DPFC approves revised Oak House Phase 2 terms, adding deeper affordability and changing rent schedule

The Dallas Public Facility Corporation on June 24 approved renegotiated terms for Oak House Space 2, a planned multi‑family project at 909 E. Colorado Blvd., that increase the number of affordable units and change the rent‑payment schedule to include an upfront payment and delayed rent start.

The board’s vote, taken by roll call, was unanimous among members present. Director Tallis moved to approve the term sheet, and Director Brown seconded the motion.

The changes presented by developer representative Katie Slade shift the project from the original 350 units to 370 units and add deeper affordability by increasing the share of units at lower income levels. "Phase 2 is now fully designed," Slade said, describing the financing adjustments the developer requested to make the project financeable. She told the board the developer has identified an equity partner that asked for changes, including an upfront capitalized payment and a delayed rent stream that would begin in year six.

Why it matters: the revised terms trade recurring payments to the PFC for deeper, long‑term affordability on site. That reduces the PFC’s expected ongoing lease revenue while increasing the number of lower‑income units the project will offer.

Board and staff discussion focused on the magnitude of the tradeoffs and timing. City staff members Summer and Braxton walked the board through the underwriting and public‑benefit math. Summer said the additional 5 percentage points of units at 50% AMI would cost the project about $55,000 a year in reduced rents and that the change in rent payment terms reduces the PFC’s share of property tax savings from the typical 25% to roughly 15% under the revised structure. Summer summarized the net effect as a substantial annual difference: "that is about a $180,000 a year" reduction in what the PFC would receive compared with the prior terms, she said.

Braxton confirmed the staff calculations and added context on the rent‑savings and tax numbers used in underwriting. He said the developer’s revised rents for restricted units appear achievable and that staff’s alternative calculations produce a lower estimate of public subsidy than the developer’s original figures. When Director Montgomery compared estimated rent savings to projected stabilized taxes, Braxton agreed with his arithmetic, describing the resulting ratio as "higher than normal" but within a plausible range for this type of deal.

Board members also requested additional documents and timing details. The developer said it is scheduled to close land and financing in late August and is asking for execution of documentation so closing can proceed. Directors asked staff to provide the settlement statement and the spreadsheet of invoices the PFC intends to submit to the title company so the board can review the items that would be reimbursed on closing. Staff agreed to provide those materials at the July meeting.

The record: motion to approve the Oak House Phase 2 term sheet passed by roll call with unanimous approval among members present; the board directed staff to follow up with city attorney’s office on whether the reworked terms require separate city‑council action and to provide the settlement statement and supporting invoices before closing.

Next steps: staff will continue documentation work with the developer and legal counsel, return final closing documents to the board in July, and confirm with the city attorney whether the revised terms must be resubmitted to the city council for approval.