Sycamore Strategies Developing Affordable Housing, Hotel Lodging in Downtown’s Magnolia
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Hold up now; this is big. Sycamore Strategies, on the heels of a huge groundbreaking at the Cabana Hotel, confirmed last week via public documents that it plans to gut and redevelop the interior of the 29-story Magnolia Dallas and use half the space for affordable housing and the other half for hotel lodging.
The project would be the first of its kind in Dallas.
NewcrestImage announced in December 2023 that they planned to spend $200 million to redevelop the Magnolia, now in use as a boutique hotel, into a Waldorf Astoria. That deal fell apart — though no one is really talking about what happened — and in swooped Zach Krochtengel’s Sycamore Strategies. The building is now under contract.
Assistant Housing Director Darwin Wade and Krochtengel declined to comment. A city spokesman, however, confirmed that Dallas received a 9% Housing Tax Credit competitive application for a resolution of support related to “a development by Sycamore Strategies called The Residences at The Magnolia at 1401 Commerce St.”
All 9% applications that meet the minimum scoring threshold for a resolution of support will be reviewed by the Housing and Homelessness Committee on Jan. 28 followed by a full Council review on Feb. 12, the spokesman said.
Magnolia Hotel History
Built in 1922 in the Beaux Arts style, Magnolia Dallas was once the tallest building in Texas and is listed on the National Register of Historic Places. It originally served as the headquarters of Magnolia Petroleum Co. and in 1934 erected a neon rotating pegasus on the roof, which was later recreated and replaced. It can be seen as part of the Dallas skyline.
The building was purchased in 1997 by Denver-based developers and converted into a 330-room hotel. Room rates range from about $70 a night during the week to $200 on weekends. The photos on the website look fabulous, but recent visitors have said the building’s old age is evident and it’s in dire need of a makeover.
What We Know About the Plan for Magnolia Hotel
Because NewcrestImage was so far along in its process when the deal fell through, architecture and engineering work had already been done. Sources close to the project confirmed that Sycamore Strategies is moving forward with NewcrestImage’s architect, Dallas-based Gensler.
In addition to seeking tax credits from the Texas Department of Housing and Community Affairs, it’s likely the developer will ask for funding from the downtown Tax Increment Financing District.
We’ll know more later this month when the project goes before the Housing and Homelessness Solutions Committee. Until then, officials speculate that the unusual half-hotel, half-housing development will include about 130 affordable apartments and will take two or three years to complete.
