Downtown market study highlights need for office space, hotels

Posted at 7:32 PM, Sep 25, 2018
and last updated 2018-09-25 21:18:10-04

On Tuesday, the Waco City Council discussed the results of a downtown market study that analyzed the performance of different segments of the market.

The 60,000 studies concluded there was a need for more office space and hotels downtown.

"We are trying to be proactive about projects that need recruiting into downtown. We have a lot of interest with some of those types of projects particularly hotel," Housing and Economic Development Director Melett Harrison said.

The area has attracted businesses in part because of the 1.6 million people who visit Magnolia Market every year.

"In the beginning, we were desperate to bring businesses to downtown Waco, and that is not the case anymore. Downtown Waco is thriving so we have to look at what works long term for that district," Mayor Kyle Deaver said. 

The consultants recommended the city to have a full-size hotel, like the Hilton, with a meeting and banquet size. 

Sylvia Munoz who is visiting Waco from Arizona said she would like to see retail at that hotel too.

"As a female, we like to see big resorts with boutiques because we like to shop," Munoz said. 

The findings also suggested the city would benefit from having a boutique hotel near Magnolia Market and mid-size range hotel with a restaurant similar to Hotel Indigo.

Waco Resident Dustin Mantz who has lived in Waco for three years would be supportive of a mid-size hotel. 

"If it's close to downtown. These visitors are going to walk around downtown. They are going to shop downtown. They are going to visit downtown. They are going to spend money in downtown," Mantz said.

In terms of adding more office space in the downtown area, he said he would be supportive if historic buildings involved would be preserved. 

"Not only is it going to bring an economic boom to downtown Waco move into every aspect of every Wacoan's life. If we had those buildings sitting there vacant. Why aren't we using them?" Mantz said.

Deaver said part of the challenge comes from not having many Class A office spaces available for rent. Class A, which have a higher renting price, are newly built and outfitted with high-quality finishes and amenities. 

"It's sort of a chicken and egg problem, getting someone to develop that office space. Not knowing what to rent that space for because there is not class A office space to use as comparable," Deaver said.

Some of the conclusions of the study, touched on the importance of Waco offering incentives to build new office space. 

Waco plans to use the findings of this study to help guide the projects the city helps fund in the future. Currently, it uses Tax Increment Funding to encourage development. Those funds come from property tax revenue, such as downtown that is over a base value set by local tax entities. 

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