Dallas’ landmark Cabana Hotel seeks city incentives for $116 million makeover

Developers who want to restore a historic hotel on the edge of downtown Dallas are asking the city for $41 million in incentives.

The long-vacant Cabana Hotel on Stemmons Freeway was gutted more than three years ago for a renovation. But restoration of the more than 60-year-old hotel across the highway from Victory Park never moved ahead.

Now Cabana Sycamore Development Inc. wants to refurbish the 10-story building into affordable rental units.

The project would deliver “160 multifamily residential units — 64 income-restricted units and 96 market-rate units,” according to the development agreement the City Council will consider at its meeting this week.

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The developers of the $116.3 million project are seeking funding 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.

“Rehabilitation and adaptive reuse of the former Cabana Hotel has been anticipated to be a catalyst project for the southern part of the Design District,” according to the council agenda. “To date, 3,041 residential units have been completed or are under construction in the Design District TIF District; however, only 63 units (2%) are income-restricted.”

The Cabana redevelopment includes removing part of an existing parking garage, adding new construction and opening up the back side of the hotel along Slocum Street to create better pedestrian connection.

Sycamore Strategies also has been working on an affordable rental community called Cypress Creek at Forest Lane in Dallas’ Lake Highland area.

The Cabana Hotel was built in 1962 by Las Vegas hotelier Jay Sarno, who developed the landmark Caesar’s Palace. Originally called the Cabana Motor Hotel, the property hosted a parade of celebrities from the Beatles to Led Zeppelin and Richard Nixon in its heyday.

The Cabana was closed to guests 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 as a hotel in a project estimated to cost $100 million. But the redevelopment plan stalled.

Davidson Bogel Real Estate has been marketing the historic high-rise for sale.