The City Council of Dallas recently approved a payment of about $300,000 to settle a lawsuit filed by a developer and an independent nonprofit organization that partnered with the city to develop housing for low-income residents.
The disagreement began with a deal between the city council of Dallas and Hamilton Atmos LP, in which the developer pledged to renovate and lease four vacant buildings, turning them into retail shopping and about 230 residential apartments. The majority of the residential apartments would be rented at rates below the market price. The agreement with Hamilton Atmos LP pledged to pay up to $23 million, which would come from the Downtown Connection Tax Increment Financing District.
Hamilton Properties and CitySquare Housing expected their payment from the TIF funds in 2018, but the city didn’t pay them, leading the developers to sue. The city council of Dallas paid the developers nearly $8.6 million in early 2020, but the litigation continued, and the city council approved an additional payment of $300,000 to settle the lawsuit’s interest and legal fees.
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Why was the lawsuit not resolved sooner, and what was the reason for council members to utilize taxpayer money to settle it during Wednesday’s meeting?
Despite the multimillion-dollar payment, the litigation’s unresolved issues raise several unanswered questions. The city council of Dallas officials contacted by KERA News declined to comment, and some council members remain tight-lipped about the settlement decision. Although the city sought to get out from under the lawsuit by citing a law that can exempt or limit governments from damages in a lawsuit, it seemed the developers had a strong case.
Due to the ongoing lawsuit, the City Council of Dallas excluded both developers from working on projects that involve federal low-income housing tax credits. This restriction reduced CitySquare Housing’s ability to create affordable housing projects. The unanswered questions regarding the delayed payment and the settlement decision raise concerns about the use of taxpayer dollars and the transparency of the city’s dealings with developers and independent nonprofits.
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