The runaway success of Magnolia Market at the Silos has caused city officials to consider giving another dose of funding from downtown Tax Increment Financing Zone fund to help build lighted sidewalks and bury overhead wires.

The TIF Zone No. 1 board last week recommended giving Magnolia another $650,000 in addition to the $208,376 the project previously received.

An unrelated project a few blocks away, the Altura Lofts at 214 S. Sixth St., also got its recommended funding bumped up from $349,710 to $570,358 to help pay for sewer lines and enhanced sidewalks, street trees, alleys and lighting. Both items will go before Waco City Council for approval April 5, with a final vote April 19.

Magnolia owners Chip and Joanna Gaines won TIF approval in October 2014 for what was supposed to be a more modest project. They were planning to spend $1.39 million renovating the old cottonseed mill at 601 Webster Ave. into a “Saturday Trade Day” location with some retail and office space.

Now, buoyed by the Gaines’ success on HGTV’s “Fixer Upper,” Magnolia Market has morphed into a retail-entertainment dynamo that draws about 20,000 people a week to downtown — and far more this month with spring break travel.

Magnolia officials told the TIF board they have spent $3.3 million on renovations, including corporate offices, an outdoor recreation and food truck space, a garden and a large retail space that spilled over into the old grain barn.

The company plans to open a garden shop in April and a bakery, called Magnolia Flour, in May, spokesman Brock Murphy said. The bakery alone will cost $284,283, according to a worksheet approved by the TIF board.

The Gaineses have said they would renovate the giant cottonseed silos in a second phase of the project and would ask then for TIF funds to improve sidewalks along Sixth Street.

But as Magnolia Market has emerged as a major Waco tourist destination in the past few months, city officials have urged the firm to expedite those improvements. The existing sidewalk is aged, cracked and narrow and inadequate for the heavy foot traffic coming into the complex.

“We want to put our best foot forward,” said Melett Harrison, city of Waco deputy director for economic development. “For people who have never seen Waco before, we want to make sure they come back again.”

The injection of $650,000 in TIF funds would create two blocks of wide sidewalk with street trees and antique-style lampposts from Webster Avenue to Mary Avenue.

From there, a new lighted sidewalk will be extended to Franklin Avenue as part of the second phase of the Franklin Place development, and another sidewalk across the street at Altura Lofts will be improved.

About $270,000 of the funding would be used to bury overhead utility wires to beautify the street and make future development of the silos easier.

“Ideally, we’d like to bury overhead lines all over downtown,” Harrison said. “It’s more pedestrian-friendly, it’s cleaner and prettier. The problem is that it’s also very expensive.”

The additional incentive brings the the total to $858,376, or 21.5 percent of the project’s total cost. In recent years, the TIF board has given between 5 to 15 percent of a project’s cost, depending on their score on a range of factors including economic impact, tax base creation and historic preservation.

But on rare occasions, the board has recommended larger percentages to projects that have special impact on the zone, such as the Waco Hippodrome on Austin Avenue and Lula Jane’s bakery on Elm Avenue.

Harrison said the Magnolia project exemplifies what TIF Zones are set up to do: turn blight into economic vitality.

“That was a really cool building, and they absolutely saw the potential in it where others did not,” she said. “Taking that old vacant building, which some would say was blight, and turning it into this kind of use, I think that’s a clear-cut case of achieving the goals of the TIF.”

Murphy, the Magnolia spokesman, said the company will continue to invest in downtown Waco.

“We are hoping it’s long-term demand, and we think it will be,” he said. “What’s important to us is the experience they get when they come. It’s not just a store. It’s a family gathering place, the food trucks, the lawn and the bakery. . . . We want to show them an amazing time and give them a reason to come back.”

The TIF Zone, which encompasses downtown, East Waco and the river corridor, funds development in the zone by earmarking the revenue from property taxes generated from improvements made since the zone was created in 1983.

The funds have been used for scores of other projects, from minor facade renovations to the $35 million contribution to McLane Stadium.

The Altura Lofts project won just less than $350,000 in incentives last September, less than half of the $874,000 that developers Shane and Cody Turner had sought.

The Turners are turning the five-story warehouse into 21 upscale two- and three-bedroom lofts with 25 underground parking spaces. Construction is well underway on the $6.4 million renovation of the 99-year-old building.

The TIF board’s additional recommended $220,648 in funding would help the Altura developers fund public improvements urged by city staff, including sewer line and manhole replacement, an expanded curbline and sidewalk on Mary Avenue, a concrete alley, and street lamps and trees.

Harrison said the additional work advances the pedestrian atmosphere of downtown and supports a project that will add urban living to the heart of the city.

Megan Henderson, who helps score TIF projects as executive director of City Center Waco, said downtown sidewalks are a patchwork of good and “crummy,” and the city is wise to use every opportunity to create a seamless sidewalk system.

“Associating them with a project currently going on is a smart way to get these blocks of sidewalks done,” she said.

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