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Council to consider PILOT for Reserve at Shiloh; staff proposes $120,000 annual payment with 3.5% escalation
Summary
City staff described a proposed payment-in-lieu-of-taxes (PILOT) to support refinancing of the Reserve at Shiloh affordable housing project: the site has 106 units, was built under a 9% LIHTC, and staff proposed a $120,000 annual payment that escalates 3.5% per year; the PILOT will be on the regular meeting agenda tomorrow for council consideration.
City staff presented proposed parameters for a payment-in-lieu-of-taxes arrangement to preserve the Reserve at Shiloh, an affordable multifamily development that staff said needs assistance to meet refinancing requirements.
Matt Watson told council the Reserve at Shiloh was completed in 2022, has about 106 units built through a 9% low-income housing tax-credit allocation, and is currently about 92.5% occupied. Watson said the property’s existing tax valuation made it difficult to meet debt‑service coverage ratios during refinancing; the Housing Finance Corporation can ground-lease the property and offer a tax-exemption that helps projects qualify for loans while preserving payments to taxing entities through a PILOT.
Staff said the city collected roughly $95,000 from the property in 2025 and that the negotiated PILOT concept calls for a $120,000 annual payment that escalates 3.5% per year and remains tied to the land if it is sold or assigned. Watson said the arrangement is structured so that if the developer fails to make the PILOT payments, the Garland Housing Finance Corporation will no longer provide the tax exemption.
Council members asked which taxing entities would be affected (the school district, county, Dallas College and Parkland were cited) and what the developer would gain (a substantially reduced effective tax burden that improves debt‑service ratios). Staff said GHFC and the city retain leverage and can condition or revoke exemptions if terms are not met. Watson said the resolution and contract to authorize the city manager to enter the agreement will be on the council agenda at the regular meeting tomorrow; no vote was taken during the work session.
