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Council approves revised loan and grant terms for 1708 MLK redevelopment after construction delays
Summary
Dallas approved amendments to economic development loan and grant agreements for the 1708 MLK project, shortening the loan term, clarifying project scope and payment forbearance after the developer fell behind on completion deadlines.
The Dallas City Council on Feb. 12 approved amendments to city economic development agreements for the 1708 Martin Luther King Jr. Boulevard redevelopment project, modifying loan and grant terms for Shekinah Legacy Holdings LLC.
Staff briefed council that the original agreements, approved in April 2023, included deadlines and a repayment structure that proved infeasible after execution delays, environmental remediation and other costs. The proposed amendments clarify project scope and investment requirements, reduce the loan term from 15 years to two years, remove a loan job‑creation requirement and add a 10‑job target into the grant agreement, and adjust payment schedules to forbear certain missed payments and roll them into a balloon at maturity.
Why it matters: The changes were framed by staff as an attempt to preserve the city’s financial stake and complete a partially finished development rather than foreclose on a partially completed project. City staff said the revised structure would accelerate payback and allow the city to redeploy recovered funds through the South Dallas Fair Park Opportunity Fund.
Council discussion: Councilmember Joann Mendelsohn, who pulled the item for discussion, asked why the city waited more than a year to return to council about the project and sought assurances the city was protecting taxpayer money. Robin Bentley of the Office of Economic Development told council the contract originally had unrealistic deadlines — the contract was executed in August 2023 but required completion by December 2023 — and that the developer stopped loan payments while negotiating a path to completion.
Shekinah representatives and Deputy Mayor Pro Tem Adam Bazaldua stressed the project’s value to South Dallas and argued for reworking the deal to get the project finished and the city’s funds repaid sooner. “This is a community in dire need of affordable housing and home‑ownership opportunities,” Bazaldua said in support of the amendment.
Financials and enforcement: Staff reported the developer had resumed some loan payments and that the city holds a lien on the property; the amended agreement provides forbearance on missed payments and a balloon repayment at the amended maturity. Bentley said litigation or foreclosure remained an option but that staff and council leaders favored a negotiated amendment to complete the project and recover public funds.
Outcome: The council approved the amendments. The item directs staff to finalize the restated loan and grant documents consistent with the changes discussed on the record.
Ending: Council members said they expect staff to continue monitoring payments and construction progress and to return to council if the developer falls further behind.
