La Gran Plaza

The Project

Urban Development Fund has provided $15.6 million in financing to facilitate the redevelopment of La Gran Plaza, a 900,000 square foot regional mall and a 85,000 square foot office building in Fort Worth, TX. The property is located in a census tract with a 24.9% poverty rate and where the median income is 58.9% of the area median income. The area is designated for redevelopment by the City of Ft. Worth, is located in a CDFI Fund Hot Zone, and is in an SBA Hub Zone. Previously known as Fort Worth Town Center, the property was constructed in 1962 and extensively renovated in 1987. It is one of the oldest regional malls in the community, and has a variety of stores. La Gran Plaza currently offers a variety of entertainment, including a food court, an 8-screen Latin cinema, and a popular dance club.

UDF’s financing will allow the new owners to redevelop the mall and office space to increase occupancy and to reposition the mall to better reflect the changing demographics of the area. The property, which is currently 52% occupied, is being repositioned as a Hispanic destination market place to accommodate the 79% Hispanic population in the area surrounding the project.

The project is being supported by the City of Fort Worth. The city has committed to providing up to $45 million in financing as well as an Economic Development Incentive (EDI). As a condition of the EDI, the borrower will be having at least one-third of the property improvements performed by minority-owned businesses.

The city of Fort Worth has recently approved the addition of a bus transfer station on land donated by the project sponsors to facilitate access by local residents.

Project Financing

UDF provided a $15.6 million interest-only loan for the redevelopment of the project. Using New Markets Tax Credit financing allowed UDF to provide a below-market interest rate and other flexible features including: higher than standard loan-to-value, more flexible borrower credit standards, and lower than standard debt service coverage ratio.

Total project costs are $42.5 million, and project redevelopment costs are estimated to be $26.6 million. Additional financing is being provided by conventional sources and through local subsidies including tax increment financing.

Community Impact

The redevelopment and repositioning of La Gran Plaza will help to retain the retail jobs currently at this location as well as creating over 2950 new jobs for employees of the new tenants. The redevelopment and lease-up of currently vacant space will increase property and sales taxes collected from the property.

The property will receive significant improvements to both the interior and exterior. In addition to general improvements in the structure, the project sponsors intend to add an arena space that will host rodeos and other events popular in the surrounding community and an entertainment facility that will be available to host wedding, banquets, and other local events. The redevelopment will expand the Fiesta grocery store, a popular Hispanic grocery store, as well as leasing space to other retailers that primarily serve the Hispanic community surrounding the mall. This will provide much needed retail space providing goods and services in a community which lacks significant retail development.

This property will also create new opportunities for low-income residents of the surrounding community. One of the mall’s anchor spaces will be converted into a Mercado space that is expected to house over 300 local entrepreneurs and small businesses. This space is expected to provide opportunities for local
residents to operate a small business at reduced cost. The development of this
space is made possible by the flexibility of NMTC financing. The lease structure
and uncertain occupancy of this area would have made obtaining conventional
financing nearly impossible.