Fort Worth tax district grants $5.334 million incentive for Sinclair, Sanger Bros. projects
April 23,2015
Merriman Associates rendering
Reposted from Fort Worth Business Press
Fort Worth’s Downtown tax increment finance district board on Wednesday approved a $5.334 million incentive to related groups that plan to renovate the Sinclair and Sanger Bros. buildings downtown.
The board voted unanimously to approve the incentive for the projects on the neighboring buildings. The Sinclair owners plan to convert the 512 Main St. building into a 160-room Marriott Autograph Collection hotel. The group that owns the Sanger Bros. building, which once housed Color Tile’s headquarters, plan facade and streetscape improvements, ground-floor retail, one floor of meeting and banquet space that connects to the hotel by skybridge, a spa, and potentially office remodeling, conversion of some empty space to house data centers, and conversion of more space for hotel services.
Under the TIF agreement, minimum investment for the Sinclair is $32 million, but the owners can lower that amount 10 percent by value engineering. Minimum investment for the Sanger renovation is $20 million.
Andy Taft, president of the Downtown Fort Worth, Inc. economic development nonprofit, thanked the TIF board for approving the incentive. “It’s going to be very exciting,” he said.
Payments on the incentive would begin after the ownership groups complete the first and second phases, required by Dec. 31, 2017 and Dec. 31, 2018.
The third phase of the Sanger renovation, including the office, data center, and service area improvements, is still coming together, Farukh Aslam, a minority owner in the ownership groups, said. The incentive for Sanger’s third phase is $1.575 million of the total $5.334 million.
Tentative plan for the third phase includes remodeling of 18,000 square feet of office space, conversion of currently empty space into 16,000 square feet of data center space, and conversion of 8,000 square feet of space for hotel services. Failure of the third phase would not affect the incentives for the first and second phases.
Aslam said the third phase plan is malleable because it’s not clear the owners will be able to add enough power to serve another 16,000 square feet of data center space. Data centers are already the primary tenant in the building.
“We’re working with Oncor on adding power,” Aslam said in an interview. “We may be limited.”
In order to receive the incentives, the owners must also secure state and federal historic rehab tax credits, and complete the renovation of the former Hilton Annex nearby. A third related ownership group two weeks ago won an incentive agreement from Fort Worth’s Lancaster tax increment finance district that requires completion of the Sinclair and Sanger projects.
That group plans to renovate the Hilton Annex into apartments. A garage in the building would serve Sinclair’s hotel patrons.
Additionally, under terms of the TIF agreement, the Sinclair project must create 100 permanent jobs, and 25 percent of construction costs must go to Fort Worth minority and women-owned businesses.
The TIF incentive for the Sinclair project is $3.46 million, for environmental, streetscape, and exterior improvements.
The TIF incentive for the $3 million Sanger first phase, which includes ground-floor retail and the meeting and banquet space, is $300,000 for facade and street improvements.
Sanger’s second phase includes a one-floor spa that would serve the hotel’s guests. The estimated private investment in the second and third phases is $17 million.
The TIF would pay the incentives in six annual payments.
Scott Nishimura