 |
80.00% |
4 |
$1,600.00 |
|
2BR |
925 |
80.00% |
14 |
$1,700.00 |
|
2BR |
1,080 |
80.00% |
5 |
$1,750.00 |
|
2BR |
925 |
Market |
5 |
$1,900.00 |
|
2BR |
925 |
Market |
17 |
$1,950.00 |
|
2BR |
1,080 |
Market |
6 |
$2,175.00 |
Reserving units for individuals and families earning between 60.00% and 80.00% AMI provides affordable housing for households that earn above the low-income housing tax credit income limit of 60.00% AMI but would be cost-burdened by market rents. Household incomes between 60.00% and 80.00% of AMI range from approximately $49,320.00 to $65,700.00 for an individual and increase with family size and reflect average incomes across a variety of employment sectors, such as teachers, first responders, government employees, and health care providers.
Total development costs are estimated to be approximately $45,240,031.00, which includes the acquisition price for the land. The development budget, excluding soft and financing costs, is estimated to be approximately $34,916,662.00, which is $145,486.09 per unit.
The proposed financing sources and uses are as follows:
|
Proposed Financing Sources |
Amount |
|
Mortgage Loan |
$ 31,752,000.00 |
|
LIHTC Equity |
$ 13,488,031.00 |
|
Total |
$ 45,240,031.00 |
|
Proposed Uses |
Amount |
|
Development Costs |
$31,995,300.00 |
|
Land Acquisition |
$ 2,921,362.00 |
|
Soft Costs |
$ 6,935,118.00 |
|
Financing Costs |
$ 3,388,252.00 |
|
Total |
$45,240,031.00 |
City staff reviewed the Project for alignment with the DHRC and confirmed the following:
|
Development/Area Characteristics |
Result |
|
2020 Census Tract Poverty Rate |
21.88% |
|
Designated High Opportunity Area |
No |
|
Appraisal Values Higher than City-wide Values |
No |
|
Construction Type |
New Construction |
The Fair Housing rating for the Project is low positive. The city uses the Fair Housing Review Worksheet to assess projects based on measurable factors, including poverty levels, opportunity indicators, income mix, accessibility standards issued under the Americans with Disabilities Act, anti-displacement efforts, resident services, and outreach. Each project receives an overall impact rating from High Positive to High Negative, showing how it supports fair housing goals. To receive City support, a project must earn a neutral or positive rating, demonstrating that it promotes fair housing and inclusive, stable communities.
The Project will be owned by the DPFC and leased to the Applicant and other potential owners for 75 years. Over 60 years, the DPFC is estimated to receive $66,440,800.00 in revenues and rental savings, including $13,496,056.00 in fee payments to the DPFC and $52,944,743.00 in rent savings directly to residents. Potential proceeds to the DPFC include (1) a $250,000.00 structuring fee paid at closing; (2) lease payments starting at $202,222.00 and increasing by 3.00% annually upon stabilization; (3) 15.00% of net sale proceeds upon first capital event, and (4) 2.00% of gross profits on all future capital events. In the event of a sale during the Project's lifetime, DPFC will continue to receive annual lease payments. Upon completion of the lease, DPFC will own the Project free and clear.
DPFC revenues will support DPFC operations and be reinvested in attainable housing. The Project results in foregone City tax revenue while the DPFC owns the asset. The current tax bill is $16,154.57, with a 60-year estimate of $41,025,625.00 in foregone taxes. However, the workforce housing rental savings of $52,944,743.00 over 60 years and the estimated $13,496,056.00 in Project revenues provide the City with $25,415,174.00 in benefits that outweigh the foregone revenue.
The DPFC’s estimated revenues were calculated by DPFC’s partnership counsel and financial advisors. Market rent comps and current construction costs were analyzed to ensure the project costs are reasonable for the market. DPFC financial advisors have also confirmed that, but for the ad valorem tax exemption, the Project would not be economically feasible. Also, the DPFC’s revenue consideration and affordability levels have been analyzed to confirm that the ad valorem tax exemption does not over-subsidize the Project.
The DPFC Board, legal counsel, and financial advisors have confirmed that this Project would not be feasible but for the DPFC’s participation and that the Project furthers the goals of the DHRC. The DPFC Board recommends approval of this item to allow this mixed-income housing development to move forward.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On October 22, 2024, the Dallas Public Facility Corporation Board of Directors adopted a resolution inducing the Project in partnership with the Applicant and authorizing the negotiation and execution of a term sheet with the Applicant for the development of the Project.
The City Council was briefed by memorandum regarding this matter on August 7, 2026. <https://dallascityhall.com/government/citymanager/Documents/FY25-26%20Memos/Office%20of%20Housing%20and%20Community%20Empowerment%20Upcoming%20Agenda%20Items.pdf>
FISCAL INFORMATION
Estimated Revenue Foregone: General Fund $1,185,925.15 (for 60 years).
The following is an estimate of the tax revenue the City of Dallas is projected to forgo. These projections are based on the current taxable value of the property and the anticipated value if the project were possible to be built as a market-rate project. Please note that the amount of estimated taxes foregone is a speculative number and not a representation of actual taxes currently due to the City. For DPFC projects, the values are calculated by DPFC’s underwriter at the time.
|
Taxing Entity |
Actual Taxes |
Estimated Taxes Forgone |
|
|
Current Year |
Year 15 |
Year 60 |
Year 15 |
Year 60 |
|
COD |
$ 7,273.23 |
$135,274.18 |
$1,185,925.15 |
$4,183,192.00 |
$41,025,625.00 |
|
Dallas ISD |
$10,344.00 |
$192,387.17 |
$1,686,624.75 |
$7,049,654.10 |
$69,122,219.75 |
|
Dallas County |
$ 2,242.96 |
$ 41,716.62 |
$ 365,722.34 |
$1,528,624.44 |
$14,988,240.94 |
|
Dallas College |
$ 1,109.25 |
$ 20,630.85 |
$ 180,867.02 |
$ 755,977.51 |
$ 7,412,398.28 |
|
Parkland Hospital |
$ 2,206.53 |
$ 41,039.06 |
$ 359,782.30 |
$1,503,797.64 |
$14,744,812.94 |
MAP
Attached