Fort Worth Stockyard transformation: Development meets traditionJune 6, 2014
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Stockyards incentive plan
To get the maximum incentive for its Stockyards project, the Majestic-Hickman partnership must meet several guideposts:
• Total investment excluding land: $175 million
• Parking spaces added: 1,200
• Phase 1: $35 million invested by Dec. 31, 2018; 180,000 square feet of retail, commercial, creative office; Mule Barns the potential target.
• Phase 2: Additional $65 million invested by Dec. 31, 2022, to include retail, commercial, office and/or multifamily.
• Phase 3: Additional $75 million invested by Dec. 31, 2024, to include all of Phase 2’s potential uses.
• Incentive: Chapter 380 grant for up to 25 annual payments equal to 40 percent of real and personal property tax added by the development, and up to 80 percent of one-cent sales tax revenue added by the development.
• Incentive cap: $26 million
• Additional land: Majestic and Hickman can add investment property to development boundary area. Chesapeake Energy has two Stockyards sites reportedly under contract, but Hickman and Majestic executive Craig Cavileer say they are not the buyers.
• Contracting: Various milestones for spending with Fort Worth contractors and with minority and women-owned contractors and vendors.
• Job creation: 25 new jobs created by Dec. 31, 2018.
• Affordable housing: If any residential is developed, 20 percent of units must be set aside for affordable housing.
Fort Worth’s historic Stockyards, transformed in the 1990s when businessman Holt Hickman converted the old hog and sheep pens into the Stockyards Station festival center and added a visitors center, could be headed for another re-awakening.
The Hickman family is teaming up with Majestic Realty Co. of California on a $175 million mixed-use project that could include corporate headquarters, hotels, destination retail and restaurants on Marine Creek, craft breweries, and residential space, as well as a redevelopment of the old Mule Barns.
The partnership, Fort Worth Heritage Development LLC, takes in a major portion of the holdings owned by the Hickman family and Dallas investor Lyda Hunt Hill, including Stockyards Station and the Mule Barns, said Majestic principal Craig Cavileer and Hickman vice president Brad Hickman. They spoke in an interview after disclosing the project to Mayor Betsy Price and City Council members June 3. Hill has decided to exit her interests and is negotiating with the partnership, they said.
“The Stockyards is a massive project,” said Brad Hickman, Holt Hickman’s son, in explaining why the family needed a partner to move its holdings forward. “We’re landowners, we’re not developers. We’re business owners.”
Cavileer, whose firm also is family owned, said the Stockyards’ appeal is in its brand.
“The Stockyards is an international brand,” Cavileer said. “It’s got a theme that’s already determined.”
The deal does not include the Hickman family’s 100 percent ownership interest in the Exchange Building or its majority interest in Stockyards 2000, an entity whose holdings include Billy Bob’s Texas.
The partnership is asking the city for up to $26 million in incentives over 25 years for infrastructure. The council will vote June 10 on the incentive agreement.
The real estate holdings have major infrastructure needs, Cavileer said, such as street, water and sewer improvements or additions.
The partners agreed, among other things, to invest a minimum $175 million over 10 years to get the maximum incentive.
In a June 2 letter to Price, they also said they believe a tax increment finance district is the best way to pay for necessary improvements in the Stockyards in the future. In its June 3 pre-council discussion of the project, the council agreed to the TIF discussions by the staff.
Price also said it’s critically important for the city and developers to set design standards for the Stockyards to ensure that what goes in is appropriate to the Stockyards’ history and flavor.
“We must respect the historical character of the Stockyards,” she said.
Cavileer and Hickman agreed.
“You don’t want somebody putting up a glass tower,” Hickman said in the interview.
Council members voiced support for the incentive agreement.
“The developer is at risk and must make considerable investments before he can begin to take advantage of what’s offered here,” Price said.
Councilman Sal Espino, whose North Side district includes the Stockyards, said the project “can be a spur of the revitalization of the entire near North Side,” including the area around Meacham Airport.
“It’s a great marriage,” Councilman Dennis Shingleton said of the partnership. “Authenticity is the key.”
Majestic has a 70 million-square-foot portfolio that includes industrial, office, retail, sports, entertainment and hospitality projects. Headquartered in Southern California, the company has regional offices in Atlanta, Dallas, Denver, Las Vegas and Bethlehem, Pa. Cavileer and Majestic vice president Rex Hoover will head the Fort Worth office.
Cavileer said he grew up in Austin, and Hoover grew up in Fort Worth and Austin.
Cavileer and Hickman said the Stockyards partnership will be a 50-50 split.
The first phase could include redevelopment of the 200,000 square feet of historic Mule Barns along East Exchange Avenue, the partners said.
The partners believe the 180,000-square-foot Mule Barns are “ripe for renovation and redevelopment,” including restaurants and entertainment, but the buildings need major infrastructure work, Cavileer said.
“That’s a lot of square footage,” he said. “Right now, it’s there kind of as a monument.”
Cavileer and Hickman also said they’re interested in recruiting potential corporate relocations to the Stockyards. Companies with 250-400 employees that fit the Stockyards’ history and culture have already inquired, they said, and they believe they could accommodate relocations of up to 1,000 employees.
The Mule Barns are one location, Cavileer said, and new construction is another option.
“It’s amazing, without even trying, what we’ve turned down,” Cavileer said.
They’re also interested in restarting live cattle auctions, which would require renovations to the buildings north of Exchange.
In the letter to Price, the partners laid out their vision:
* Mule Barns: Preservation and renovation. "New Stockyards experiences including destination retail and restaurants." The partners said they will preserve the Mule Barns’ historic architecture.
* Stockyards Station: Improvements "allowing us to expand upon successful operations currently serving tourists to the area."
* Livestock auctions: ”We are currently conducting due diligence on the re-establishment of on-site livestock auctions, which were a significant part of the Stockyards existence decades ago, as well as the restoration of the facilities that once hosted the auctions."
* Destination retail, craft breweries and spirits, farmers market, signature restaurants are "new projects under review.” One such area for those would be where the partnership’s holdings front Marine Creek, and construction there would help connect the Stockyards to the Trinity River Vision, Cavileer said. “If we could do there what Tim Love did [with the Woodshed restaurant on the Trinity River near Colonial] times 10, it’d be beautiful. But it’s going to be a process. It’s not going to happen overnight. The property is not ready to develop right now.”
* "Development of a historically themed hotel(s) to complement the Hyatt Place and Stockyards Hotel." Cavileer said that, in concept, the partnership plans two hotels.
"Development of a residential component (with city approval) offering residents a unique opportunity to enjoy a live, work and play community in North Fort Worth.” Residential use would require rezoning by the City Council.