Company officials are looking to develop the project on a 123-acre site on Allen’s northern border with McKinney, located at the southwest corner of SH 121 and Stacy Road. Allen City Council unanimously approved an economic incentive agreement for the project at a Feb. 25 meeting, with council member Tommy Baril absent from the meeting.
The performance-based agreement includes potential tax rebates for the resort company, as well as requirements for details of the project like hotel rooms and convention center space, according to a presentation at the meeting.
The setup
Kalahari Resorts and Conventions is the creator of America’s largest indoor waterparks, a Feb. 20 city news release states.
The family-owned company operates full-service resort properties in four states, with each offering vacation amenities as well as meeting and convention spaces. The company has one existing Texas location in Round Rock, as well as locations in Ohio, Pennsylvania and Wisconsin. The company is also developing a location in Virginia, according to its website.
Quote of note
“Texas is bigger than any of the other states that we have been in," said Ashley Nelson, a member of Kalahari’s founding family. "Texas understands business, it understands growth, but it also understands the importance of the family and the family memories, and how important it is to get the families together off screens and enjoying time together. Texas just understands that, so it does make sense for our family to want to have two [locations] in Texas."
The details
The proposed Allen resort would span 1.2 million square feet, and include:
- At least 900 guest rooms
- An indoor and outdoor waterpark
- A 165,000-square-foot convention center
- At least 14 food and beverage outlets, including a steakhouse
- A family entertainment center/arcade
“It really puts us on the map for bringing visitors and bringing in tourism dollars that we can then use to augment our local tax base,” said Daniel Bowman, executive director and CEO of the Allen Economic Development Corporation.
The project would join a number of entertainment-focused attractions under development along the SH 121 corridor, including the Cannon Beach Surf Park, the Sunset Amphitheater and The Farm in Allen, featuring entertainment venues Chicken N’ Pickle and High 5.
The situation
The economic incentive agreement for the project is dependent on performance by the developer.
If resort officials meet minimum requirements for tax payments made to the city, they would be provided a partial rebate of city taxes over the course of the 38-year deal. If performance requirements or project milestones are not met, the city would not pay out rebates and would retain the land.
An estimated $390 million in new tax revenue would be collected by the city as a result of the agreement, city documents state. Following the completion of the 38-year term, the city would collect about $26 million annually in local tax revenue.
The “pay for performance” rebate incentive also includes waivers of certain city fees, a grant of a 15-acre parcel on the site already owned by the city, and future bonds issued by the Allen Community Development Corporation and the Allen Economic Development Corporation, city documents state. City officials are also considering establishing a public improvement district, a type of special financing district, for the resort.
Diving in deeper
The project site is currently under contract to be purchased by the Allen Economic Development Corporation, using funds from the organization as well as from the Allen Community Development Corporation. The organization would lease the land to Kalahari developers for the project, including a hotel land lease, a convention center land lease and a convention center building lease.
Bowman said the site has seen interest from developers looking to build warehouses and apartments, among other uses.
“This project is an opportunity to do something with this site that drives economic value and creates an amenity, and also helps to avoid some other uses that might be less attractive,” Bowman said.
The city-owned land and leasing structure allows the project to remain eligible for the state’s Qualified Hotel Program, which could provide grant funding for the development.
In return for the incentives, the project is required to be maintained and operated by Kalahari for the duration of the agreement. The deal also requires the development of the defined “required uses,” the presentation states, including 912 hotel rooms, the convention center and the water park.
While Kalahari officials estimate the development could employ as many as 1,000 people, the agreement requires the creation of at least 500 new full-time jobs, city documents state. The agreement also requires the project to meet specific milestones, and meet a 2033 deadline to open the resort.
“The reason we're being asked, in this case, to provide an economic incentive package is because this was a highly competitive project,” Bowman said.
A similar lease agreement was executed by the city of Round Rock as part of the development of Kalahari’s first Texas location in 2020.
“Kalahari has exceeded our expectations in terms of direct revenue to the city, as well as growth in the area in which they were built,” Round Rock City Manager Brooks Bennett said of the south Texas resort.
The impact
In the first 10 years of operations at the proposed resort, city officials estimate that $5 billion in direct and indirect spending will be generated. The projection includes money spent at local shops and restaurants, as well as other hotels in the area.
The development would also offset the cost of city services through the increase in sales tax revenue collected from residents and visitors alike, city documents state.
The project would be subject to review for potential impact to traffic and roadway infrastructure. The project’s location along SH 121 is expected to minimize impact to city roadways, city documents state.
“For the traffic coming in from outside Allen, that ability to access via the highway is very important,” Bowman said, noting that the front of the resort would be oriented towards the highway.
The North Texas Municipal Water District also confirmed that the water provider will be able to meet infrastructure needs of the development if it does move forward, according to city documents. Additional reviews for impact to police and fire services will also be conducted.
What they’re saying
Comments from community members during the meeting expressed a mix of support for the project and concerns for potential impacts from the development.
Allen resident Van Orr, who lives adjacent to the project site, said she was concerned about traffic congestion and associated pollution as well as additional strain put on local water infrastructure.
“I understand your mission and understand your visions and I respect that,” Orr said. “The only thing that I'm concerned about is my quality of life.”
Allen resident Matt Foster expressed support for the development, citing the benefit of expected revenue from sales taxes, property taxes and hotel occupancy taxes in his comments
“I know we're just in the beginning of this process, and this is the kind of thing that will take a long time, but it will truly transform the future of Allen,” Foster said. “It will drive private sector investment, tourism and economic opportunities for all Allen residents for decades to come.”
Allen Mayor Baine Brooks described the project as a “game-changing opportunity” for the city, but also for Collin County and the North Texas region.
“Our surrounding neighbors are going to benefit from the project,” Brooks said.
McKinney Mayor George Fuller said the city was in the running to have the project developed in McKinney, but that the development in Allen will still benefit McKinney residents and the surrounding community.
“It drives traffic to our ... community region,” Fuller said. “I believe it's a rising tide that will float the ships of McKinney as well.”
Looking ahead
While the economic incentive agreement requires the project to be operational by 2033, the resort could open as soon as 2030, Bowman said.
Following the project site being secured, architectural and site plans for the project are expected to take a year to create. Public outreach will begin following the initial planning phase, and the project plans will then proceed through review processes by city staff, the Allen Planning and Zoning Commission and the Allen City Council.
The process will include public hearing opportunities during the zoning review and prior to a vote on the site plan by the Allen City Council. City officials also plan to collaborate with Kalahari representatives to conduct additional informational meetings for the public.
“This deal is not done, but we’re on the right track,” Brooks said.
