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Dallas adaptive reuse developers lean on “story” to secure financing
Builders say unique history and architecture can unlock funding tools such as historic tax credits, and they cite combining opportunity zone, tax increment financing and state C-PACE money on a recent Oak Cliff project.
Developers pursuing adaptive reuse in the Dallas Fort Worth area say the ability to explain a property’s unique story is often the first step to securing financing, according to Bisnow. Speaking at the DFW Adaptive Reuse Summit on Aug. 11 at the Hotel Dax in Addison, Proxy Property founder AJ Ramler said developers typically spot something other buyers miss, which helps them purchase the building, but also requires finding a bank that agrees with the project’s value.
Ramler added that for adaptive reuse, getting the capital stack right can be as important as the project concept itself, particularly for speculative or complex deals. Proxy Property, which focuses on restoring and reimagining historic and underutilized properties around Dallas’ Oak Cliff area, recently completed a project in an opportunity zone that combined local government support from a tax increment financing district, plus financing from the state’s commercial property assessed clean energy program.
Bisnow also highlighted how historic tax credits can factor into redevelopment decisions for buildings over 50 years old. Merriman Anderson Architects team leader Patrick Hazard said the firm has seen this play out on adaptive reuse projects including The National and The Statler in Dallas, and The Sinclair in Fort Worth.
The discussion linked the adaptive reuse pipeline to demand for high-end hotels in DFW. Bisnow said several historic buildings have been converted into upscale or luxury hotels, and it pointed to major convention center revamps as a reason the region may see growing hotel needs, including Dallas’ $3.7 billion overhaul and expansion of the Kay Bailey Hutchison Convention Center, aimed at revitalizing downtown.
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