Waco Approves Major Retail Development Partnership Along I-35 South

WACO, Texas (KWTX) - Waco City Council has approved a major public private partnership tied to a large scale retail development planned along Interstate 35 South near New Road and Loop 340.

The agreement between the City of Waco and Waco Gateway, LLC supports development across roughly 252 acres and includes millions of dollars in infrastructure improvements and financial incentives aimed at attracting nationally recognized retailers to the area.

According to city documents, Waco could spend up to $33 million on roadway and infrastructure improvements connected to the project.

That includes:

• A northern roadway phase tied to a proposed warehouse style retailer
• A southern roadway phase tied to additional big box retail development

The agreement also allows for up to $18 million in future sales tax reimbursements for the developer if specific revenue goals are met.

City documents state the development must generate at least $3.5 million annually in sales tax revenue before reimbursements would apply.

While city leaders confirmed retailers are connected to the project, those names have not yet been publicly released.

Ryan Holt said that is common during early development negotiations.

“It’s pretty common in these kinds of development agreements where until the details are worked out, brands don’t always like to give up their intellectual property, so to speak,” Holt said.

Holt said once a formal agreement is reached with a retailer, it would return to council as a public document.

City leaders say the agreement is structured to protect taxpayers by tying infrastructure spending to development benchmarks and deadlines.

Still, because the city would front millions of dollars in infrastructure costs before the long term success of the project is fully known, questions remain about how much financial risk taxpayers could ultimately carry if the development underperforms.

Holt said the city’s general fund would not support debt tied to the project.

“The infrastructure projects would not go forward unless those keys were met,” Holt said. “In this case, we’re utilizing what’s called TIF Four, or Tax Increment Finance Zone money, so it would not be the general fund of the city supporting that debt.”

City officials said the development represents one of the last major undeveloped stretches along Interstate 35 within Waco city limits.

“When you allow that type of development to go outside the city, then our local taxpayers don’t benefit from the sales tax and the property tax increases that can come from this type of development,” Holt said.

The project will move forward in phases tied to future agreements with retail tenants that have not yet been publicly announced.