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City Council on Tuesday approved an incentive for Fort Worth Heritage LLC – a joint venture between Majestic Realty Co. and Hickman Companies – to develop Phase II of the Fort Worth Stockyards along with development partner M2G Ventures.
The site will be located between East Exchange Avenue, Stockyards Boulevard and Packers Street.
This major mixed-use development will include 300,000 square feet of new commercial space, new full-service hotels with 500 rooms, a 295-unit multifamily property, and two or more below-ground parking garages to support Cowtown Coliseum, the Fort Worth Herd and other area improvements.
“This significant investment by Fort Worth Heritage LLC, in collaboration with M2G Ventures, represents the continuation of the successful revitalization of our historic Fort Worth Stockyards, emphasizing our shared dedication to our community's economic growth and preservation of our rich heritage," said Mayor Mattie Parker. "Phase II of the Fort Worth Stockyards development promises to deliver substantial long-term value and improvements to Fort Worth's only historical entertainment district. Furthermore, this project is projected to bring over $425 million in net new taxes to our city, significantly bolstering our commercial tax base. I commend Councilman Flores for his leadership and thank all the stakeholders involved for their foresight and commitment to the continued growth and vibrancy of Fort Worth through this transformative project.”
Go deeper: The first phase of the Fort Worth Heritage project focused on Mule Alley and Hotel Drover, and was incredibly successful – increasing the area’s property value to $225 million and bringing significant new sales tax to the City of Fort Worth. Tourism in the Stockyards has also increased from 3 million to 9 million visitors annually over the past decade.
The original project – incentivized by City Council in 2014 – called for the second phase of Fort Worth Heritage to include two above-ground parking garages to help combat this challenge, but they would use a significant portion of the remaining land available for development.
By contrast, the underground garages that are part of the updated scope for Phase II will maximize the value of the site – allowing the land at ground level to be better utilized for new development that will be more consistent with the historic look and feel of the Stockyards, while also easing parking challenges in the area.
“Stockyards Heritage is proud of the successful partnerships we established ten years ago with the City of Fort Worth and Tarrant County for the preservation, adaptive reuse and further development of the Fort Worth Stockyards. Keeping the historic Stockyards vibrant, authentic, accessible and sustainable has been and remains the collective goal of all of the parties and we look forward to this next phase for the district and continuing to celebrate its rich history and spirit of the Stockyards,” said Craig Cavileer, managing partner of Stockyards Heritage Development Co.
What’s next: The developer has committed to a minimum of $630 million in overall investment, of which $472.5 million is hard construction costs, with 15% of those construction costs going towards business equity firms.
The developer will also construct the parking garages, but will convey their ownership to the City after their completion. The City would lease the garages back to the developer for 30 years, receiving the majority of the net parking profits – with a portion set aside to cover bond debt service. After 30 years, the developer will have the option to buy the garages back from the City at fair market value, or postpone that purchase by another 10 years.
Additionally, the City will provide the developer with annual performance-based grants totaling approximately $71.6 million across the incentive’s 30-year term, and would reimburse the developer up to $15 million for improvements to support the City-owned Cowtown Coliseum and the Fort Worth Herd.
However, much of this incentive will be paid for through the net proceeds from the parking garages – bringing the total public investment in the project to $145,669,450. This amount will be funded from new incremental taxes resulting from the project itself.
“The public-private partnership between the City of Fort Worth and Stockyards Heritage for Phase 2 is both welcomed and exciting,” said District 2 Councilmember Carlos Flores. “Ten years ago, there were many questions and concerns when Phase I was announced yet today, it’s been a resounding success. That success validates the vision for the Stockyards then, now, and for the future. Majestic Reality and the Hickman family are valued partners and we look forward to the continued improvement, redevelopment and preservation of our Historic Stockyards.”
Bottom line: Ultimately, the second phase of the Fort Worth Stockyards is expected to bring $425,301,534 in net new taxes to the city. When combined with the parking profits and the eventual sale of the parking garages, the project will ultimately bring $844,997,159 in total net value to Fort Worth’s commercial tax base, while improving parking capacity in one of the most popular entertainment districts.
“This project is an outstanding example of the kinds of public-private partnerships that Fort Worth is known for,” said Michael Hennig, economic development manager at the City of Fort Worth. “We look forward to continuing this collaboration with our partners at Fort Worth Heritage to showcase the Western spirit of the Historic Stockyards that makes our city so unique.”
