The Denton City Council’s split decision on an affordable-housing partnership caught housing officials off guard this week.
The Denton Housing Authority and a Dallas developer, Ojala Holdings, proposed a two-part apartment complex for seniors and working families that would take the entire property off the tax rolls. The complicated partnership brings apartments to a spot in southern Denton near the MedPark train station in exchange for the property tax break. Some of the tax money diverted by the project (city, school and county taxes) would go to the housing authority.
In an email Wednesday, the authority’s executive director, Sherri McDade, said now the project’s future could be in doubt.
“We have a call scheduled with our developer tomorrow [Thursday] to see what he wants to do and if we can salvage any of the plans,” McDade said.
During a special meeting Tuesday afternoon, the City Council narrowly agreed that The Hudson at MedPark, with 160 apartments for seniors, could be removed from the tax rolls. But the council declined to do the same for The Standard at MedPark, a complex with 230 apartments for working families.
Mayor Chris Watts was the swing vote. Council members Keely Briggs, Dalton Gregory and Kevin Roden agreed both projects could come off the tax rolls. Council members Sara Bagheri, Joey Hawkins and Kathleen Wazny opposed the deal for both projects.
Watts said he was frustrated the deal came to city leaders as an all-or-nothing package, with no room for negotiations. He agreed to allow the senior housing project to come off the property tax rolls, after confirming the people living in Heritage Oaks would likely be moved there.
Heritage Oaks is an aging, 114-unit apartment complex for seniors in northern Denton managed by the housing authority, which Watts said was “falling down.”
But he declined to support the same tax break for The Standard at MedPark, saying the entire project marked a significant policy shift for the city.
Previously, city leaders have approved affordable-housing deals that kept the properties on the tax rolls. About 600 new units are planned elsewhere in the city, including 332 units at the Veranda, 2420 E. McKinney St., that is expected to open this summer.
According to an estimate by the city staff, the tax break for the two MedPark properties would come to about $8 million in city, school and county taxes over about 15 years. The developer would share some of the tax savings as payments to the housing authority. The housing authority, in turn, would take that money (about $600,000 to $700,000 annually) and use it to supplement its housing voucher program.
Vouchers help seniors and families pay for housing in Denton’s increasingly expensive rental market. The authority administers about $9 million each year in federal grants, primarily by subsidizing rent through a voucher program.
However, federal budget cuts continue to limit how many people the authority can help. McDade has said previously she believed the authority may never be able to help the 3,000 families on Denton’s waiting list.
According to board member Sheryl English, the housing authority needs to look for partnerships such as the MedPark project to raise money locally and help people locally.
Those council members who voted against the tax breaks all said they were uncomfortable diverting that much tax money, including school and county tax money, without more discussion and deliberation.
In addition, council member Sara Bagheri said the project would likely bring between 125 to 150 students to Pecan Creek Elementary School without sending any new money to the school district.
Council member Kathleen Wazny said the apartment dwellers would also need city services that must be paid for, including roads, and police and fire protection.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881.
In Other Action
During it's meeting Tuesday night, the Denton City Council also:
Approved an agreement with Medical City Denton for maintenance work on a city-operated transmission line on hospital property.
Approved construction of a new electric substation at the corner of East Sherman Drive and Hartlee Field Road.
Agreed to spend $600 in council contingency funds on the Day of the Dead Festival on behalf of outgoing council member Joey Hawkins.
Approved city manager’s reorganization plan that includes one deputy city manager and one assistant city manager.
Amended the current budget to add $375,000 for cemetery fences, $20,000 to the Downtown Reinvestment Fund for additional grants and $20,000 to the Library Donation Fund for furniture, equipment and supplies.
Approved downtown reinvestment grants for $25,000 each to building improvements at 112 W. Oak St. and 421 E. Oak St.