The Dallas Housing Finance Corp. board has given its initial support to an agreement that could lead to the demolition of The Baxter apartment complex.
Elías Valverde II/The Dallas Morning News
An apartment building in far northeast Dallas has shown signs of financial distress for years. Now, officials are moving to tear it down.
The Baxter, an apartment complex at 9737 Forest Lane in the Lake Highlands area, has gone through foreclosure, ownership changes and has told its residents to move out.
In what could be yet another change for the property, on Aug. 11 the Dallas Housing Finance Corporation, or DHFC, board gave initial support to an agreement that could lead to the demolition of The Baxter and make way for a park.
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The potential changes to the apartment complex are forcing residents to move and are showing how apartment owners and the city are trying to address multifamily density in neighborhoods where apartments are distressed.
Before the agreement is officially approved by the board, funds for the purchase and demolition of the building will need to be secured. The plan will also have to be approved by Dallas City Council.
Moving out
The day before the meeting, residents of The Baxter were told in an email they could either transfer to a sister community or have 30 days to vacate.
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During the board meeting, Ellis said the apartment’s owners were working to move out residents of The Baxter and relocate them to four other properties with the same ownership, collectively called the BX5 Portfolio.
Voya Investment Management, the current owners of the portfolio, declined to comment on a previous story about The Baxter and did not respond to additional questions.
One resident, Jo Summers, previously told The Dallas Morning News she had relocated to one of those properties. Summers said The Baxter was fairly full when she moved in, but people have steadily moved out. She said she has also seen the quality of the apartments decline.
“I understand why they’re shutting it down,” Summers said as she was moving out. “I mean, healthwise I don’t even want to be in that apartment anymore. I just couldn’t afford to not be in it.”
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Toby Toler, a lifetime resident of the area and property tax consultant, said he used to know a lot of young professionals that lived in the complexes near Forest Lane.
“When they were first built they were lovely, manicured and well maintained and the entire complex was a different stripe than it is today and so we’ve known those complexes every step of the way,” Toler said.
Toler said he has heard concerns about how tearing down The Baxter could impact the taxable value in the area, but said he’d rather see a change.
“It’s a little too dense,” Toler said. “There needs to be a little space. I’m not opposed to a park or taking a few units out.”
Signs of financial challenges
The notice telling residents to move followed a series of changes to try and financially support the apartments in the BX5 Portfolio.
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The first sign of financial trouble came when the apartments’ previous owners attempted to get a property tax exemption, but a new state law and the appraisal district’s denials prevented them from doing so.
The owners then defaulted on a $120 million loan and portfolio ownership was transferred to Voya, the issuer of the loan. The apartments had been owned by Fundamental Partners. Part of the portfolio’s challenges could be attributed to competition in an apartment-heavy area.
The Baxter apartments face possible demolition.
Elías Valverde II/The Dallas Morning News
There are about 6,000 apartments within a few blocks of the portfolio, David Ellis, president of the DHFC, said during the board meeting. During periods of economic downturn, landlords struggle to find renters amid competition.
“Every time we’ve had these downturns there’s never been a real solution,” Ellis said. “There’s never been anything that we could do about it. They go to rent. They go to foreclosure. They hit a zombie state with the lenders.”
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As rents drop and owners offer concessions, apartments are making less money which could make paying a loan on the deal more difficult, Ellis said in an interview about the area. If the loan’s interest rate isn’t fixed, payments could become more expensive, he said.
“So now you’re struggling and you get distressed,” Ellis said. “And so now all the cash flow isn’t going towards the property. It’s just going into your debt service. And you’re spending money on the deal. You’re not operating it right. You’re cutting corners.”
Road to demolition
Demolishing the property is an attempt by the DHFC and Voya to improve the other properties in the portfolio.
If approved, Voya would sell The Baxter to the DHFC, for a loss, Ellis said at the meeting.
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The loss is the risk Voya is taking to increase the value of the other four properties and get a partnership with the corporation, he said. The corporation would then provide an equitable title partnership to Voya for the remaining four properties, providing a full tax exemption, according to board documents reviewed by The News.
The funds for the purchase and demolition of The Baxter will be primarily provided by the Skillman Corridor Tax Increment Financing District, Ellis said. Other sources will also be explored by the board.
The Baxter apartments pictured, Thursday, Aug. 13, 2026, in Dallas.
Elías Valverde II/The Dallas Morning News
After the demolition, the corporation will give the approximately four acres of land to Dallas Park and Recreation. The land is next to the existing Audelia Urban Park.
The mission of the corporation is to create safe, sanitary and decent housing at affordable levels, Ellis said. He said this deal is solving for a safety and sanitation issue, but not necessarily an affordability issue.
In order for the agreement to be enacted, entities like the Skillman Corridor TIF Board, the Lake Highlands Public Improvement District and City Council have to approve. Ellis said he’d like to have approval from the City Council by the end of the year, but it could be early next year.
After the meeting, Ellis said the corporation was not prepared to make any additional statements about what would be happening to the property.