Two new hotels going up at Bridge Street and Martin Luther King Jr. Boulevard in East Waco must open by Friday or possibly lose millions in Tax Increment Financing dollars the city of Waco pledged toward the project.
That opening will not take place, according to officials representing the developer, KB Hotels, and the city of Waco inspection services department. But the door is not closed on the possibility of another deadline extension.
“We’re looking at the first week of October. That’s what we’re pushing for,” said Christina Mitchell, director of sales for the four-story, 133-room Cambria Hotel, among three properties KB Hotels’ Kenny Bhakta is building at or near the intersection. Bhakta’s Holiday Inn Express rising nearby has until the end of the year to meet a city-imposed deadline. The Even Hotel shares a Friday deadline with Cambria, but remains months away from completion.
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Bhakta did not return calls seeking comment, while KB Hotels’ media spokesperson Jacquelyn Baumann said the company would release information closer to the time it has something to announce.
The downtown Tax Increment Financing Zone board in December voted to extend by eight months KB Hotels’ deadline to complete the Cambria and Even hotels, and by 12 months the deadline to complete the Holiday Inn Express. TIF funds totaling $3.2 million are to be gained or lost. Bhakta also stands to receive $4.4 million in hotel occupancy tax incentives.
Bhakta first was given a 2022 deadline to complete work on the three properties that combined would bring 361 new hotel rooms to within walking distance of the Waco Convention Center, fresh development along Elm Avenue, and Baylor University’s new basketball arena on University Parks Drive and the various retail shops and restaurants around it.
“The latest information I have, from hotel folks during a tourism meeting, is the Cambria will open sometime in September, the Even Hotel by the end of the year, and the Holiday Inn Express the first part of next year,” said Bobby Horner, who speaks for the city of Waco’s inspection services department.
He said he did not know specifics about the TIF deadlines, or whether they had been extended. The Waco City Council on Jan. 17 approved the TIF board’s recommendation that completion times for the Even and Cambria properties be stretched to Sept. 1, Holiday Inn’s to Jan. 1.
Josh Blake, chief operating officer for Wilkirson-Hatch-Bailey Funeral Home, serves on the downtown TIF board. He said during an interview Tuesday he knows of no additional extension approved by board members.
Former Waco Mayor Kyle Deaver, who chairs the board, could not be reached for comment, though messages were left on his office voicemail.
Waco Mayor Dillon Meek said another extension would require council action, “and we need to clearly evaluate the set of circumstances involved.”
Meek said pulling the plug on TIF funding for a project this far along would not be ideal, but neither would continuing to extend deadlines.
“Such a practice would suggest our deadlines are not enforced,” Meek said.
TIF board member Cuevas Peacock said delays highlight the need to create benchmarks for developers relating to time and public benefit.
“That said, in driving by this site, I have noticed that the developer has made significant progress. That has been noted,” Peacock said.
Bhakta first requested TIF support in 2018, before the COVID-19 pandemic struck and before the $341 million widening of Interstate 35 had started.
At the board meeting in December to consider an extension, Bhakta said in an interview, “It’s too late to back out.” He said he remains committed to the hotels, that the three properties carry a 20- to 30-year timeline for viability. He also said slowdown in hotel development locally would help his cause.
“Waco will see 602 hotel rooms opening in six new hotels during the next few months, which is the highest number of rooms opening over that short period of time in Waco history,” said Carla Pendergraft, assistant director of tourism for the Waco Convention and Visitors Bureau.
Pendergraft’s count includes Cambria, Even and Holiday Inn Express but also Hotel 1928, Chip and Joanna Gaines’ 33-room boutique hotel in the former Grand Karem Shrine building on Washington Avenue; Hotel Herringbone, a 21-space lodging establishment in the former Containery spot at Fourth Street and Jackson Avenue, being repurposed into a mixed-use destination by a San Diego development group; and the 182-room AC Hotel By Marriott, under construction near Sixth Street and Mary Avenue downtown.
“Waco hoteliers have expressed excitement about the upcoming football season because of the addition of two home games,” Pendergraft said by email. “Baylor alumni are expected to descend upon Waco for all of these games, and fill hotel rooms and restaurants.”
