Thursday, July 10, 2014

Exclusive: Turkish developer lands historic tax credits for 211 N. Ervay

One of downtown Dallas' historic buildings has landed some tax credits for a redevelopment that is expected to cost upwards of $17 million upon completion.

The historic tax credits were an important element in making the redevelopment of the 18-story tower at 211 N. Ervay financially viable, Turkish developer Mike Sarimsakci told the Dallas Business Journal in an exclusive interview.

"We wanted to keep the aquamarine structure intact," Sarimsakci told me. "If you don't have these programs and there's no financial incentives to redeveloping these buildings. This is one of the few mid-century modern buildings left in downtown Dallas."

A number of developers have been flocking to Dallas' central business district, picking up historic buildings for significant multimillion-dollar redos. That's because the Texas legislature passed a state historic tax credit a year ago, which has made redeveloping some buildings in downtown Dallas — such as the historic Statler Hilton — financially viable, said Robert "Bob" Voelker, a lawyer at Munsch Hardt Kopf & Harr P.C.'s Dallas office.

"Before the Texas legislature passed the state historic tax credit there was just the federal historic tax credit," Voelker told me. "Now, combined with the federal tax credit, you can get 45 percent of your rehab costs back in credits, or free money at the end of the day."

The federal historic tax credits are 20 percent of the project, while the relatively new state tax credits are 25 percent of the rehab costs.

Sarimsakci said he could not disclose the exact amount of historic tax credits he's receiving for 211 N. Ervay, saying the final amount will come at the end of the year. He added he's expecting to pocket "a good chunk of cash" or about 36 percent of the cost of redevelopment after fees.

The redevelopment of 211 N. Ervay is expected to cost upwards of $17.5 million, he said.

Sarimsakci is readying the tower for its first office tenants in nearly two decades, which include Linking the World, the Health Wildcatters, and the Tech Wildcatters. The tower is being outfitted with ground floor retail, which includes a Turkish furniture store.

Voelker is also working on historic tax credits for the $85 million redevelopment of the former Butler Brother Building adjacent to Dallas City Hall, which Sarimsakci says he plans to begin construction on the massive building by the end of the month. Plans for the redo include two hotels, apartments and retail and restaurant space.

Candace Carlisle