Cypress Creek at Forest Lane PFC Project Advances as Board Members Say They Expect to Get Sued
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A controversial housing project inched forward Tuesday in a carefully-worded motion by the Dallas Public Facility Corp. Board of Directors.
The Dallas PFC Board voted 8-3 to approve a non-binding memorandum of understanding with Sycamore Strategies “subject to indemnification by the [Dallas] City Council and research from corporate counsel that we will not take on too much risk.”
It was clear from almost three hours of discussion that PFC Board members expect litigation to follow due to long-standing deed restrictions that prohibit housing on the site. This project could become a test case of whether “sovereign immunity” would extend to the PFC, Board members said.
There was debate Tuesday among Board members about their responsibility as Dallas City Council appointees.
“The City Council didn’t put us here to pass to them a lot of loose ends and due diligence that has not been done,” said at-large PFC Board member Mary Poss. “We’ve already admitted to ourselves that we don’t have all the facts that we need. Our city attorney refuses to opine on the issue directly, at least to us. There’s no contract on the property. We don’t know what the seller thinks about selling the property or removing the deed restrictions.”
“This is not what the PFC was designed to do as it relates to getting involved in removing deed restrictions and private property rights. You have a case here where this is coming to you not because of financial need but because of deed restrictions and trying to get around those.”
DISTRICT 10 Councilman Adam McGough
Poss joined District 10 Board member Mark Holmes, who represents the area where the project is proposed, and District 12 Board member Kevin Winters in voting against the non-binding MOU.
The motion was made by District 11 Board member Alan Tallis, who has publicly spoken on the merits of the Cypress Creek at Forest Lane project. Board member Keith Pomykal abstained from the vote due to a conflict of interest.
When reached after the meeting, Sycamore Strategies developer Zachary Krochtengel declined to comment for this story.
Cypress Creek at Forest Lane
Cypress Creek at Forest Lane, planned on 2.5 acres at 11520 North Central Expressway, was first proposed two years ago and approved by the Dallas City Council, but couldn’t move forward because of the deed restrictions prohibiting home construction.
Developers with Sycamore Strategies opted instead to go through the Public Facility Corp., which would allow them to pay an upfront development fee and lease the land from the PFC tax-free.
The project was heard by the PFC board in late February and deferred to Tuesday. In the meantime, a community meeting was held in District 10, where dozens of residents expressed opposition for a variety of reasons, including concerns about public safety.
Those who spoke in favor of the project at Tuesday’s meeting noted that it is not immediately surrounded by any housing developments, therefore minimizing the impact on neighbors. Proponents also highlighted its proximity to a Dallas Area Rapid Transit station and the need for workforce housing.
Proposal For Affordable Housing
Krochtengel, the Sycamore Strategies developer, is planning a low-income, tax-credit, Class A apartment complex with about 109 affordable units (55 percent) and 86 market-rate units (45 percent).
A new affordable housing project has not been built in District 10 in 30 years and is “extremely necessary,” Krochtengel told residents at the March 18 community meeting.
He reiterated his claim at Tuesday’s PFC board meeting.
William Roth, who owns a 75,000-square-foot office building adjacent to the proposed Cypress Creek site, said at the March 18 meeting that he didn’t want to file a lawsuit, but he would.
“The deed restriction does not allow apartments on that property,” Roth said at the public meeting earlier this month. “If the city is considering action to disregard that deed restriction … that’s what’s called a taking of our private property rights. This is not a referendum from our standpoint on affordable housing or Class A apartments or workforce housing. Our issue is we have the right to control what development is going on in this area. For the city to be able to take that right away from us for the enrichment of a private developer does not seem to be the right thing to do.”
Roth reiterated Tuesday that he strongly opposes the project and was concerned about a lack of transparency in the business deal between the developer and the city.
District 10 Councilman Adam McGough also spoke against the project. He noted suggestions that were made after the March 18 meeting about creating an area plan or a Public Improvement District around the site.
“One of the things the community has asked for is a good [development] partner, and that has not been the case,” McGough said. “The developer thinks they can push this through without any conciliation or working with the community so they haven’t been willing to do so. I will tell you, this is not what the PFC was designed to do as it relates to getting involved in removing deed restrictions and private property rights. You have a case here where this is coming to you not because of financial need but because of deed restrictions and trying to get around those.”
This is a historic Black neighborhood and already has a lot of affordable housing, the councilman added.
“We know this deed restriction is going to go straight into litigation,” he said. “I think the board should consider that in its discussions.”
Attorney Jim Plummer of Bracewell LLP, who represents the PFC, told the Board on Tuesday that “the city would be the party responsible for the inverse condemnation, but you can rest assured that you would be brought into any litigation by the current property owner as that litigation proceeds.”
Plummer added that the City Attorney’s Office has indicated that there will be no right to an inverse condemnation suit against the city and that the city has sovereign immunity because it is acquiring the project for the public purpose of providing low-income housing.
