The city of Round Rock is moving forward with a project to bring residences downtown. City officials say residential townhomes will diversify business opportunities in the downtown area. City officials say the project will also bring more residents downtown creating a larger customer base, but some local business owners said the effort might not be enough to save struggling retail.

City Council approved a memorandum of understanding June 9 with InTown Homes to build 82 townhouses on the former Builders Gypsum Supply property south of City Hall.

The city will sell the property to InTown Homes for $425,000, and the company will invest at least $18 million in the development, according to the memorandum. The city will also waive development fees and expedite the permitting process for the company.

“We have a good stock of existing commercial buildings,” City Planning Director Brad Wiseman said. “What we don’t have is a growing residential base in the downtown area.”

Wiseman said he expects construction on the three- to four-story townhouses to begin sometime next year. The city and the developer are still negotiating what the buildings will look like, but the development will be compatible with what already exists downtown, Wiseman said.

InTown Homes Vice President David Foor said the design will likely include contemporary, traditional and industrial options that complement one another but also to appeal to different tastes. Units will range in size from 1,300-2,800 square feet, and prices will range from the high $200,000s to the high $400,000s, he said.

Foor said he does not expect the nearby rail line to deter interested buyers, who are often more concerned with having the view from their home blocked by future development, which will not happen along railroad tracks.

Businesses react

Wiseman said the urban residential units would make downtown Round Rock more dynamic.

Likewise, Mayor Alan McGraw said the best way to positively impact businesses downtown is to put people within walking distance of them.

“I think it’s going to be great for the area,” McGraw said. “The businesses I’ve talked to are really excited about it. … It’s almost ready-made customers.”

McGraw also said residents who live close enough to walk downtown would open more parking spots, reducing traffic in the area.

Michelle Ly, owner of The Rock Sports Bar and Grill on East Main Street, said she thinks the townhouses will draw more regulars to the restaurant, especially during football season.

“I think it’s a great idea because it’s going to put more people in walking distance of the whole downtown district,” she said. “And it’s going to bring a new clientele to downtown Round Rock—people that didn’t even know there were options here for food and entertainment.”

Julia Broadway, owner of Sweet Love and Sugar Britches, a retail shop on South Mays Street, said the growing number of bars and more than a year of construction downtown are affecting her business.

“I don’t think that [townhouses] would hurt me,” she said. “But I don’t think it’s going to be our saving grace, either.”

Realtor Marci Wagner, who owns Bless This Nest, a retail shop on North Mays Street, said she understands the high demand for housing in the city, but the townhouses will mean several more years of construction downtown.

Future downtown projects

The city bought the former Gypsum Builders Supply location in 2013 and helped the business relocate within the city through a $1 million economic incentive agreement. Several options were considered for the property, including a brewery, apartments and the music venue Nutty Brown Cafe, before the city settled on the townhomes.

Wiseman said the townhouses are one of several future projects planned for downtown Round Rock in the coming years. The city intends to use the southern portion of the property to extend McNeil Road eastward past where it terminates at the intersection of East Bagdad Avenue and Mays. The road extension is intended to divert pass-through traffic away from pedestrian heavy areas such as Main. 

The city is also examining future relocation options downtown for the public library, which would free up a large piece of property in the city’s historic core, he said.