If you're not familiar with the Dallas Development Fund, well, neither were we until we discovered it would be spending this afternoon in the basement of City Hall discussing developer Jack Matthews' boutique hotel project adjacent to South Side on Lamar, a proposed mixed-use development near the Dallas Veterans Affairs Medical Center and Kroger's plans to renovate Elliott's Hardware near Parkland Hospital.
The seven-member board already handed out $18.5 million of the $55 million received from the federal government's New Markets Tax Credit Program to Matthews, which was unanimously approved on November 10 by the city council. Today it green-lighted another $12 million for Lancaster Urban Village, a project encompassing 14,000 square feet of retail and 193 residential units, and took under consideration a yet-to-be-determined allocation to Kroger.
The NMTC gives a credit against federal income taxes to investments aimed at building community facilities and job-generating projects in low-income neighborhoods, with the DDF focusing on South Dallas areas near DART stations. Essentially, large banks buy these credits and receive 39 percent of the investment, while writing a check for around 25 percent (depending on the fluctuating value of the credits) to ensure the project's viability. However, the allotments don't represent actual subsidies. Matthews is set to receive around $5 million, and the Lancaster development collects around $3.3 million through the program.
The update on Matthews' $19.1 million redo of the former coffin assemblage facility at 1325 S. Lamar St. was extremely brief, as the board was told that the funding is set to come together in the second quarter of next year.
When it came time to discuss the Lancaster project, board member and former mayoral candidate Edward Okpa pushed for 40 percent participation of minority and women's business enterprises instead of the 25 percent requirement, but the board ultimately tabled the discussion. In addition to the retail and residential components, the development will also include a 403-space parking structure, with some of it set aside for the Dallas Urban League, which is donating land in exchange for the spots.
Kroger's $16.2 million purchase and renovation of Elliott's Hardware raised questions about whether the money should be focused on more distressed areas of the city, with some board members even wondering if the project would move forward without federal assistance. A swap of the credits for Kroger's agreement to build a new store in South Dallas was proposed, but Heather Lepeska with the city's Office of Economic Development said those discussions haven't progressed. Lepeska added that the feds could look favorably upon giving the credits to the Kroger project because of President Obama's Healthy Food Financing Initiative.
The Lancaster project is headed to the council's Economic Development Committee for approval, which would place it on the agenda for a vote from the full council. The DDF is set to discuss more specifics about Kroger's plans at its next meeting scheduled for January 13.
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