Earlier this week, Dallas Mayor Mike Rawlings kicked off his Southern Dallas initiative with the goal of driving new development into targeted neighborhoods in South and West Dallas. It’s essential to the health of our city to encourage smart growth in all sectors. His aim is to bring some powerful financial tools to bear to help ensure the viability of development for the long term.
Equity funds and loan funds are tools that are used throughout the country to spur development in difficult areas. The Real Estate Council Foundation has launched a Community Fund to provide loans for nonprofit developers where there is no access to capital for commercial real estate or housing developments. The same type of equity investment fund also needs to be launched in our community.
It’s common throughout the community development industry for “double-bottom-line” funds to provide a meaningful market rate return to investors while also doing well for the community—the second bottom line. “Triple-bottom-line” funds provide a market rate of return to the investors as the top line, help the community on the second line, and focus on sustainable developments—like transit-oriented projects or those that employ green building standards—as the third bottom line.
The San Francisco Bay Area, for instance, has several funds that have raised more than $200 million for commercial projects that will benefit difficult-to-develop areas—areas similar to our South and West Dallas. This is an innovative and creative way to drive capital to those areas that need it most.
Another issue curbing development in these areas is Dallas’ tree ordinance, which is presenting serious challenges in the zoning and permitting process. Recently, TREC member Frank Mihalopoulos encountered these challenges while trying to bring a Walmart and accompanying retail development to South Dallas. These barriers were overcome, but it was a difficult and expensive process that would have discouraged less tenacious souls.
The Real Estate Council has been working with the city to help improve these processes. It’s tough to do all we can to protect the environment while also brining sorely needed grocery stores and retail businesses to an area of the city that has not benefitted from those types of developments. The southern sector of Dallas has some of the most beautiful topography and wooded areas in this part of North Texas. Sometimes saving the trees directly conflicts with needed services.
The focus of the mayor’s development plans for South and West Dallas makes a lot of sense. Targeted areas have a strong employer—like the Dallas VA Medical Center—or a natural sense of community where businesses already thrive but need a little help—like the Jefferson Avenue area.
If you put the tools in place to attract capital and then market areas effectively so that others can learn about their intrinsic value, you can lift the entire city up through natural growth. But like everything else, we need a sales pitch. I’m thinking Mayor Rawlings knows how to close a sale.
Linda McMahon is president of The Real Estate Council. Contact her at [email protected].
