FORT WORTH – The U.S. Department of Housing and Urban Development today announced the approval of a $13.5 million loan guarantee to the City of Dallas, which will generate third-party investment capital to support economic and community development in the Lake Highlands Town Center. The guarantee will leverage an additional $34.6 million of private investment for the development, which will create approximately 475 permanent jobs in the area.
HUD is providing the loan guarantee assistance under its Section 108 Loan Guarantee Assistance Program which enables local governments to borrow money from private investors at reduced interest rates. In return, local governments pledge current and future Community Development Block Grant (CDBG) allocations to cover the loan amount as security for the loan. Over the years, Section 108 guarantees generally have generated $4 of private investment for every $1 in Section 108 guarantee.
Lake Highlands Town Center is a mixed-use transit-oriented development located in northeast Dallas in the Skillman Corridor Tax Increment Financing district. The phase 1 development supported by the loan guarantee is situated around the DART Light Rail’s Lake Highlands Station, which is a multi-modal station that includes commuter parking, bus transit parking, and hike and bike trails.
Upon completion, there will be a total of 164,690 square feet of retail and office development, a 57,186 square feet grocery anchor, and 81,558 square feet for restaurants, small retail shops and service oriented retailers. Once all phases are completed, the Lake Highlands Town Center development will include a mix of commercial and residential developments.
“HUD’s Loan Guarantee Program can be a powerful public investment tool to drive economic development in underserved areas,” said HUD Secretary Shaun Donovan. “The program will be a boost to the City’s revitalization efforts and provide jobs for residents who need them most.
“The Section 108 loan guarantee program is specifically designed to help cities find solutions for their particular needs and can help draw private capital into the process. I’m particularly pleased that this guarantee brings with it over $34 Million in additional investment,” added Acting HUD Regional Administrator Mark Brezina. “And the concept of Sustainability means among other things encouraging development both commercial and residential close to transit hubs. Combined with new jobs, many for low and moderate income workers, the City of Dallas has the opportunity to make a real difference with Lake Highlands Town Center. HUD is happy to be a part of that process.”
Section 108 loans are not risk-free, however; local governments borrowing funds secured by this loan guarantee program must pledge a portion their current and future Community Development Block Grant (CDBG) allocations to cover the loan amount as security for the loan. The loan must be re-paid within 20 years.
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