A 9.3-acre development at 11th Street and Interstate 35 with two major hotels got favorable consideration Thursday for downtown Tax Increment Financing funds, but the TIF board put off the final funding decision until next month.
Developers Shane and Cody Turner asked for almost $4 million to help pay for utility lines, storm sewers, groundwork and about a mile of lighted, landscaped sidewalks that will support a construction project costing $32.6 million.
The Turner brothers, who are among downtown’s most prolific developers, spent seven years and $6.2 million assembling about 100 parcels between Cleveland Avenue and I-35 for the project. They now have commitments from developers of a La Quinta del Sol and an Aloft hotel to build side-by-side hotels with a total of 241 rooms, and they plan to develop five retail and restaurant buildings totaling 39,000 square feet.
The Turners said they want the development to have the same kind of pedestrian amenities as the heart of downtown, including 6-foot-wide sidewalks, antique-style pedestrian lights and street trees.
“Cody and I thought this was some of the most important property on the most traveled highway in Waco,” Shane Turner said. “Anyone going down I-35 is going to see this. It’s the gateway to Baylor and downtown and ties downtown to everything else.”
He said they would not have started the risky redevelopment without the hope of getting TIF support. The TIF fund uses a portion of tax revenue generated in downtown and the river corridor to help spur development in the same area.
As development has boomed on the downtown side of I-35 in the last couple of years, the TIF board has been less willing to incentivize development there. But city and City Center Waco staff said this project is a chance to build out a quality pedestrian network and replace obsolete utility systems in a chunk of downtown.
Assistant City Manager Cynthia Garcia suggested spreading the payments out over as many as six years to avoid draining a TIF fund that has already been depleted by a large contribution to the Brazos Promenade project.
Staff members said new tax revenue from the Turners’ development, called West Village, would pay for the $4 million incentive over about 5 years, and the Turners are willing to base the annual payments on actual tax revenue generated.
TIF board member Malcolm Duncan Jr. said he supports the idea of investing TIF dollars in public infrastructure such as sidewalks and utilities. But the Turners are also asking for items that strictly benefit the development, including $751,805 in site work, Duncan said.
“I don’t know that I buy that all this is public improvements,” he said.
The board asked the staff to come back in March with recommendations on the incentives and on how to structure the deal to ensure the hotels share responsibility for meeting TIF requirements.
The La Quinta del Sol, a higher-end La Quinta with four stories and 124 rooms, is scheduled to open early next year at 10th Street and Cleveland Avenue. The Aloft hotel at 11th and Cleveland would open later next year with 117 rooms and five stories. It will have large interior gathering spaces including a bar, with decor appealing to the millennial generation, hotel representative Shawn Trainum said.
The TIF was also set to consider a request for $365,245 to aid TFNB Your Bank for Life in development of a two-story building at Cleveland and Eighth Street, on a tract that the Turner brothers assembled. However, the TIF board ran out of time and postponed the item until its March meeting.