City Will Test the Waters for Selling Old Hospital Site for Mixed-Use, Housing, or Retail

From staff reports

After years of stalled progress and community pushback, the future of the old hospital site at 2929 S. Hampton Road might finally take a turn. On Monday, the Housing and Homeless Solutions Committee directed city staff to draft a “request for interest” (RFI) document, a first step in determining whether developers have an alternative vision for the long-vacant property that once housed the University General Hospital, NBC 5 reported.

Most believe that Dallas overpaid for the $6.5 million building and now finds itself in a pickle because voter-approved bond funds were committed to repurposing the building as permanent supportive housing for the homeless. 

It may come as some relief to Southwest Dallas City Councilman Zarin Gracey, who with support from colleague Far North Dallas Councilmember Cara Mendelsohn, has explained that “no one wants this” — including his District 3 constituents who’ve been clear in their opposition of adding more homeless housing in their district. He said it makes more sense to use the proceeds from the sale of the Hampton site to boost another permanent supportive housing facility in progress at 4150 Independence Rd. 

Pushback from other council members, who are concerned about the bond stipulations, has left Gracey visibly frustrated at Dallas City Council meetings. On Feb. 6 he sent a memorandum to Economic Development Committee Chair Tennell Atkins asking that the matter be placed on a March 3 EDC agenda. 

 

In his memo, Gracey said he’s seeking authorization for two strategic actions: 

• To authorize the Economic Development Corporation to facilitate the sale of 2929 S. Hampton Road through a qualified third-party broker, ensuring optimal market positioning and a maximum return on this public asset. The preferred use for this site includes a mixed-use development featuring both housing and retail to support the area’s economic growth.
• To advance the proposed sale to the full City Council for final review and approval, following Committee authorization, in accordance with standard municipal procedures.

Gracey is seeking re-election to his District 3 seat in the May 3 election and will be challenged by John Sims and Jesseca Ligthtbourne.

The Road to Hampton

In 2022, the Dallas City Council purchased the former University General Hospital at 2929 S. Hampton Road. Southwest Dallas residents left no room for confusion when they told their District 3 council representative they didn’t want another homeless facility in District 3. 

District 3 resident Darryl Baker, a former City Planner, was critical of the discussion that ensued at the Council’s Housing and Homelessness Solutions Committee meeting in December.

“Once again, you are attacking District 3 by IGNORING the fact that we have already spoken,” Baker wrote in a Feb. 12 email to HHS members. “We want you to move this item to the full Council as soon as possible and SELL THIS PROPERTY with deed restrictions (and, YES, you can place deed restrictions on the sale. OUR realty consultants can help you do that if your in-house staff needs help figuring out HOW).”

In a Dec. 10 memorandum, Assistant City Manager Alina Ciocan asked for guidance from the council on the future of the property, advising that they can keep it for its established public purpose, use it for another public purpose, or sell it. The council appears to be aware of residents’ concerns but some members are troubled by the fact that the project is tied to voter-approved bond funds designating that the building be used for homeless housing. 

To Sell or Not to Sell 

In the December committee meeting, Gracey and Mendelsohn repeated their pleas for support to sell the building. 

“I’m not going to draw this out,” Gracey said. “You all know my position. I’ve stated this for a while. I think in January [2024] is when I sent my first proposal recommending that we sell this property. I wish we would have come to this conclusion a lot sooner. Colleagues I really would appreciate your support in selling this property and particularly moving forward in an [request for proposals] format.”

Mendelsohn has been critical of the process and said it implies that elected officials aren’t listening to constituents. 

The council member added that she wants the proceeds from the sale of the Hampton Road property to go toward unfinished projects like the $4.5 million site at 4150 Independence Drive. 

“We literally kicked out people and made them homeless to create housing for people who were homeless and [now] no one lives there,” Mendelsohn said. “It is just absolutely shocking that we’re on year 2.5, almost three. Please use that funding to finish that project.”

Staff confirmed that about 103 units are available at the Independence Drive site and just one potential developer responded to a Notice of Funding Availability (NOFA) on the project. This is the third time the project has been advertised, said Assistant Housing Director Darwin Wade. 

If it’s determined that the city can’t move forward with the only interested developer, recommendations could be made to demolish the building or “issue some other type of proposal for other types of mixed-income housing,” Wade said late last year. 

Gracey said in December the people in his district are waiting for their basic housing needs to be met while the City is “sitting on solutions.” 

“I’m asking that we get out there and we begin providing services to those folks,” he said. 

The March 3 meeting of the Economic Development Committee will be streamed online and archived here. 

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Shelby Skrhak contributed to April Towery’s original report.