Real Estate

Crow Holdings Is after $7 Million from the Design District TIF for a Project that's not in the Design District

Last year, UT Southwestern announced plans to build the Dallas Proton Treatment Center, a $225 million, state-of-the-art clinic and laboratory offering cutting-edge cancer treatment. The "proton" is a reference to the accelerator that fires positively charged particles at 112,000 miles per second. When aimed at, say, a brain tumor, it can fight the cancer while minimizing damage to surrounding tissue

The facility will occupy the site of the former Dallas Apparel Mart, which closed in 2004, sandwiched by Stemmons Freeway and the Trinity Railway Express just northwest of downtown. The vision is that it will one day be surrounded by hotels, offices and retail. Market Center Land LP is the entity that technically owns the land, though that name is considerably less recognizable than that of its corporate parent, Crow Holdings.

But before construction began, Crow Holdings and its partners turned to the city to sweeten the pot, which the board of directors of the Design District TIF did last week to the tune of $7 million. The payment, drawn from the boost in property taxes the development is expected to bring, will help cover environmental remediation, utilities, paving and other infrastructure improvements.

That's hardly remarkable. There are 18 TIFs in the city handing out such incentives with the hope of spurring development in areas that would otherwise be neglected. Also relatively unremarkable is the fact that the TIF's boundaries had to be extended from the Design District and across Stemmons so it could encompass the apparel mart site. The same thing happened a year ago when the Victory Park TIF expanded to West Dallas.

The most interesting part of the TIF board's vote is the coziness of its relationship with the developer in question.

Crow Holdings has been a huge property owner in the neighborhood for decades. It owns nearly a fifth of the Design District's 160 acres and was one of the driving forces behind the creation of the TIF, for obvious reasons. One if its executives, Will Mundinger III, even served until recently on the TIF board.

Mundinger didn't vote on the proton center reimbursement. He resigned from the board in January, according to city records. Instead, he steered the project through the TIF application process and lobbied his former board colleagues on behalf of Crow Holdings.

(Update: Things get a bit complicated here. Crow owns the land, but it is a separate entity, Dallas Proton Treatment Center, LLC, that's applying for the TIF funds. Crow is looking to sell that DPTC, LLC the a portion of its land.)

Mundinger declined to comment when reached at his office on Friday, but there's nothing to suggest he violated either the law or the city's ethics rules. (City Council members have a one-year waiting period after leaving office, as do members of the City Plan Commission and other boards. But advisory boards, like those governing TIFs, do not). It doesn't even seem to be a bad deal; the increased property tax revenue over the life of the TIF district is predicted to be $8.6 million, slightly more than is being paid, and the project may well have received the same amount of funding had the Apparel Mart been drawn into the Southwestern Medical TIF instead, which given that it's closer and includes UT Southwestern-related medical developments, would seem to be the better fit.

In the end, Mundinger's case is less an aberration than the rule. TIF boards are typically picked by a single City Council member. Some own property in the district, while most of the rest tend to be plucked from the business community. There's just not a lot of built-in oversight, unless you count the City Council's rubber stamp.

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Eric Nicholson
Contact: Eric Nicholson