Waco’s Riverway development seeks $130M in public funding

Politics


A $130 million request for public funding for the massive Riverway development passed the Tax Increment Financing Zone No. 4 board Friday and is headed to the Waco City Council.

Houston-based real estate firm Caldwell Companies is proposing to build the 1,887-home community on 521 acres east of Martin Luther King Jr. Boulevard between the Brazos River and Lake Shore Drive.

The project has received support from city staff and council members, who say it would bring much-needed housing and support economic growth in downtown Waco.

Caldwell officials are seeking TIF funds to pay for public infrastructure at the site, which will include water and wastewater lines, sewer lines, drainage and public parks.







A map Caldwell Companies included in its application for TIF funding shows the general plans for the development’s layout.




The TIF No. 4 was created in 2022 to fund economic development in a 17-square-mile zone, using a portion of property tax revenue generated from that zone. That tax revenue involves McLennan County and McLennan Community College as well as the city of Waco.

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Caldwell would fund the initial development, then receive reimbursement from the TIF fund over the next 26 years based on the taxable value of the property.

City of Waco officials initially estimated that the TIF zone would reimburse $93 million for the development work, but that figure has been revised upward to $130 million to cover expected inflation and general contingency.

During Friday’s TIF board meeting, Caldwell Chief Development Officer Peter Barnhart said that upon completion in 2037, the value of the property is expected to jump to about $620 million from its current value of $530,000. The $620 million figure does not account for inflation.

Jeremy Pesina, interim director of economic development, said the reimbursements would begin once homes have been constructed on the property, raising its taxable value. Under current projections, the TIF zone would begin reimbursing Caldwell in 2026. 

Reimbursements would grow based on the taxable value of the property. By 2037, up to 20% of the new revenue generated by the added tax base would be retained for the TIF 4 fund.







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A rendering Caldwell Companies included in its application for TIF funding shows the potential look of a street in the Riverway development.




Revenue retained for Caldwell would be $233,000 in 2026 and would increase by a few hundred thousand dollars each year, with final payments in 2050 estimated at $8.6 million. 

The TIF fund would retain $200,000 from 2029 through 2032, $650,000 from 2033 through 2035 and once the 20% retainer rate kicks in in 2036, about $1 million to $2 million per year.

A proposed municipal management district created for Riverway would be able to use its TIF reimbursements to finance bonds for the infrastructure improvements.

Barnhart said Caldwell was ecstatic to be able to obtain the property. He said the company’s main goal was to provide a variety of housing near downtown Waco while ensuring the natural elements of the community, including the Brazos River, would be preserved.

Barnhart said Caldwell is taking inspiration from Towne Lake, a large development in Cypress, near Houston, that is built around a large manmade lake. Barnhart said through constructing Towne Lake, Caldwell learned the importance of centering communities around water elements, which he said brings people together and encourages recreational activities.

Caldwell is planning on constructing a private marina in the development, as well as public parks and walking trails. Outer parts of the development on Lake Shore Drive would include commercial and retail elements.

City Manager Bradley Ford said the city may consider connecting the Riverway walking trails with Brazos Park East through the construction of sidewalks on the Martin Luther King Jr. Boulevard bridge that runs over the Brazos River.

Ford said the city of Waco doesn’t get to choose when an opportunity like this falls into its lap. He said the only real negative to Riverway would be the time and cost to complete it, but said if the city delays the funding incentive, Caldwell might move on and develop elsewhere.

Ford and Pesina said city staffers are excited by the development’s potential to supply needed housing and generate economic growth in downtown Waco, which is only about two miles away.

Ford said city studies have shown a need for about 5,000 homes in Waco for a wide range of incomes.

Barnhart said initial estimates of home prices in the development will be starting between $300,000 and $400,000, which may change depending on inflation and increasing construction costs. Barnhart said all of the homes will be just inside Bosqueville Independent School District.

Ford said he expects the Riverway TIF funding proposal to go before the council May 7 for the first of two required public hearings before final approval.

WATCH NOW: Presentation, discussion on 521-acre Riverway site along Brazos with plans for 1,887 homes at April 2, 2024 Waco City Council meeting









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Work unfolds on the 521-acre site between Lake Shore Drive and the Brazos River where Caldwell Companies is planning an 1,887-home development. The property owner received a permit last year for excavation, mining and removal of material, which city officials said at the time was related to “an amenity feature” that could become part of a master plan for the larger tract.






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