Wednesday, April 8, 2009

The Party’s Over at the Plaza

Last Saturday, our friends Larry and Ted Hamilton finally made the decision that the plan to convert the old twelve-story Plaza Hotel (built as a Ramada) into affordable housing wasn’t going to work, at least for this year. After Central Dallas CDC couldn’t get neighborhood support, Larry and Ted did great work in getting the neighborhood behind their revised project and even getting approval from the Dallas City Council.

But in the end, the effort to revise our original proposal sufficiently to satisfy the Hamilton’s ideas and the neighborhood’s needs just couldn’t be completed. Every effort to make it work for the neighborhood meant pushing one more rule of the Texas Department of Housing and Community Affairs to the limit. Finally, a point was reached where we just couldn’t satisfy both sides.

I was the official contact person with the State, so even though it was the Hamilton’s project, not Central Dallas CDC’s, all the notices came through me. I felt a little like the ball in a tennis match—batted from one side to another without any control over where I was going. I was amazed at the ability of Larry Hamilton to innovate on the run to make the project work and with his persistence, but in the end there was a problem he couldn’t solve. The Texas Department of Housing and Community Affairs won’t allow efficiency units smaller than 600 sq. ft. unless a project is permanent supportive housing, and the community wasn’t ready to accept permanent supportive housing—but the neighborhood association did indicate that it might reconsider next year.

I don’t know whether Larry and Ted will wait and try again next year, or try to sell the property (as we all know it isn’t a good time to try to find buyers). But unless the TDHCA changes its rules or the community decides to accept permanent supportive housing, I think it will be hard to design a workable plan to renovate the building. Smaller units generate higher per square foot revenue and, at least when I ran the numbers, I couldn’t come close to making a project with all the units 600 sq. ft. each or larger cash flow.

The last thing Dallas needs is another vacant building, and one of the things Dallas needs most is affordable housing, so let’s all hope that a solution can be found.

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