|September 15, 2017||Comments Closed|
The Brazos Commons riverfront project won Tax Increment Financing Zone board approval Thursday for a $7.9 million public investment to aid the proposal for an 11-story full-service hotel, retail space and 400 residences.
Partners Joe Beard and Rick Sheldon plan to start late next year on the $129 million mixed-use complex between Clifton Robinson Tower and the city-backed Brazos Promenade project, now underway.
Beard said Thursday this project is a smaller but better version of the ambitious development the partners originally had proposed doing with the city a few years ago, until ballooning costs caused them to withdraw in 2014.
“We finally have a plan that works,” he said in an interview after the unanimous TIF vote. “The scope has come down. It’s right-sized.”
Still, Brazos Commons promises to be the biggest private development in downtown, exceeding in building size and cost the neighboring Brazos Promenade.
Front and center would be the 160-unit Drury Plaza Hotel, which would include an 8,000-square-foot conference center, restaurant and garage parking.
Following its usual custom, Drury Hotels will finance, build and own the hotel, said Brian Nenninger, director of real estate acquisitions for the family-owned chain. That’s an unusual business model in an age when most hotels are franchised or individually owned with a license to use a brand.
Drury has another of its upper-echelon, full-service Drury Plaza locations on the San Antonio Riverwalk.
“This is not a typical suburban or semi-suburban development,” Nenninger told the TIF board. “This is mixed-use, dense development, and we want to make it very walkable.”
The TIF board makes recommendations on a downtown economic incentive fund that comes from a portion of property tax revenue from downtown properties. Its recommendations must be approved by the Waco City Council.
Because the TIF fund has been running low with the surge in downtown development, the TIF board agreed to fund the $7.9 million incentive over a term of several years.
City Center Waco, the downtown organization that scores projects for TIF funds, gave the Brazos Commons a top score.
“We think a lot of this project,” said Megan Henderson, City Center Waco executive director. “We find that it balances in important ways the Catalyst project (Brazos Promenade) and pulls people to the river and creates connectivity.”
Catalyst Urban Development is waiting for a city site cleanup to start work on a $100 million development centered around the Waco Downtown Farmers Market site, with public recreation, a 110-unit hotel, destination restaurant, retail and housing.
Catalyst President Paris Rutherford was at the TIF meeting Thursday to get approval for a phasing adjustment that he said won’t alter the timeline of his project. Rutherford said he welcomes the Brazos Commons project.
“We’re big believers in how that district needs to have multiple people involved,” he said. “It’s all about planting seeds.”
Of the $7.9 million contribution to the Brazos Commons project, $2 million is earmarked for the city of Waco to use in working with Oncor Electric Delivery to relocate transmission lines that cross the river between the two riverfront developments.
The TIF board saw a video Thursday showcasing some of the major projects Beard’s company, Westdale, has undertaken.
Those projects include about 350 units of warehouse lofts in the Deep Ellum district of Dallas, as well as the 4,500-seat entertainment venue in that district known as The Bomb Factory.
The company is also developing a large boutique hotel, multifamily and office complex in Deep Ellum known as “The Epic.”
“We’re the largest property owners in Deep Ellum,” Beard said.
He hopes ultimately to develop more than 2,000 residential units in that area.
He said Westdale, started in 1991, has $4.5 billion in assets, including more than 200 multifamily projects in 30 cities.
Beard, a Waco resident who commutes to work in Dallas, said the partnership intends to be the long-term owner of the Brazos Commons.
Also Thursday, the TIF board postponed a decision on a $1 million request from Stratton Square LLC for the historic restoration of the Stratton-Stricker Building at 800 Austin Ave. TIF board members wanted more information from the city staff and applicant on how to estimate the taxable value of the final project.
Developer Peter Ellis intends to create 27 residential units in the upper floors of the five-story building, with 15,355 square feet of commercial space on ground floor, mezzanine and basement levels.
Plans call for a basement pub visible from the street, as well as a soaring art space and cafes and shops in the mezzanines. The project would also create a rooftop terrace.
Ellis is getting almost $1 million in federal historic preservation tax credits to renovate the former furniture store, which was built in 1923 and is on the National Register of Historic Places.
Ellis bought the building several years ago from the nonprofit Building Resource Center, a sister nonprofit agency of City Center Waco.
“This is the last vacant building of that size,” Ellis said. “It has a panoramic view of the Silo property, the river and City Hall area. … It’s in rough shape. This building needs a lot of investment to bring it back.”
The TIF board supported the project but raised questions about the future tax revenues it would generate. TIF contracts require the applicant to promise not to seek to lower the tax value beyond the original estimated value of the completed project. Ellis wanted to peg that threshold at $2.5 million rather than $5 million, citing the historic preservation work that wouldn’t increase the value of the building.
But TIF board members said they want to ensure the property brings in its share of tax revenues to the TIF zone.
In other business, the TIF board recommended $153,810 to Magnolia Silos for sidewalk, streetscape and drainage improvements associated with a new 194-space parking lot at 400 S. Eighth St.
Magnolia this spring bought the 1.5-acre site next door to the Silos to alleviate a parking crunch around the tourist attraction. The parking lot, which will be open to the public, is expected to cost $1 million, with a March completion date.