The historic Stockyards will be much more extensively developed than originally envisioned.
Fort Worth Heritage Development LLC’s latest plans for Stockyards development will include an investment of $630 million and the addition of 300,000 square feet of commercial space, 500 hotel rooms andy nearl 300 apartments. The company also envisions improvements to Cowtown Coliseum, Fort Worth Herd facilities and the construction of two underground garages.
The Fort Worth City Council was briefed at its June 11 meeting about plans for incentives for Fort Worth Heritage, the joint venture between Majestic Realty Co. and Hickman Companies, along with development partner M2G Ventures.
“This proposal is based on a proven framework to the original 380 agreement, which gave us the successful phase one development through that public-private partnership and that has exceeded financial expectations, and that’s to be commended,” said Carlos Flores, who represents District 2, where the Stockyards National Historic District is located.
Flores said the success of the Stockyards has created a parking problem in the area.
“Parking garages will resolve that and address that directly,” he said.
This incentive package would contain several major components from the city, subject to the developer’s performance:
- Annual grants of an estimated $71.6 million, based on 40% of incremental city property taxes, per a Chapter 380 economic development agreement.
- The city’s purchase of two underground parking garages as part of this development, at a cost of up to $126.2 million.
- Entering into a 30-year lease with the developer for the garages, with “purchase and put” options in place.
- Reimbursing up to $15 million for Cowtown Coliseum and Fort Worth Herd improvements, which will require the creation of a new Project Financing Zone for that area.
The development would be completed by the end of 2032, according to the presentation made to council.
Underground parking garages are three to four times more expensive than surface-level garages, according to Fort Worth’s economic development department. However, they also maximize the value of the site and allow the land at ground level to be used for new development and be more consistent with the historic look and feel of the Stockyards, according to a department report.
Total annual parking revenues from the garages is estimated at $12.88 million. Once complete, the parking garages are estimated to have a value of $175 million.
The city will eventually own the parking garages, but Fort Worth Heritage would build them as part of the project. The city will then lease the garages back to the developer for a term of 30 years with the developer’s annual lease payment to the city totaling up to 100% of the parking profits.
The city will receive a minimum of 50% of the parking profits at all times, and the remainder will cover the bond debt service as needed, according to the council presentation.
As part of the project’s second phase, the developer will make about $15 million in improvements to support the Cowtown Coliseum and the Fort Worth Herd.
Those improvements will include a new barn structure for use in the Fort Worth Herd operations, including horse stalls, steer pens, employee lockers and restrooms, utilities and storage, along with parking for Fort Worth Herd operations vehicles and equipment, such as trucks and trailers.
Those improvements to Cowtown Coliseum will require separate financing through a new Project Financing Zone, a tool used by Texas cities to collect tax revenue and use it to pay for improvements to convention centers and arenas. The zones have previously been used to fund Dickies Arena and improvements to the Fort Worth Convention Center. As part of the Chapter 380 incentive agreement, council will consider a proposal to create a zone around the coliseum.
Fort Worth Heritage originally planned for a three-phase project and the council voted on a package of incentives in 2014 consisting of annual grants of up to $67 million. The original plan for the second phase would have seen a total investment of $75 million and included two above-ground parking garages. That would have been supported by an annual reimbursement from the Stockyards tax district of up to $20 million.
However, the development’s first phase — the area around Mule Alley and Hotel Drover — was successful enough to increase the area’s land value to $225 million and draw 9 million visitors annually.
Under that earlier agreement, the city would still have 21 remaining annual payments. The new agreement, if approved by the council, would stop the Phase I payments and redirect those remaining incentives toward the second phase of the project.
“Stockyards Heritage is proud of the successful partnerships we established 10 years ago with the city of Fort Worth and Tarrant County,” the Fort Worth Heritage Development said in a statement.
The group said it would reserve further comment until the city’s formal actions are complete.
Mayor Mattie Parker said the development group’s first phase increased attendance and tourism significantly.
“You started at 3 million people annually, you’re now at 9 (million), which is pretty phenomenal,” she said. “We would not be here without the private investment that it took.”
Parker said that Phase II will be double the size in both space and investments from the private sector.
City Council members will likely vote on the proposal at their June 25 meeting and changes to the tax agreement will go to the Stockyards tax board in August.
Bob Francis is business editor for the Fort Worth Report. Contact him at bob.francis@fortworthreport.org. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.
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