The Waco City Council on Tuesday heard two proposals for developing city-owned land around Heritage Square downtown, one of which envisions a public-private partnership that would create 550,000 square feet of office space, 100,000 square feet of restaurant and retail uses, an urban park and a 1,200-space underground parking garage.
Industry professionals with expertise in land use, community development, and marketing have formed a team called The Civic Center, whose plan for Heritage Square and nearby downtown properties would have a $1.5 billion economic impact on the local economy and create 9,000 new jobs over 10 years or more, said Chris McGowan, a Waco urban planning consultant who is spearheading the group’s office-heavy efforts.
“Economist Ray Perryman has said Waco is the next great city in Texas, and we agree,” said McGowan, adding Heritage Square represents an ideal hub for taking downtown to the next level.
Meanwhile, Ed Kinkeade, a federal judge and Baylor University alumnus, joined his son, Brad Kinkeade, in touting a venture called Heritage Crossing that would place chef-managed restaurants, boutique retail, a specialty grocery, office space and shaded community gathering space on property between Washington and Austin avenues and Third Street.
The project also would feature a memorial dedicated to the May 11, 1953, Waco tornado that devastated much of the central city, a trolley stop, a rooftop getaway for relaxing and dining and space for food trucks.
Waco City Manager Dale Fisseler said the city has reviewed the proposals and recommends the pursuing a development agreement with the group backing The Civic Center project. But he said he thought so highly of both proposals he wanted the council to hear details of each.
“We requested proposals for Heritage Square in 2015, and received no offers,” he said. “This time we received two of high quality.”
Negotiations between the city and the prospects now will proceed, and could last months, Fisseler said. Topics for discussion likely will include incentive packages the winner will request.
Addressing the desire by many for a grocery store downtown, and skeptics who wonder if there is yet enough demand, Ed Kinkeade said, “We have spent an enormous amount of time with representatives of high-end grocery names. We will bring a specialty grocery to that space, I guarantee it. I traveled 4,588 miles from Scotland to tell you that today.”
McGowan said the group backing The Civic Center proposal has prepared a long-term plan that envisions up to 1 million square feet of Class A office space taking shape downtown. He said studies have shown there is a critical shortage of such space to bolster efforts by the Greater Waco Chamber of Commerce to attract new business that would hire young professionals and keep college graduates in Waco.
“We do not know what calls we are not getting because we don’t have the requisite office space,” McGowan said. “We can keep young people here for a couple of years after they leave college, but when they begin to crave advancement, moving up the ladder, we often lose them.”
He said he believes there is local demand for 100,000 to 150,000 square feet of Class A space, and has received assurances from brokers of office space that Waco could receive “spillover” from Dallas and Austin, where existing office complexes are brimming due to high demand.
“Office space in Dallas has become build-to-suit, and most is three years out,” said Phillip Williams, a Dallas-Fort Worth real estate veteran and part of The Civic Center team. “The brokers I’ve talked to don’t even bother with clients up there who need less than 100,000 square feet. But they can sell 20,000 to 50,000 square feet in Waco all day.”
Waco Mayor Kyle Deaver thanked both groups for their proposals, but during a question-and-answer session he questioned projected demand for Class A office space in Greater Waco. He said the notion there is local demand for up to 150,000 square feet “does not excite me because that’s just moving people from one place to another, which could serve as hardship for those landlords losing tenants.”
He also described as “a leap of faith” the projection that spillover from Dallas and Austin would fill new office accommodations in Waco.
“I don’t want us to get ahead of ourselves,” said Deaver.
The mayor, in an interview after the work session, said he was impressed with both presentations and now the public and downtown stakeholders will have the opportunity to express their thoughts on each.
He said he expects the group proposing The Civic Center concept to request funding from the city for infrastructure improvements, including construction of the underground parking facility.
Councilman John Kinnaird said his mind remains open about the respective proposals, and he looks forward to receiving public input.
“I asked the council to give me an indication of which way it is leaning in a couple of weeks,” Fisseler said after the meeting. “The staff has made a recommendation, but obviously the council has the final say.”
During the presentation of proposals, Williams said Waco does not have to rely upon “spillover” from other cities to fill more than half-a-million square feet of office space, and that its quality of life could prove persuasive to young professionals and the companies that provide jobs.
“The cost of quality housing and the cultural advantages of having a major university work in Waco’s favor,” Williams said. “And you have to remember that it takes just as long or longer to drive from Frisco to Dallas-Fort Worth International Airport than from Waco to DFW. Time is money.”
A 15-story, 300,000-square-foot office tower would anchor The Civic Center concept, said McGowan, who added construction would begin about two years after a land development agreement is reached with the city. The group would spend that time installing utility infrastructure to support construction of at least three office buildings and a commercial center.
Kinkeade said the Heritage Crossing development would include 33,000 square feet of “creative” office space that features open areas for the sharing of tasks. The grocery store would occupy 10,000 to 20,000 square feet, and the public would have access to on-site parking.
“Our project is fully funded; the banks are ready,” Kinkeade said, adding he would ask only that Waco provide the land. “We are not seeking additional incentives, though the retailers may require assistance.”
McGowan assured council members The Civic Center development is self-contained, and will prove viable even if improvements are limited to the three office buildings, the park and the retail/restaurant complex, and long-term additions of office space and retail do not materialize.
“But our goal is to revitalize the entire north end of downtown,” said McGowan, who declined to estimate the cost of creating The Civic Center, saying so much of the project “remains conceptual.”
During its regular meeting Tuesday evening, the council approved a lease agreement with the Bureau of Alcohol Tobacco Firearms and Explosives for space in the Waco Police Department headquarters adjacent to the old Hillcrest Baptist Medical Center complex in North Waco.
The council also heard a report on tax rolls certified by the McLennan County Appraisal District and will discuss their possible impact on the city budget during meetings in August, Fisseler said.