Waco Tribune Herald
Dec 17, 2018
Developers are seeking more than $4.9 million in downtown incentives to bring a full-service Embassy Suites to South Second Street, behind the RiverSquare restaurants and two blocks from the Waco Convention Center.
The downtown Tax Increment Financing Zone board Thursday will consider funds for funds for facade and public improvements to assist with the $35 million project at 301 S. 2nd St., which includes a seven-story hotel with 168 rooms, structured parking, 15,000 square feet of meeting space, ballroom space, a full restaurant and a full bar.
The developers are Waco natives Birju and Harsh Patel of BH Hospitality Management LLC, which has developed hotels across Texas.
Birju Patel said he purchased the site a few months ago, and the former beer warehouse on the site now known as Downtown 301 Event Center will soon be razed to allow construction to be begin next year.
A three- to four-story parking garage will be connected to the hotel on the back side, he said. The main entrance will be from Mary Avenue, and the parking garage will face Jackson Avenue.
The TIF Zone board, which manages a fund of tax revenue from downtown properties to incentivize development in the area, will tour the site around 11:30 a.m. Thursday. Patel will present the details of his project to the board at a noon meeting in the conference room on the third floor of City Hall.
The board’s recommendation will go to the Waco City Council for final approval.
Assistant City Manager Bradley Ford said the project aligns with the city objective of investing into hospitality projects that drive business to the Waco Convention Center.
“The Embassy Suites brand is a full-service brand, and currently a lot of those rooms are not being filled locally, so we feel like there’s a great opportunity to add a full-service dynamic to downtown,” Ford said.
The Embassy Suites would be the third hotel in the blocks around the Waco Convention Center, including the Waco Hilton, built in 1981, and the Courtyard by Marriott, built in the 1990s.
Waco’s overall hotel occupancy rate has been listed as tops in the state for the second quarter of last year at 82.7 percent, bolstered by tens of thousands of weekly tourists visiting Magnolia Market at the Silos, from “Fixer Upper” fame. The rate was good for the third-highest in the third quarter, at 73 percent, behind only the oil boomtowns of Midland and Odessa.
And Waco’s growth of revenue per available room, which tracks how well revenue is maximized, was the highest of any city in the state for this quarter. Waco’s “revpar” of $72.45 places the local industry in the same tier as Dallas, Fort Worth/Arlington, San Antonio and Corpus Christi.
“By all measures we are doing fantastically in our hotels,” said Carla Pendergraft, the marketing director for the Waco Convention and Visitors Bureau.
A market study of downtown completed this summer found that a full-service hotel catering to tourists and Waco Convention Center visitors would benefit the area. Embassy Suites, operated under the Hilton brand, offers two-room suites, complimentary made-to-order breakfast, fitness centers and business centers.
The TIF Zone board in September signed off on more than $3.2 million in public improvements for a project including a trio of four-story hotels on Martin Luther King Jr. Boulevard. The next month, the city council unanimously approved that request, plus another $3.24 million in incentives over seven years as a 55 percent rebate of hotel occupancy taxes.
Waco real estate agent Jon Spelman brokered the deal to sell the Second Street property.
“We wanted to do something great in our hometown,” Patel said. “This is amazing. The city of Waco needs a full-service hotel, and what better place than an additional one in downtown.”