The Dallas City Council agreed on Wednesday to pay $300,000 in taxpayer money to settle a lawsuit filed against the City for a deal made years ago.
The lawsuit was filed by developer Hamilton Atmos LP and nonprofit CitySquare Housing, which used to work with the City in developing housing for lower-income residents.
As KERA News reported, the City approved a deal in 2011 for Hamilton Properties to build “affordable housing” in downtown Dallas and redevelop a vacant site from Atmos Energy.
Hamilton then partnered with CitySquare Housing — a nonprofit that manages the real estate business of the anti-poverty organization CitySquare.
The redevelopment project would consist of transforming four buildings into a retail shopping space along with 230 apartments, the majority of which would be subsidized at lower-than-market rates.
Hamilton Atmos LP is a limited partnership formed between Hamilton Properties and Atmos Energy. The partnership was approved by the City Council.
The City agreed to pay up to $23 million to Hamilton Atmos LP after the aforementioned buildings were renovated and leased.
The $23 million of taxpayer funds would be taken from the Downtown Connection Tax Increment Financing District.
However, the City failed to make its payment to Hamilton and CitySquare Housing when it was expected in 2018 — several years after the Atmos Complex was redeveloped into Lone Star Gas Lofts.
“When our turn came up to get paid, the City didn’t pay us,” said John Greenan, the executive director of CitySquare Housing, as reported by KERA News.
City officials reportedly sent “three letters on the same day” explaining why the money was delayed, KERA News reported.
Lawyers representing Hamilton and CitySquare called these explanations “bogus defaults,” as per KERA News.
Hamilton attempted to get its payment from the City for more than a year but was unsuccessful.
Hamilton then decided to file a lawsuit, which CitySquare joined.
Greenan retired from CitySquare Housing last year but said he still does not know how or why the City decided not to pay them as they had previously agreed to.
“It was just not entirely clear to us what we were supposed to do,” he said, as reported by KERA News. He said the City took issue with the formula used to determine residents’ utility bills.
“The amount they said was incorrect on the utility bills was so small we offered to just pay it to the City or pay it to the residents,” said Greenan.
According to court filings, City attorneys attempted to avoid the lawsuit by citing “governmental immunity” and alleged that Hamilton “breached the agreement and has not yet cured the breach” without specifying how the agreement was broken.
At the beginning of 2020, mere months after the lawsuit was first filed, the City paid out $8.6 million to the developers, but that did not settle the lawsuit.
On Wednesday, the City approved another $300,000 to be paid to Hamilton Atmos LP and CitySquare Housing for their legal fees and additional interest because the original payment was delayed.
Councilmembers made no comments on the payment during Wednesday’s meeting.
The Dallas Express contacted the City for comment but received no response at the time of publication.