Dallas City Hall gets whopped upside the head for its low-income housing policy.

Developers Larry Hamilton (left) and Ted Hamilton are good guys, but even good guys can use a whop with a two-by-four once in a blue moon.
Hal Samples

Tell me first. To be a cool place to live, what does downtown Dallas need? Action. Tons and tons of people, not all super-rich, not all homeless, either.

But that's the problem with downtown. Rich people in the towers. Desperadoes in the alleys. Long empty sidewalks between.

For that to change, downtown needs to become affordable to jobsians. Not rich. Not poor. Not white, black or brown. Just people with jobs.

Guess what. I think maybe that door just cracked.

In a small room in the bowels of City Hall at 8:30 in the morning on one of those hard weather days last week, an obscure body voted to change direction on the renovation of a handful of old office towers—known as the Atmos Project.

It was the first hint of a whole new thing, and it only happened because some guys whopped the city upside the head with a two-by-four. I will come back to that, of course, because I know you love head-whoppings.

The important thing is this: The city board, whose name is too long for me to mention yet, voted to put way more subsidized low-rent apartments into the Atmos re-development deal than originally planned.

For decades, Dallas has taken federal funds designed to foster low-income housing downtown and used the money instead to make downtown hotsy-totsy. The result is what you see now—notsy.

Cool new residential communities are springing up all around downtown like wild roses in a graveyard. Making the drive into downtown, on the surface streets from almost any direction, you will traverse a newly vibrant corridor. In that sense, Dallas is really happening.

But downtown itself continues to molder, because City Hall has been trying to create the high-rise equivalent of a gated community downtown, and gated communities suck.

So now I guess I have to name the official board that did the vote, right? Here it comes: This was a vote of the Joint Board of Directors of the Reinvestment Zone Number Eleven City of Dallas, Texas Downtown Connection Tax Increment Financing District and the Reinvestment Zone Number Five City of Dallas, Texas City Center Tax Increment Financing District and Downtown Dallas Development Authority.

Could we agree to something here, just to move things along? How about we call them The Obscure Body?

OK. The Obscure Body is in charge of handing out millions of dollars in city tax money to developers who agree, in exchange for the loot, to come in and renovate old empty office towers as apartment buildings.

It sticks in my craw—does it yours?—to give tax money to people to pay them to do business. But if we didn't give developers this incentive, nobody would touch downtown—as few did from about 1985 to 2005—and downtown would just sit there and rot forever.

So this way we dish the developers some fairly huge amounts of our municipal wealth, along with state and federal money, and in return they create something that we want—a vibrant downtown.

But...and this is a major but...the downtown created under this system is almost entirely a creation of government, our government, by us, through our elected officials, with our money. So our government needs to have a strong voice in how the money is spent and what gets created.

The city has jurisdiction over money bequeathed to it by the federal government as "community development block grant" funds. That money, administered by the U.S. Department of Housing and Urban Development, carries specific strict legal requirements dealing with affordable housing.

If you use HUD money on a housing project, then at least 51 percent of the units in that project are supposed to be available at guaranteed low rents for 15 years or more.

Last summer I wrote two columns ("A Tale of Two Cities," May 6, 2010, and "Fee Fi Fo Feds," June 10, 2010) about two developers, Curtis Lockey and Craig MacKenzie, who claim that The Obscure Body has worked for years to defeat affordable housing efforts: They say the Body hands out the HUD money, but then they make sure no affordable housing or very little gets built downtown.

Lockey and MacKenzie say The Obscure Body screwed them out of $30 million on a downtown development deal because they were trying to do what HUD required by making most of their project affordable. Their complaint is still under review by HUD—a shoe waiting to fall.

But the accusations in this business also have an even nastier edge. Lockey and Mackenzie have alleged in a complaint to HUD that the behavior of The Obscure Body in particular and Dallas City Hall in general has been about keeping downtown white.

As an example, the developers pointed to the deal that The Obscure Body voted on last week—a deal in which the two men had no personal interest or role. The Atmos project is four buildings in all, usually called the Atmos Complex, at the east end of downtown. These buildings, long dis-used, no longer have any connection with Atmos Energy, the natural gas utility that once owned them.


The accusation here is a touchy one, because it involves Ted and Larry Hamilton, who enjoy high respect for the quality of their work in downtown on other projects, and John Greenan, executive director of Central Dallas Community Development Corporation, an offshoot of Central Dallas Ministries.

Greenan is the financial maestro behind downtown Dallas' one affordable housing success story, Citywalk@Akard, which opened two years ago. The Hamiltons, meanwhile, were trying to do an entire building of affordable housing as part of their Atmos Complex Project.

There is a school of thought out there that the Hamiltons and Greenan are heroes—the last people who should be accused of practicing discrimination. That's certainly how I have always felt about them.

But Lockey and MacKenzie asked the State of Texas to take a close look at the way the Atmos project was being proposed. In order to get HUD money and state tax credits for the whole project, the Hamiltons and Greenan were going to jam almost all of their affordable units into one building of the four being rebuilt.

Lockey and MacKenzie are successful developers themselves, who have dealt with the City of Dallas on a number of projects. They say the Atmos project, as proposed, was a perfect expression of the culture of The Obscure Body, of the city's Economic Development Department and even of the city council.

It was segregation.

Hold on. Here is what you need to know. Larry Hamilton confirmed to me last week, a day before the meeting of The Obscure Body, that HUD had agreed with Lockey and MacKenzie.

Hamilton told me: "[HUD] alleged that because all of the 60 percent [low income] units were in one building and minorities would tend to make up a greater percentage of the low-income population, therefore we were engaging in racial segregation."

That's why the project came back to The Obscure Body last week, greatly modified to resolve HUD's objections, in part by increasing the overall amount of affordable housing in the whole project but also by mixing more of the affordable units into the fancier-schmancier buildings.

I called HUD and asked them to confirm or deny this. They would say only that the new version of the plan is under review, and they declined to comment on the old plan.

So if Hamilton is telling the truth—and of course he is—then we have to ask how it came to pass, before Lockey and Mackenzie raised their objections, that the Hamiltons, Greenan and The Obscure Body were about to launch on a project that HUD ultimately decided was racist.

Was it an accident? An entirely unintentional consequence of actions taken with the best of intentions? Given the players, that's where I want to fall.

But MacKenzie said to me last week that his research has led him to believe there are precious few accidents in the Dallas affordable housing picture.

"In the last decade, the City of Dallas has sponsored almost 8,000 low-income housing units in South Dallas," he said. "And in the same time-frame, guess how many they sponsored north of I-30. Twenty-five hundred."

Given the fact that most of the city's population lies north of I-30, MacKenzie said his calculations show that Dallas has built low-income housing in minority neighborhoods at five times the rate per capita of residents in those neighborhoods as in white neighborhoods.

That doesn't sound like an accident. It sounds more like the use of government policy and money to preserve and increase patterns of racial segregation.

But you know what else? People live and learn. MacKenzie was effusive in his praise for the way the Atmos project seems to be headed now.

I want to be effusive, too. The Hamiltons are good guys. Greenan is a brave pioneer. I even suspect the members of The Obscure Body are fairly OK, probably don't kick their dogs or pull their sisters' hair or anything.

But this vote of The Obscure Body came about because Lockey and MacKenzie whopped the city upside the head with a two-by-four by going to HUD with their complaints. This is a case of hurry-up, catch-up and probably a little bit of cover-up by a City Hall worried about even worse repercussions as HUD continues to examine the Lockey and MacKenzie complaint against the city.

All of which is great, in my book. Some lessons are hard to learn. Me, it was trigonometry. Dallas, it's always going to be race.

If you ask me, we all owe a huge vote of thanks to Lockey and MacKenzie for being resolute and forcing local government to do what it should have been doing all along—using our government money to create a cool, diverse, exciting downtown and not some pale imitation of Highland Park Village (a fancy place, if you're not from Dallas and reading this).


The point is learning the lesson. And if that's what the vote of The Obscure Body was—the lesson learned—then downtown Dallas finally will get out from under the albatross of discrimination and boredom and become the cool place to live it should be. I do think it's coming. I'm excited.

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