This downtown Fort Worth high-rise could become a reality, with a tax break
August 21,2019
See full Fort Worth Star-Telegram article by Luke Ranker here.
An apartment building that would be downtown Fort Worth’s first new residential high rise in nearly 30 years could be back in play with some tax breaks from the city.
Transwestern Development Company and MWG Enterprises will partner on a 19-story, 310-apartment tower at 1000 Weatherford on the northwest side of downtown. The project had been pitched earlier this year, but at one point was scaled back to a five-story mid-rise concept.
City economic development staff, however, wants to see the project move forward as a high-rise, and on Tuesday unveiled a tax incentive package designed to make high-rise residential investments more palatable for developers.
1000 Weatherford would span two city blocks between Weatherford and Belknap streets at Lexington Street. The spot is near the Trinity River and the Pier 1 headquarters and a short walk to the Sundance Square Plaza. A five-story building would take up the bulk of the block and include a parking garage and more than 200 apartments at roughly 860 square feet. The tower, in the middle of the building, would have larger apartments and amenities.
“The mid-rise element will be very nice units, probably for a younger demographic, and the tower will be for somebody who … wants more space,” Mark Culwell, the managing director of multi-family development for Transwestern, said in March.
Transwestern removed the tower from the concept in June, citing concern with the price of rents required to make a high-rise concept feasible. Culwell did not return an email for comment Tuesday afternoon.
City economic development staff see incentives as necessary to create a market downtown for high-rise living, said Michael Hennig, strategic development coordinator.
Though the Omni Fort Worth, built in 2009, includes condominiums, and the tornado-ravaged Bank One office building was transformed into the upscale condos of The Tower in 2005, city staff are calling 1000 Weatherford downtown’s first residential-only tower in nearly 30 years.
Interest has grown in downtown Fort Worth for years, but without a recent high-rise example, developers have been uneasy about taking a risk in the market, he said.
“So, what we have been left with for the time being are interested developers who are all looking around and waiting for someone else to take the risk of being the first one through the door,” he said in an email.
Meanwhile, the low-to-mid rise market has been preforming well. The trouble is those smaller buildings take up valuable downtown acreage without the benefit of dense populations, high-end amenities or significantly increased property values.
This 10-year incentive agreement requires the developers to commit to at least a 17-story, 300-unit rental residential tower built by Dec. 31, 2022. They must invest at least $75 million with at least 15% going to minority and women-owned businesses. At least 20% of the units must meet U.S. Housing and Urban Development affordability requirements.
But if rent and occupancy rates meet the developer’s expectations so well that the city’s investment is no longer needed, the city can drop out of the agreement at any time. It can also drop out if more than three downtown properties with at least 200 apartments have higher rental rates.
Failure to meet guidelines would result in the reduction of incentives.
The developer will receive reimbursement of up to 80% of any new city property taxes generated by the building with a cap of $4.5 million. The city expects to recoup its investment after 14 years.
The high-rise project would generate an additional $500,000 in tax revenue compared to the five-story alternative, Hennig told the City Council, but the mid-rise concept would not require a tax incentive.
Councilman Cary Moon took issue with the proposal, arguing tax breaks for residential construction, even downtown high-rises, didn’t fit with the city’s goals for job growth. The high-rise’s design does not include commercial space, and the apartment complex would staff only six.
The city should be looking at ways to expand commercial and industrial development instead, he said, adding that council had turned down incentives for other developers that were “night and day better” than the 1000 Weatherford plan.
Moon said he would support the mid-rise concept because it wouldn’t need tax incentives but would still promote downtown living.
“I’d rather take the bird in the hand than mortgage our future on this,” he said.
High-rise apartments fit into the city’s long-term effort to increase downtown density and attract corporate headquarters to the city, economic development director Robert Sturns said. Unlike new construction on the fringe of the city, projects like 1000 Weatherford would also not require new city services like road construction or additional fire protection.
Councilwoman Ann Zadeh, who represents downtown, noted that not all projects will meet every one of the city’s economic development goals.
“I am supportive of this,” she said.
OTHER DOWNTOWN APARTMENTS
▪ Monday saw the groundbreaking of Burnett Lofts. The four-story complex will bring 245 apartments to 601 W. 13th. The building, which will take up most of the block between 13th and Lancaster, will have space for retail and restaurants.
▪ At 901 Commerce, the Southern Land Company is planning a roughly 290-unit apartment building with about 25 stories. The building would include retail and restaurant space on the ground floor.
▪ The Worth, a 30-story luxury condo tower with more than 130 homes, by Zamco Properties, is slated for 330 North Henderson. The Fort Worth Downtown Design Review Board approved the concept in June.
Locations Mentioned: Burnett Lofts, Omni Fort Worth Hotel