STRATEGIC PRIORITY: Growing
AGENDA DATE: April 23, 2025
COUNCIL DISTRICT(S): 14
DEPARTMENT: Department of Housing and Community Development
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
Authorize the City Manager to negotiate and execute a forgivable development loan agreement and security documents with Braniff Lofts LP, an affiliate of Sycamore Strategies, LLC (together, the Applicant) in an amount not to exceed $7,000,000.00 in American Rescue Plan Act (ARPA) Redevelopment Fund (name of fund for accounting purposes, but no federal funds are being used), for the development of Braniff Lofts, a 48-unit permanent supportive housing complex located 2801 Wycliff Avenue, Dallas, Texas 75219 (Project) - Not to exceed $7,000,000.00 - Financing: ARPA Redevelopment Fund
Body
BACKGROUND
Sycamore Strategies, LLC submitted a proposal in response to the City’s Notice of Funding Availability (NOFA), as amended, to receive gap financing in the form of a cash flow loan to support reuse and/or rehabilitation of improvements, including the construction of a 48-unit permanent supportive housing complex known as Braniff Lofts. The NOFA was issued by the Department of Housing and Community Development (Housing) in accordance with the City’s Comprehensive Housing Policy (CHP), as restated in the Dallas Housing Policy 2033 (DHP33) and Dallas Housing Resource Catalog (DHRC). The Applicant and PWA Coalition dba AIDS Services of Dallas (ASD) have entered into a memorandum of understanding to co-develop and upon completion of the development of the Project, ASD will own, operate the Project and provide social services and case management. ASD will join in the Forgivable Loan Agreement, Deed of Trust and Deed Restrictions in the event ASD owns the improvements. ASD provides supportive housing to low-income men, women, and children living with or impacted by HIV/AIDS. Additionally, ASD provides wrap-around services to help individuals and families affected by, living with, or at-risk of HIV/AIDS to lead more stable lives. ASD operates five apartment communities and provides medical case management, housing stability case management, employment and meal services and medical transportation.
The Housing Department administers programs to appropriately incentivize private investment for the development of quality, sustainable housing that is affordable to the residents of the City. Specifically, Housing administers the New Construction and Substantial Rehabilitation Program, which where necessary, seeks to provide financial assistance to new developments or substantial rehabilitation of existing developments. All projects seeking financial assistance are required to submit a Notice of Intent to apply for financial assistance through NOFA to develop affordable homeownership and rental housing. As outlined in the NOFA, multiple sources of funding are available. However, proposed projects must meet specific thresholds to qualify for the use of a specific funding source.
The NOFA scorecard criteria for multi-family rental developments include the following:
|
Scoring Criteria |
Maximum Points |
Awarded Points |
|
Readiness |
43 |
43 |
|
Location |
35 |
21 |
|
Target Population and Project Attributes |
25 |
19 |
|
Developer Experience and Capacity |
27 |
21 |
|
Bonus Points |
22 |
6 |
|
Penalty for Nonperforming Previously Funded Projects |
-10 |
0 |
|
Total |
152 |
110 |
The proposed Braniff Lofts development received a fundable score of 110 of 152 points.
The City Council approved a Resolution of Support for 2024 9% Competitive Low Income Housing Tax Credits (HTC) on February 14, 2024, by Resolution No. 24-0256. On December 20, 2024, the Applicant filed an Application for a 2024 Carryforward Designation Certificate with the Texas Bond Review Board for the issuance of bonds by the Texas Department of Housing and Community Affairs (TDHCA) to pay costs related to the qualified residential rental housing project. The amount of $20,000,000.00 was confirmed as carryforward for the purpose of issuing bonds under Chapter 1372 of the Texas Government Code Section 1312 of the Tax Act. On January 8, 2025, the Applicant was awarded 4% HTC from TDHCA instead of 9% HTC in the form of a carryforward commitment. In addition to City funding, Sycamore Strategies and/or its affiliates plan to utilize the carryforward commitment (Docket Number 24CF-017) from the TDHCA to acquire and construct the Project. The requested City funds, if approved, will cover the gap in financing created by recent market conditions, increased construction costs, and will stabilize the viability and economics of the development.
The Applicant specializes in the development of mixed-income and affordable housing and is a Texas-certified Historically Underutilized Business (HUB). The Applicant has decades of experience working in the public and private sectors and has been involved in multiple affordable housing developments from land purchase through development and asset management. Sycamore Strategies, LLC is located in Dallas with 1,200 units under development across Texas, of which four developments totaling 647 units are located in Dallas. The Applicant will serve as a general partner in the ownership structure.
The Applicant proposes to develop 48 units, to include 12 studio-bedroom and 36 one-bedroom units. The Project will be a five-story adaptive reuse/rehabilitation construction product providing permanent supportive housing to formerly unsheltered individuals and/or special needs populations who struggle to retain stable housing without easy access to comprehensive supportive services. Eighteen of the 48 units will be dedicated and prioritized for persons experiencing homelessness. The unit mix may change slightly as units turnover. Flexibility will be needed in the early years as the project becomes operational. The Applicant and PWA Coalition dba AIDS Services of Dallas (ASD) have entered into a memorandum of understanding to co-develop and upon completion of the development of the Project, ASD will own, operate the Project and provide social services and case management. ASD provides supportive housing to low-income men, women, and children living with or impacted by HIV/AIDS. Additionally, ASD provides wrap-around services to help individuals and families affected by, living with, or at-risk of HIV/AIDS to lead more stable lives. ASD operates five apartment communities and provides medical case management, housing stability case management, employment and meal services and medical transportation.
The units will feature full electric kitchen appliances, nine-foot ceilings, porches or balconies with storage, decorative lighting, garden tubs and walk-in showers, full size washers and dryer connections, high-speed internet, and cable tv access, and other TDHCA-required features. The plans also include elevators in each building, community kitchen, full fitness studio, billiards room, movie theatre, business center, laundry facilities, barbeque stations, picnic areas, pavilion with seating and outdoor fans, and a resort style pool. Planned resident services will include social events, income tax preparation, food pantry services, annual health fair, weekly classes, notary services, recreational activities, and part-time resident services coordinator.
The Applicant will work with the Office of Emergency Management and Crisis Response for security input/upgrades, community activities, and incorporate best practices of Crime Prevention Through Environmental Design. Additionally, the Applicant will provide modern security features to include a full camera system, controlled access, a community crime watch program, and participation in National Night Out to ensure a safe living environment for all residents and staff.
The proposed development is located within a High Opportunity census tract and is just minutes from three major expressways allowing easy access to the Medical District and Downtown Dallas. Additionally, the development will provide close access to Dallas Love Field, Oak Lawn Library, CVS Pharmacy, Kroger, and Whole Foods Mart. Also, the development is located less than one mile from the Maple at Wycliff Dallas Area Rapid Transit Station and minutes from employment centers in the Dallas downtown area.
The unit mix and rental rates are as follows:
|
Unit Type |
AMI |
Units |
Rent |
|
0BR |
60% |
12 |
$ 1,007.00 |
|
1BR |
60% |
36 |
$ 1,071.00 |
Total development costs are anticipated to be approximately $32,435,734.00 which includes the acquisition price for the land. The hard cost construction budget is anticipated to be $13,985,880.00 which is $291,372.50 per unit.
The anticipated financing sources and uses are as follows:
|
Proposed Financing Sources |
Amount |
|
TDHCA Soft Funding |
$ 6,000,000.00 |
|
Tax Credit Equity |
$ 8,053,444.00 |
|
Historic Tax Credit Equity |
$ 8,018,944.00 |
|
City of Dallas Forgivable Loan |
$ 7,000,000.00 |
|
Deferred Developer Fee |
$ 3,363,346.00 |
|
Total |
$32,435,734.00 |
|
Proposed Uses |
Costs |
|
Acquisition |
$ 8,000,000.00 |
|
Hard Construction Costs |
$13,985,880.00 |
|
Soft Costs & Financing Fees |
$ 4,948,495.00 |
|
Developer Fees |
$ 5,014,476.00 |
|
Reserves |
$ 486,883.00 |
|
Total |
$32,435,734.00 |
After the development is complete, all 48 units will be made available to households earning 0.00%-60.00% Area Median lncome (AMI). All 48 units will remain affordable to eligible households for a minimum of 20 years.
On February 28, 2024, the City Council authorized the transfer and reallocation of ARPA funds from the U.S. Department of Treasury for the Coronavirus Local Fiscal Recovery Fund to the ARPA Redevelopment multi-year fund to provide assistance with completing projects by Resolution No. 24-0315. The ARPA Redevelopment Funds are City general funds not subject to federal ARPA requirements.
The development has been found to affirmatively further fair housing by the City’s Office of Equity and Inclusion Fair Housing Division. Housing staff recommends approval of this item as it furthers the mixed-income housing goals of the DHP33 and the Housing Action Plan, meets the threshold requirements of the NOFA, and the financial gap has been confirmed by third-party underwriting.
ESTIMATED SCHEDULE OF PROJECT
Begin Construction July 2025
Complete Construction July 2027
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On February 28, 2024, the City Council authorized the transfer and reallocation of ARPA funds from the U.S. Department of Treasury for the Coronavirus Local Fiscal Recovery Fund to the ARPA Redevelopment multi-year fund to provide assistance with completing projects by Resolution No. 24-0315.
The Housing and Homelessness Solutions was briefed by memorandum regarding this matter on March 24, 2025. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=13944685&GUID=4483CC29-61C7-4D5E-AA1A-67AC82FB2E8E>
FISCAL INFORMATION
|
Fund |
FY 2025 |
FY 2026 |
Future Years |
|
ARPA Redevelopment Fund |
$7,000,000.00 |
$0.00 |
$0.00 |
M/WBE INFORMATION
In accordance with the City’s Business Inclusion and Development Policy adopted on September 23, 2020, by Resolution No. 20-1430, as amended, the M/WBE participation on this contract is as follows:
|
Contract Amount |
Procurement Category |
M/WBE Goal |
|
$13,985,880.00 $7,000,000.00 |
Construction |
32.00% |
|
M/WBE Subcontracting % |
M/WBE Overall % |
M/WBE Overall Participation $ |
|
32.00% |
32.00% |
$8,823,021.12 $2,240,000.00 |
|
• This contract meets the M/WBE goal. |
|
• Braniff Lofts, LP - Local; Workforce - 100.00% Local |
OWNER
Braniff Lofts, LP
Zachary Krochtengel, Member of the General Partner
MAP
Attached