An Austin company plans to rescue the floundering Franklin Place apartment complex downtown, promising to proceed with a 104-unit second phase and a parking garage that may feature public space near the Magnolia Market and Union Hall.
American Ventures, an investment vehicle founded by Shravan Parsi, confirmed it now owns the 63-unit Franklin Place at 600 Franklin Ave. The former owners, Austin-based Realtex, leveled several ramshackle structures to build the complex a decade ago and had announced a second phase with 90 units.
Realtex secured $1.3 million in Tax Increment Financing Zone money to complete the first phase, and received pledges for $750,000 more in 2015 before the project went dormant.
The TIF board pulled the money at the urging of Melett Harrison, who oversees economic development for the city of Waco.
Now Austin-based American Ventures hopes to take up where Realtex left off, said director of operations Mark Hansen, speaking by phone.
“Our timetable is tomorrow,” said Hansen, commenting on how quickly the firm would like to proceed with developing the second phase. “Realistically, we’re talking about completing Phase 2 in 18 to 24 months, 18 months if all things fall in line. We’re in the design phase now.”
Hansen said American Ventures hopes to take advantage of Waco’s designation as an Opportunity Zone. The U.S. Economic Development Administration defines such zones as economically distressed communities where private investments, under certain conditions, may be eligible for capital gain tax incentives, according to the EDA website.
Opportunity Zones were created under the 2017 Tax Cuts and Jobs Act signed into law by President Donald Trump in December 2017.
Nearly 9,000 such zones have been designated nationwide. Investors can defer tax on any prior gains invested in a Qualified Opportunity Fund until the earlier of the date on which the investment in a QOF is sold or exchanged or until Dec. 31, 2026, the EDA reports.
“We kept looking at overlay maps, and Waco kept popping up,” Hansen said. “This property came across our desk, and we thought, holy cow, what an opportunity. We thought Franklin Place was a good deal in and of itself, but helping to revitalize Waco, assisting in its future growth and planning, it all fell within our bailiwick. The fact this project qualified for TIF funding probably did drive us to move forward. That TIF money, as we understand it, is not available at this time, but we are interfacing with the city.”
Going up with 104 living units at the rear of Franklin Place, which fronts Franklin Avenue near Sixth Street, “is included in our thesis.”
He declined comment on what American Ventures paid for the 63-unit property, whose occupancy is above 90%, Hansen said.
Adam Voight, with H&A Commercial Team, confirmed the agency has met with representatives of American Ventures with the goal of marketing commercial space on the Franklin Place first floor, including that previously occupied by Providence Express Care. The largest space available with entry off Franklin Avenue covers 3,676 square feet, while the smallest is 1,233 square feet, said Voight. Current tenants include Mainstream Boutique and Coming Home To Waco, which markets items from The Round Top Collection.
“We’re just finished photographing the space, so we’re not yet full-blown on the market,” Voight said. “This property is two blocks from Magnolia Market, so we believe we can take their lead in pursuing clients. Not anything too crazy, perhaps something in home decorations. We have been marketing River Square Center, have dealt with a couple of restaurants and a furniture store, and believe they could have an interest” in Franklin Place.
Located near University Parks Drive and the Waco Convention Center, River Square Center is anchored by The Shops at River Square Center, a popular collection of shops selling an array of merchandise. Office space and niche retail space dominates River Square Center’s top floor.
Voight said it is his understanding American Ventures wants to place a parking garage within the Franklin Place complex to serve residents, and to possibly make at least one floor available for public parking. He said he does not have estimates on the number of vehicles to be accommodated.
“There is parking for residents now, at the back, ground-level parking only,” said Voight. “This group is talking with engineers now, and it is safe to say a parking garage is in their plans. I know the city is trying to solve the parking issue downtown, and there is talk of working out a deal with the city on this project, possibly making available a full floor worth of public parking.”
Megan Henderson, executive director of City Center Waco, a downtown advocacy group, noted that near-term plans call for Franklin Avenue downtown to become a carrier of two-way traffic.
“We’ve always thought Phase 2 of Franklin Place would address the need for additional parking and for residential units,” she said. “We have added fewer spaces downtown the last few years than several different studies have indicated a demand for. It is important to continue to look at parking availability in the context of the robust developments planned. The question remains: Where should these spaces be placed to create the best value for the public? Additional spaces are needed, and more study is needed.”