Friday, December 16, 2016

Developer of historic downtown tower redo plans to sell city subsidies



Developers of another historic building project in downtown Dallas say they plan to sell the city's economic development incentives in a special public offering.
Investor John Kirtland is redeveloping the landmark Tower Petroleum Building on Elm Street and the adjoining Corrigan Tower on Elm Street into a combination of luxury hotel rooms and loft apartments.
Developers of another historic building project in downtown Dallas say they plan to sell the city's economic development incentives in a special public offering.
Investor John Kirtland is redeveloping the landmark Tower Petroleum Building on Elm Street and the adjoining Corrigan Tower on Elm Street into a combination of luxury hotel rooms and loft apartments.
The city of Dallas is supporting the repurposing of the two vacant buildings with almost $20 million in tax increment finance district subsidies.
Kirtland's PetroCorrigan Towers LP plans to sell $20 million in bonds backed by the city's TIF commitment, according to filings with Dallas' Economic Development Committee.
If the deal is approved, it would be the second such large public sale of city incentives pledged for the redevelopment of a downtown project.
Developers who are renovating the historic Statler Hotel downtown sold bonds earlier this year backed by $46.5 million in city TIF subsidies for the project.
"After we heard about the first one with the Statler, we knew it would only be a matter of time until others sought this form of creative financing," said John Crawford of Downtown Dallas Inc. "It provides a unique way of getting more projects over the finish line that does not change the rules in terms of payout and risk for the city and continues to add to the growing tax base and revitalization of downtown."
The public debt offering was made through the State of Wisconsin Public Finance Authority, the agency that plans to issue the bonds for the Tower Petroleum and Corrigan Tower projects.
Sale of the tax-free bonds allows developers to access funds that wouldn't be provided from the city's tax increment finance for years.
Developers also typically sell the historic tax credits for these projects to help finance the renovations.
Dallas' City Council must approve the TIF fund sale.
The TIF subsidies paid from downtown property taxes won't be available to the developer until after the project is completed and are distributed over time.
Earlier this year, Kirtland started construction to convert the 17-story Corrigan Tower at 1900 Pacific Ave. into an apartment community. The 64-year-old high-rise will feature 149 apartments.
Steve Brown/Dallas Morning News