Downtown Fort Worth high-rise gets lofty boost as council approves tax incentives
August 27,2019
See full Fort Worth Star-Telegram article by Luke Ranker here.
Fort Worth’s downtown skyline may change slightly after the city council Tuesday approved tax incentives for a high-rise apartment building called 1000 Weatherford.
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.
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.
Councilman Cary Moon took issue last week 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.
Moon was absent from Tuesday night’s meeting, but in a work session earlier in the day he said he would not support the incentive package.
Councilman Jungus Jordan was the only “no” vote on the item.
Fort Worth resident Jeralynn Cox urged the council to not approve the tax breaks, saying they didn’t create significant employment and didn’t seem fair to taxpayers.
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,” Hennig said in an email last week.
Meanwhile, the low- to mid-rise market has been performing 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.
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 with the five-story alternative, Hennig told the City Council, but the mid-rise concept would not require a tax incentive.
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.
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.