TIF contribution for Baylor basketball arena down, along with days for city of Waco events there

The tax-funded contribution to a new Baylor University basketball arena is set to be about $34 million instead of the $65 million initially proposed, but the city of Waco will not be able to schedule as many events in the new venue.

The Tax Increment Financing Zone board recommended Tuesday granting $73 million in tax revenue to Baylor, the city of Waco and Catalyst Urban Development to fund construction of the basketball arena and the planned transformation of the surrounding blocks of downtown Waco along the Brazos River. About $34 million would be dedicated to the arena and riverwalk, with the rest going to the surrounding development. The money recommended Tuesday is in addition to a $20 million TIF grant approved for Catalyst in 2020.

During a joint meeting with the Tax Increment Financing Zone board, the Waco City Council discussed changes to agreements between Baylor and the city, part of a larger plan to build a $213 million basketball pavilion in downtown Waco near the corner of Clay Avenue and South University Parks Drive.

Instead of designating 90 days per year for the city to book events in the basketball pavilion, as officials had discussed when they announced the project in December, Baylor would bring 10 of its own events to the downtown-area venue, and the city could book 10 ticketed performances there, for the first two years of its operation. The city would also get 25 days annually to hold community events in the venue.

Assistant City Manager Paul Cain said the city plans to hire a firm to study what kinds of concerts and events the venue is best suited to, and Baylor will contribute $25,000 to the joint marketing study.

“The goal from the very beginning was to bring people to downtown and encourage more usage and more excitement downtown and certainly, on the riverfront,” Cain said of the deal. “We think it does that.”

The city will provide $34 million to the project in equal payments over the next five years instead of the initially discussed $65 million. Baylor University also will contribute $10 million over the next 10 years toward a performing arts center the city plans to build in the riverfront area.

Waco City Manager Bradley Ford said Cain and City Attorney Jennifer Richie finalized nine agreements between the city, Baylor University and Catalyst Urban Development over the last six weeks.

Baylor University will spend $213 million to build the new pavilion, including the city’s contribution, while the city will build 435 parking garage spaces at the northeast corner of Clay Avenue and University Parks Drive and 165 spaces in a parking garage across Clay Avenue from the pavilion site, then create a municipal parking authority. Cain said the city is negotiating with firms that specialize in parking.

The city also plans to spend $16 million on riverwalk improvements from Franklin Avenue to Baylor Law School at 1114 S. University Parks. Cain said that work might be broken up into phases.

Catalyst Urban Development will develop a corner lot at Clay Avenue and University Parks Drive into what city staff envision as restaurants, retail space, offices and multifamily housing, including 100 housing units, at least 3 of which will be set aside for an affordable housing pilot program the city will spend $30,000 on.

“If it works well … (the developers) are willing to expand,” Cain said.

During Tuesday’s meeting the TIF board recommended granting $34 million to Baylor University for public improvements around the basketball pavilion, $4.9 million to Catalyst Urban Development to build the 165-space parking garage and multifamily housing and $34 million to the city of Waco to pay for downtown quiet zones, riverwalk improvements, the larger parking garage, and traffic and road improvements at Clay Avenue and University Parks Drive.

Also Tuesday, the city council voted to extend by 30 years the life of TIF Zone No. 1, which covers much of downtown Waco on both riverbanks. It will remain in place until 2052. Waco Independent School District, the largest contributor of tax revenue to the zone, will leave at the end of this year.

Assistant Finance Director Rusty Hill said Waco ISD represents $8 million of the $15 million in tax revenue the TIF draws each year. Once the school district leaves in December, revenue will fall to roughly $7 million.

“Immediately, it has quite an impact,” Hill said.

He said revenue is projected to rise to $13 million by 2029.

With Waco ISD’s exit, all revenue from Waco, McLennan County and McLennan Community College tax bases created in the zone since it was formed in 1982 will continue to go into TIF coffers. The money is limited to use in the zone, reinvested in infrastructure and economic incentives for new development.