PRESENTER: Presenter
Jeff Jewell, Director of Economic & Community Development
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SUBJECT: Title
Discuss a proposed amendment to the contract between the New Braunfels Economic Development Corporation and 210 S. Castell, LLC
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DEPARTMENT: Economic & Community Development
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COUNCIL DISTRICTS IMPACTED: 5
BACKGROUND INFORMATION:
In 1945, a 2.46-acre property at 210 S. Castell Avenue became home to the Producer’s Co-Op Feed and Supply, serving local and rural customers for decades. In 2021, new owners purchased the site and announced plans to rehabilitate the historic buildings into a mixed-use development featuring a public marketplace, retail and food vendors, and civic gathering spaces. Planned improvements include specialty grocery areas, a grand lawn, a performance plaza, a pavilion, and public restrooms. The downtown Farmer’s Market will relocate and expand at this new venue.
The marketplace is designed as a year-round hub for local commerce, offering affordable leased space for 20-30 small retail and food businesses. Public markets often act as economic anchors, serving as incubators for small businesses, boosting foot traffic and nearby retail activity. Beyond commerce, the project provides public benefits such as access to fresh food, job creation, small-business incubation and the preservation of historic structures.
The NBEDC and City Council approved an incentive package for the project. Approved incentives - up to $4.5 million- were approved for public components of the site to include a public lawn, splashpad, stage and exhibition space, public restrooms, trees, and better pedestrian connections aim to enhance the downtown experience. After presentations and a public hearing in August and September 2024, the NBEDC unanimously approved the expenditure, which City Council approved unanimously on October 14, 2024. The incentive terms are detailed below:
The approved incentive of $4.5 million will be delivered in tranches over a 10-year period.
Total Amount of Incentive: $4,500,000
Initial Payment: $2,000,000 reimbursed upon completion of open space and related improvements, green space, and public restrooms
Annual Payments: $250,000 of EDC sales taxes each year for 10 years after annual compliance audits
Compliance Audits: Completed annually; Co-Op Marketplace must remain in operation and remain open for public access for a majority of the year
The contract required the improvements to be completed by December 31, 2026. The project sponsor has indicated that the project has been delayed due to several reasons. Some of the delay is attributed to factors beyond its control - rising capital and construction costs, for instance. Other project decisions such as the exclusion of national and chain tenants and some redesigns of the project have lengthened leasing and permitting timelines beyond initial conceptions.
ISSUE:
The project sponsors have requested a five-year extension of the performance deadlines in the agreement due to rising capital and construction costs, tenancy, and project redesigns. This would require the improvements to be completed by December 31, 2031. This would also require shifting the minimum taxable investment thresholds forward to 2031 and 2032, respectively.
STRATEGIC PLAN REFERENCE:
YES Economic Mobility N/A Enhanced Connectivity N/A Community Identity
N/A Organizational Excellence YES Community Well-Being
FISCAL IMPACT:
There is no proposed fiscal impact for granting an extension.
Recommendation
RECOMMENDATION:
Staff recommends approval of a contract extension at a future NBEDC meeting.