The added residential space in the proposed Franklin Place development downtown might be just the thing to get more retail into the area, said some of those watching Waco’s real estate activity.
“I think they’re good if it’s a sound idea and if it’s a solid operator,” said Jason Attas, a Realtor with J.S. Peevey.
Demand for residential space and an improving business climate mean the project can be successful at least in the short term, Waco economist Ray Perryman said.
Franklin Place can work in the long term, too, but only if more business development occurs in the downtown area, he said.
A two-page summary of the project released by the city of Waco shows the development company, 921 Partners LLC, wants to build 145 rental apartments totaling almost 105,000 square feet. It would be on a block bounded by Franklin and Mary avenues and Sixth and Seventh streets.
The project would rise four stories and have gated parking.
Commercial and office space in the development would have room for 25 executive suites and restaurant space.
Four buildings are already on the property. Shane Turner, a partner in the project, said 921 Partners would make agreements with the businesses leasing space on the block, now owned by Hoppenstein Properties.
Joan McCartney, office manager for Hoppenstein Properties, said the property is under contract to be sold to 921 Partners.
The project is expected to cost about $18 million, with $9.3 million to come from a group called Prime One Capital and $5.2 million in cash, according to the summary released by the city.
The city’s Tax Increment Finance district board this week approved $2.5 million in property-tax benefits to be granted to Franklin Place after the project is completed.
Turner said the company hopes to begin building in August, but that it will have to clear a number of hurdles before that can happen, assuming the land sale closes.
The city council will have to approve the TIF funding decision, and the project will have to pass muster with zoning officials, Turner said.
Turner said he did not have any information about Prime One Capital, including where they are based, but that Prime One has committed to partially fund the project.
The city and economic development entities have been pushing downtown revitalization, trying to fill empty downtown buildings with shops, offices and living spaces. There has been some success, including the Austin Avenue Flats, a 49-unit development of mostly rental units.
Timing could be in 921’s favor, Perryman said.
Although unemployment is still high, economists and government authorities said the national economic recession is over, and recovery is underway.
A number of real estate projects around the state that were stopped three years ago now are going forward as the business environment improves, Perryman said.
Austin Avenue Flats is full and has a nine-month waiting list for its residential units, said David Wallace, chief executive of Wallace Bajjali Development, which owns Austin Avenue Flats and other downtown properties. Franklin Place would be a boost to the area, he said.
Though some new businesses have located downtown, a number of storefronts still are empty.
Wallace and Attas, who works particularly in downtown real estate, said they expect some downtown commercial spaces to be filled soon. Contracts are pending, and inquiries are coming in, Attas said.
To fuel the sustained growth in downtown, residential development needs to happen first, said Jim Peevey, who owns J.S. Peevey.