Council approves PFC lease for mixed-income project at 5550 LBJ after divided debate over tax foregone and affordability

The Dallas City Council approved a resolution on April 23 authorizing the Dallas Public Facility Corporation to acquire, develop and own the property at 5550 Lyndon B. Johnson Freeway and to enter a 75-year lease with High Street Residential (or an affiliate) for a mixed-income multifamily project.

City staff and the applicant described the project as adaptive reuse of vacant office buildings into multifamily housing intended to provide mixed-income units in the International District near the Galleria and LBJ Freeway. Staff said the project’s allocation of affordable units will total roughly half of the development: 40% of units targeted at 80% area median income (AMI) and additional units moved into lower AMI tiers so that 50% of units will meet affordability requirements overall. The housing department’s project review produced a public-benefit score in the mid-70s (staff cited 76%) and staff reported rental-savings estimates that contributed to that public-benefit calculation.

Council debate was lengthy and divided. Councilmember Kara Mendelson publicly opposed the deal at the dais, citing estimated foregone tax revenue the agenda listed at about $170 million over the duration of the incentive and concerns about privileging areas near the Galleria that already attract private investment. Several councilmembers pushed back, arguing the project will add mixed-income housing in a high-opportunity area, reduce commutes and help meet the city’s housing goals. Supporters said PFC and HFC tools have delivered the majority of new affordable units in recent years and highlighted the project’s public-benefit metrics.

Housing staff said the project deviates from standard affordability bands by adding deeper affordability: the applicant agreed to move 5% of units down from the 60% to the 50% AMI band to increase lower-income access. Staff described the project as a “catalyst” for more mixed-income development in the International District.

Speakers for and against the resolution included the applicant’s representative, Trammell Crow Company (Kevin Hickman), housing department staff who described affordability and underwriting details, and many council members. Questions from the council addressed the public-benefit score, market rents in the submarket, and whether the city should prioritize similarly sized incentives in southern neighborhoods.

After debate the council adopted the item. Councilmembers who opposed it stated their votes were on record. The action allows the PFC process to proceed under the terms presented to council and authorizes staff to finalize required agreements.

Action details: The council approved the Dallas Public Facility Corporation acquisition and 75-year lease for 5550 LBJ to support mixed-income housing (agenda item 24). Staff reported a public-benefit score of about 76% and described the affordability mix of the approved deal.