Lake Highlands Town Center Update - June 23, 2011

Investment to Date
Eighty-six ($86) million dollars has been invested to date into Lake Highlands Town Center of which $73 million has been funded directly by a private investment partnership led by Prescott Realty Group and $13 million funded directly from 2006 City of Dallas bond funds, Dallas County, and the North Central Texas Council of Governments (NCTCOG). DART has invested at least $10 million in the new Lake Highlands Light Rail Station bringing the total new investment to date in the community of Lake Highlands to $96 million.

ACCOMPLISHMENTS

Infrastructure Improvements
Extensive infrastructure improvements have been completed in preparation for vertical construction.

  • More than 1,330 dilapidated apartments were demolished.
  • More than 100 mature trees were transplanted into two on-site tree farms and then replanted throughout the development.
  • Lakes were created and the dredged dirt was used to balance areas that were formerly flood plain.
  • More than 30,000 tons of concrete from the apartment slabs and streets were crushed and re-used as fill material for off-site road projects.
  • Underground public utilities were installed including sanitary and storm sewer, fresh water, electricity and gas lines.
  • A 20-acre, fully landscaped park with hike and bike trail, amphitheater with stone-tiered seating, and fountains was constructed and recently dedicated to the City of Dallas in March 2011.

Transit Components
DART opened a new, multi-modal Light Rail Station for Lake Highlands Town Center in December 2010. The Lake Highlands Station is a key anchor in making LHTC a successful transit-oriented development. Transit improvements built by Prescott in partnership with the City of Dallas, COG and Dallas County include:

  • Creation of all public streets and streetscapes throughout the site
  • Demolition of a single-lane bridge crossing the creek north of Walnut Hill and construction of a new, two-lane bridge to accommodate DART buses leading to the station
  • Creation of a hike and bike trail connecting the DART station to the southern boundary of LHTC.

$2.8 Million COG Sustainable Development Grant Award
In a public-private application to the North Central Texas Council of Governments' Call for Projects, Prescott together with Dallas County and the City of Dallas applied for and were awarded a Sustainable Development grant totaling approximately $2.8 million for two public construction projects adjacent to Lake Highlands Town Center. Prescott and Dallas County will provide matching funds totaling $700,000 for a total project cost of $3.5 million. These monies will be utilized as follows:

  • Extension of the hike and bike trail from the southern property line of Lake Highlands Town Center to White Rock Creek Trail, providing direct connectivity to White Rock Lake and the greater Dallas trail system.
  • Improvements to the Skillman and Walnut Hill intersection including east/west alignment of lanes and pedestrian enhancements.

Public Art
In connection with the City of Dallas bond funds allocated to LHTC, Prescott worked with the City of Dallas' Department of Cultural Affairs to commission three pieces of art to be installed at the entrances of the park later this year.

Communication
Over the last few years Prescott has made over thirty presentations to the community and local organizations updating them on the progress of LHTC. Prescott will re-establish that consistent connection with the Lake Highlands community in the months ahead as it moves forward with Phase I vertical development.

PREPARATIONS FOR VERTICAL CONSTRUCTION

Design Review Process and TIF Modification
Because it has been four years since the original TIF Development Agreement was completed, some of the provisions required modification to reflect the economic realities of the market. Prescott and the City of Dallas just completed a modification to the agreement for the purpose of resetting completion deadlines and the TIF eligible reimbursement amounts. In connection with the modification, the TIF Board requested a comprehensive design review be conducted for LHTC.

  • A third-party development consultant engaged by the City of Dallas took a fresh look at the design of the project, the proposed build-out, uses, densities and economics.
  • The consultant's recommendations were reviewed by the TIF Board's Design Review Committee (DRC). On June 1st, the Board unanimously approved the DRC's recommendations and the proposed TIF Development Agreement modifications recommended by City staff.
  • The TIF Development Agreement modifications were unanimously approved by the Economic Development Committee of the Dallas City Council on June 20th and unanimously approved by the Dallas City Council on June 22nd.
  • The next step includes a more comprehensive design review in collaboration with the third-party consultant and the City that will occur over the next several months. Upon completion of that review the recommendations will be reported back to the TIF Design Review Committee and TIF Board for approval.

Phase I Retail
Prescott has been working on several initiatives related to kicking off Phase 1 on LHTC's vertical construction, including a grocery anchored retail block. The retail block is planned to consist of 75,000-100,000 square feet including a grocery anchor. Obtaining construction financing has been a challenge because of the economy, as has signing a grocery anchor. A grocery anchor lease has not yet been executed but Prescott is working diligently on that aspect of the project.

Phase I Multi-family
When the credit markets collapsed, Prescott turned to a financing program called the HUD 221(d)(4) program for a construction loan for the first multi-family block of 200, Class A units. This program offers conventional financing from the Department of Housing and Urban Development in Washington D.C (HUD). Prescott submitted final application documents for the financing in March 2011 and is waiting for final approval by HUD.

There is no requirement for affordable housing under this HUD program. As clarification, this HUD program is not Section 8 housing, assisted-income or low income housing. The TIF Development agreement with the City includes a twenty percent requirement for affordable housing which is measured as eighty percent of median income. Other key points about the HUD 221(d)(4) financing are:

  • Timing. Once HUD approval is obtained, construction can begin in 60-90 days. Prescott hopes to begin construction later this summer.
  • HUD 221(d)(4) program is a construction loan that converts to a permanent 40-year fixed rate loan upon completion of construction.
  • Recent guidelines by HUD under this program place emphasis on projects that are urban, infill, sustainable, and transit-oriented, all elements provided by LHTC.
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