Developer Yigal Lelah is asking the City Council this afternoon to approve a rezoning request for a plot of land in southeast Dallas on which he plans to build 13 townhomes. The request—a rather small change from a Single Family District to a Townhouse District—has already won the support of the City Plan Commission. And these undeveloped 1.14 acres probably wouldn’t raise many eyebrows. But Lelah is the developer behind the failed Patriots Crossing development, which cost the city almost $4.5 million in tax dollars that went to purchase land across from the VA hospital and never delivered the planned mixed-use development he promised.
“It’s a very tiny deal and you guys should have no interest in it,” Lelah said in an interview in his office on Tuesday afternoon. “I’m a private developer. I bought the land with my own money. I’m developing it with my own money. It’s of no interest to the city, really. Does the city want housing or do they not want housing?”
The plot he hopes to rezone is empty land just south of Scyene Road and N. St. Augustine Drive, about 2 miles north of Pleasant Grove. It sits near a church, a Family Dollar, a gas station, a couple of apartment complexes, and more undeveloped land. State records show Lelah is a managing partner of Casa Bella Homes, which builds made-to-order residences from a set number of floorplans in Dallas, Seagoville, Garland, Grand Prairie, and North Fort Worth. He is also the managing partner of Next Stop, LLC, which is the owner of the land and made the ask.
But the city knows him best for Patriots Crossing, a deal that hung around City Hall for six years that, according to the Dallas Morning News at the time, was “based on two promises that he proved unable to fulfill” in the Lancaster corridor in southern Dallas. Lelah was never able to get the VA hospital to sign off on his plan to connect the properties with a skywalk; all the VA was interested in was a big parking lot. As the two sides went back and forth, the city provided him with almost $4.5 million in incentives to acquire land in the 7-acre tract. Lelah missed critical performance deadlines and eventually defaulted on his contract.
In the end, Lelah’s LLC filed for bankruptcy and the city had to acquire the land back in foreclosure. Jim Schutze at the Dallas Observer tracked some of the deals and found that consultant fees jacked up the prices on the plots of land to the tune of hundreds of thousands of dollars. Councilman Scott Griggs, of North Oak Cliff, says the city has not recouped the money it invested.
Lelah ended the interview after we began discussing Patriots Crossing, upon learning I was recording the conversation. “Patriots Crossing is 10 years old. What relevance would it have?” he said.
Griggs has long been an outspoken critic of the Patriots Crossing deal and its outcome.
“I’m not comfortable granting him any entitlements—zoning or monetary,” Griggs said. (Lelah has not requested city money for the townhome project.) “$4.5 million in cash is a lot of money to taxpayers, and he literally dropped off the edge of the earth while we were trying to find him. Now he’s back. I don’t think taxpayers in the city of Dallas want to do business with people like that.”
The location is in District 7, represented by Councilman Kevin Felder. In an interview Tuesday night, Felder said he only learned earlier in the day that Lelah was behind the deal. The councilman expressed concern that that detail had slipped past the district’s planning commissioner, who was appointed by Felder’s predecessor but resigned last week.
“It’s disturbing to me. I don’t like the fact that, from what I’ve read, that this guy basically bilked the city out of $4.5 million,” Felder said. “My planning rep should’ve done his due diligence and I’m not happy about that. But be that as it may, it is what it is. It’s now on my desk, it’s now in my control. I will not allow it to go forward tomorrow.”
Earlier this month, Lelah received approval from the City Council to rezone a similar plot near Belt Line and Seagoville roads in District 8. Like this one, the request had the support of the City Planning Commission. His company, Next Stop, LLC, has purchased eight plots of land throughout southern Dallas since 2016, about a year after the city recouped the Patriots Crossing land in foreclosure. The plot he hopes to rezone was most recently appraised for $15,000. Lelah says he believes the city should allow him to do his business, that Patriots Crossing is in the past, and he’s moving forward with his new developments on his own.
The plot is in a blighted part of town, even though the city’s Market Value Analysis—the guiding document for Dallas’ housing policy—rates the specific plot as an “H,” which is the second lowest designation. That basically means the city, if it were following its own policy, wouldn’t give the thing a dime because it would further concentrate poverty. But this is a private development. It also raises questions about the housing policy’s influence on residential rezoning requests like this one. Lelah, meanwhile, maintains he should be able to do what he pleases with the property, since his company owns the land.
“We’ve done everything that we’re supposed to do correctly and it has not much to do with anything else,” Lelah said Tuesday. “It’s a little project.”
On Wednesday afternoon, we’ll see whether the City Council agrees.