In the ever-evolving saga of Dallas’ plan to help developer Sycamore Strategies build affordable housing near the corner of Forest Lane and 75, city planners have revealed a new tactic to get Cypress Creek at Forest Lane off the ground. The city will purchase the 2.85-acre tract and enter a long-term ground lease agreement directly with the developer. Selling to another entity, as previously proposed, apparently won’t be effective at washing away deed restrictions which prohibit construction of multifamily housing on the property.
The new plan will go before the Dallas City Council for approval May 10.
Zachary Krochtengel, owner of Sycamore Strategies, originally proposed the 189-unit affordable housing apartment complex at 11520 North Central Expressway back in 2021. Despite strong neighborhood opposition, the council voted 13-2 to support the project, and Krochtengel was awarded 9% low-income housing tax credits (LIHTC) by the Texas Department of Housing & Community Affairs (TDHCA).
Then the private deed restrictions were discovered.
The 1976 deed restrictions originally applied to the entire 30-acre parcel at Forest and Central and permit only office buildings, hotels, motels and restaurants. Over time, though, Home Depot and multiple other businesses have been permitted.
Krochtengel isn’t one to give up, and neither is Department of Housing and Neighborhood Revitalization Director David Noguera, who says Dallas is desperately short of workforce housing. In March, the two delivered a plan to the Dallas Public Facilities Corporation board which provided for the property to be sold to the city, then sold to the DPFC, then leased back to the developer. Dallas’ involvement, city officials said, would render the deed restrictions unenforceable due to sovereign immunity, and the DPFC’s participation would activate financial incentives for the developer, including abatement of property taxes. But some DPFC board members just couldn’t get comfortable with overriding deed restrictions preferred by and adhered to by business owners surrounding the property.
City officials went back to the drawing board to simplify the plan, and that’s where we are today. The newest proposal has the city purchasing the property and leasing it directly to the developer.
According to a memo sent to council members April 28 by Assistant City Manager Majed Al-Ghalfry, the mixed income multifamily community will reserve 7% of the units for residents earning less than 80% area median income (AMI), 22% for less than 70% AMI, 25% for less than 30% AMI and 46% for residents paying market rents. The developer has also reserved funds in their budget for a lawsuit promised by Bill Roth and some other neighboring business owners who claim disregarding the deed restrictions infringes on their property rights.
In his letter to the council, Al-Ghalfry indicated that the Cypress Creek development achieves Dallas’ goal of providing housing for those who need it, but the deal simply can’t work unless the city owns the property.
“Without the City’s participation in this acquisition and ground lease development structure, this mixed-income affordable housing development will not move forward to serve the City’s affordable housing public purpose,” he wrote.