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Real Estate Forward

Birchway Denton Phase III

Denton, Texas

Birchway Denton Phase III is poised to set a new standard in urban living in Denton County, Texas.

ESTIMATED VALUE:
$126 million

LEAD ATTORNEYS:

OTHER TEAM MEMBERS:

STATUS:
Under construction, completion estimated November 2025

Greystar—one of the most recognizable developers in the country—together with certain equity partners, is constructing the project now, which is estimated to wrap up in November 2025. Birchway Denton Phase III is a massive project for the city of Denton. The project will include a Class A, garden-style, 336-unit apartment complex that comes along with a clubhouse and swimming pool.

Overall, this project will greatly impact the city in terms of affordable housing. A total of 168 units will be considered affordable family units, meaning they’re reserved for families earning well below the area’s median family income. The affordable nature of the units allowed the developer to structure them under Chapter 392 of the Texas Local Government Code. When structured correctly, Chapter 392 grants the project a full abatement of both ad valorem and real property taxes, as well as sales taxes incurred during construction.

However, achieving this structure required the intricate legal maneuverings of Chapter 392, and that’s where Winstead came in to help. As the lead corporate and real estate counsel for Greystar, Winstead handled the fine intricacies of Chapter 392 and ensured the project qualified.

To qualify for the abatement, a public facilities corporation (PFC) (a nonprofit corporation created by a housing authority) must own the fee title to the land. It then leases the land back to an entity jointly owned by the developer and the PFC.

Navigating the Chapter 392 structure complicates all aspects of the transaction, including construction debt liens and remedies, as well as the positions and rights of other capital and equity partners. It also introduces several specialized documents into the negotiations, such as the PFC Lease and the corporate documents with the PFC. The complexity of such requirements can be daunting to developers who are unfamiliar with that process. However, Winstead’s deep bench of attorneys experienced in public facilities corporations and Chapter 392 was able to streamline it.

Winstead was able to help Greystar handle the potential legal challenges and keep the project moving on track. The project will provide much-needed affordable housing in the city of Denton, and its success in navigating the complicated Chapter 392 framework is a real testament to the experience and commitment of the legal team at Winstead.