Dallas has given the go-ahead to turn a vacant landmark hotel into affordable housing.
The historic Cabana Hotel on the edge of downtown will be converted into 160 apartment units under a plan approved Wednesday by Dallas City Council.
The council voted unanimously to give builder Cabana Sycamore Development up to $41 million in economic incentives to support the project.
Sycamore Development’s Zachary Krochtengel said work on the project should start early next year. The redevelopment would include 64 income-restricted affordable rental units and 96 market-rate units, according to the plan presented to the city.
Sycamore Development has been working on the more than $116 million project for over a year.
‘We put it under contract in the fall of last year,” Krochtengel said. “It’s been a long process.”
The vacant Cabana Hotel on Stemmons Freeway was gutted more than three years ago as part of a planned renovation. But redevelopment of the more than 60-year-old hotel across the highway from Victory Park stalled.
Sycamore Development plans to repurpose the 10-story building with supporting funds from the Design District tax increment financing district. TIFs redirect property tax revenue in a designated area to pay for improvements intended to attract new private investment.
TIF funding has been used to help pay for most of the historic preservation and landmark building reuse projects in the downtown Dallas area.
Originally called the Cabana Motor Hotel, the Stemmons Freeway building was constructed in 1962 by Las Vegas hotelier Jay Sarno, who developed the landmark Caesar’s Palace. The hotel gained a celebrity following with guests including the Beatles and Led Zeppelin.
The hotel closed in the 1970s and later was converted into a minimum-security county jail.
In 2017, Dallas County sold the building to Farmers Branch-based Centurion American Development Group, which planned to restore the building. But the development plan stopped during the pandemic.
Davidson Bogel Real Estate has been marketing the historic high-rise for sale.