The city of Dallas and the U.S. Department of Housing and Urban Development reached an agreement Wednesday in a housing discrimination case that had threatened to cost the city tens of millions of dollars.
Dallas will not have to pay the federal agency or the developers who in 2010 accused the city of discrimination when it refused to subsidize the redevelopment of a downtown high-rise, according to the terms.
“The city admits no wrongdoing, pays no money to HUD, and gives no relief or money to 1600 Pacific Building, LP,” the city said in a prepared statement.
City Manager A.C. Gonzalez said Wednesday night that the resolution shows that while there are “always improvements to be made, we have been a good partner with HUD and are helping to improve our housing conditions throughout the city.”
Gonzalez said had it not been for the resolution, the city could have been penalized “tens of millions of dollars.”
Dallas was told last year that the agency had found “a pattern of negative reactions to projects that would provide affordable housing in the northern sector of Dallas and that those decisions were inconsistent with the goals required by HUD program obligations.” The city challenged the agency’s findings and had requested a review of the investigation.
And in the agreement, HUD acknowledged that “some of its findings are incorrect,” the city said.
“In order to expedite just resolution of the matter and to avoid further administrative procedures or litigation over the remaining matters, the parties have agreed to enter into this agreement,” the agreement says.
“Once they had the information we were able to give them it is pretty clear they recognized that some of it was wrong,” Gonzalez said. “They could see we had good work programs, and we are working with them and we are on a path of continuing that good work.”
Under the agreement, Dallas will be required to continue developing its Neighborhood Plus plan, which focuses on neighborhood issues, and host a regional housing symposium.
Gonzalez and City Attorney Warren Ernst will also offer to City Council some modifications to the fair housing policy. Dallas must also present regular reports to the housing agency as evidence that it is not discriminating.
City Hall was accused of discrimination by developers Craig MacKenzie and Curtis Lockey, who in 2007 sought more than $100 million in government subsidies to redevelop 1600 Pacific. The refinished building would be worth $37 million with units as small as 375 square feet. The city’s Office of Economic Development denied the subsidies.
In 2010, the developers filed a complaint with HUD alleging that Karl Zavitkovsky, director of the city’s Office of Economic Development, told them “Downtown Dallas is not the right place for low-income housing,” and “low-income housing is not part of the vision for Downtown Dallas.”