|October 13, 2017||Comments Closed|
The downtown Tax Increment Financing Zone board recommended a total of $1.4 million of tax-supported incentives Thursday for three projects, including the new Waco Hippodrome annex and the five-story Stratton Building across the street.
Stratton Building owner Peter Ellis received the nod for $1 million for a $5 million project to turn the long-shuttered furniture store into an art space, pub, retail cluster and loft apartment complex.
Shane and Cody Turner received approval for $226,112 for a $3 million expansion of the historic Hippodrome at 724 Austin Ave., which will add three theaters, a new dining space and a rooftop patio.
Jed Walker of Walker Partners received a recommendation for $179,129 for the ongoing renovation and expansion of the long-defunct Pioneer Savings building at Washington Avenue and Ninth Street. It will house the headquarters of the 75-employee engineering firm, plus a 25-person office of New York Life.
The TIF board oversees a taxing district that collects a portion of property taxes in downtown and reinvests them as public improvements and business incentives. The board’s recommendations must be approved by the Waco City Council.
The TIF board got a tour of the projects Tuesday before the meeting, starting at the slab at the Hippodrome site, which is already under construction. The Turner brothers said the new addition would feature murals of long-gone Waco movie theaters and celebrities of Central Texas.
“I feel like it will be a good tourist attraction where people will want to take selfies and put them out on the internet,” Cody Turner said.
The brothers said the current configuration of the Hippodrome limits its efficiency and programming flexibility. The third-floor kitchen is too small to serve the restaurant and the dine-in moviegoers, so a larger kitchen is being built on the ground floor that will serve a new ground-floor dining area.
In addition, the Hippodrome has had limited use of its main historic auditorium because of film studio requirements to keep blockbusters playing for several weeks. With the addition, the theater can move those films onto the new screens to make room for concerts and comedy performances.
Cody Turner said the Hippodrome will start offering concerts at least monthly, starting with Jerry Jeff Walker and Larry Joe Taylor in early spring 2018.
“Once we start having (concerts) more consistently, we will become known as an incredible concert venue,” Cody Turner said.
“It’s a game-changer for the Hippodrome,” Shane Turner said.
“Thanks for preserving this and making it better,” said TIF board member Susan Cowley.
The TIF funding will be used for facade work, utilities and streetscape.
Peter Ellis said his building across Eighth Street will also bring people downtown, including some who will live there.
Ellis bought the five-story Stratton Building in 2014 from the Business Resource Center, a sister organization to City Center Waco. He plans to use historic preservation grants to help restore the 1924 building and create 15,355 square feet of commercial space and 27 loft units upstairs.
The plans call for cutting out a section of the first floor to expose a basement-level pub and bistro that will be visible from the street.
The TIF board last month postponed a decision on Ellis’ application because of a question involving how the property would be appraised. Normally, TIF applicants agree to forfeit all their TIF incentive if they try to lower their property value in the first few years after completion.
Ellis argued that the project would be only worth $2.5 million after he put $5 million into it, and he originally balked at the idea of accepting $5 million as the protest threshold, saying the historic preservation work wouldn’t increase the building’s financial value.
City economic development director Melett Harrison said the gap in this case between the project cost and expected taxable value was unusually wide, and she recommended reducing the amount of the TIF award if the appraisal falls below $5 million.
Harrison agreed when TIF board member Ricky Turman asked if that requirement would set a precedent for future projects.
“My initial thought is that we’re changing our methodology midstream,” Turman said. “I like the idea, but it seems like this is what we should let them know on the front end rather than when we come to vote on it.”
But board member Malcolm Duncan Jr. said he wants to make sure the TIF is getting a good return on its investment.
“I have not seen a case when the estimated appraisal value is half of the construction value,” Duncan said. “That’s when we have to look at our investment.”
Ellis said he expects the project eventually will be valued at about $5 million, and he said the stipulation wouldn’t stop him from doing the project.
“The property is going to be very solid and it’s only going to increase in a normal market,” he said.
The TIF board agreed to fund the $1 million with the staff recommendation on appraisal protests.