Dallas City Manager Kimberly Bizor Tolbert released an after-action report on April 18 detailing the city’s mishandling of the $29 million purchase and renovation of an office tower at 7800 N. Stemmons Freeway.

The 11-story building, purchased in 2022 for $14.1 million with an additional $14.9 million spent on repairs, furniture, and maintenance, was meant to house the Development Services Department and other city offices. However, it was shuttered in April 2024 after 39 fire code violations were discovered, including an inoperable fire alarm on most floors. Employees were relocated to the Oak Cliff Municipal Center, and the city continues to incur $73,000 monthly to maintain the vacant property.

The report acknowledges significant oversights in due diligence and planning.

“For such a large, impactful real estate acquisition, the City failed to be as thorough as it should have been and did not designate a clear project leader,” Tolbert wrote in the report. “This failure to properly evaluate the condition of the building before purchase put the City at risk and resulted in wasted taxpayer dollars.”

The report highlights a “surface-level review” by JLL Commercial Real Estate that missed critical deficiencies in HVAC, electrical, plumbing, and Americans with Disabilities Act compliance. It also notes a miscalculation of parking needs, with only 735 spaces available instead of the 1,400 planned, insufficient for the 934 employees and 383 city vehicles expected to use the facility.

“Combined, these factors indicate that the decision to purchase 7800 N. Stemmons Freeway was neither strategic nor well-considered. In retrospect, a more thorough evaluation of the building and its suitability for the City’s operational needs would have better positioned the City to make a more informed investment decision and mitigate long-term risks,” the report states.

Tolbert’s report, released ahead of an anticipated city auditor’s investigation, attributes the debacle to former leadership, including ex-City Manager T.C. Broadnax and former Development Services Director Andrew Espinoza, who are no longer with the city.

“The leadership responsible for the purchase, due diligence and renovations at Stemmons are no longer with the City of Dallas,” Tolbert stated in the report. 

In response to the fiasco, Tolbert announced reforms, including pausing real estate acquisitions unless approved by voters or the City Council, hiring a contractor to develop a master plan for the city’s 5,800 properties, and launching DallasNow, an online land management system, on May 5, 2025. This system will handle permits, zoning, and land use applications, eliminating the need for the Stemmons building.

The city plans to sell the Stemmons building to recoup losses, though bringing it to an occupiable condition would require millions more in unbudgeted funds.

Tolbert emphasized transparency: “Throughout my leadership as Interim and now permanent City Manager, I have mandated our team be open, honest and accountable to build trust.”