Entertainment, hospitality uses top city's list

Grapevine has a national consulting firm on board to help provide direction in its effort to develop the city's last large-scale tracts of land as one more big attraction for the city.

HR&A Advisors will oversee a consulting and development effort aimed at driving sales tax revenue, which Grapevine leaders have called crucial for the city's operations. Grapevine City Council members have said the area, if developed correctly, has the potential of lowering property taxes on homeowners and shifting more of the cost of city operations off the shoulders of residents of the community.

Mayor William D. Tate has pushed for speed in the hunt for the community's next big development. His eyes are on Fort Worth, Frisco, Allen and McKinney, where he said development has been heating up and diverting some of Grapevine's momentum.

"For us to get anything we want [on the tracts], time is marching on us," Tate said. "I haven't given up on the ability to get hotels, family entertainment and retail. If we wait, it's going to be apartments, offices or warehouses, in my mind."

The goals for the property

The 185 acres, obtained from former Texas Rangers first baseman Rafael Palmeiro in 2013, are north of Grapevine Mills and front SH 121, Grapevine Mills Parkway, Freeport Parkway and Grapevine Mills Boulevard. The land is split into two adjacent sections: About 135 acres south of Denton Creek and about 50 acres north of Denton Creek, of which about 10 acres is within the city limits of Flower Mound.

Grapevine Economic Development Manager Dan Truex said the acquisition and subsequent plan to develop the land fit with the city's economic emphasis areas.

"The target, although there may be other uses mixed in, is hospitality, entertainment and retail," Truex said. "Those generate dollars from outside the community and generate retail sales."

Finance Manager John McGrane said it is tough to pin down how much of the city's sales are made to nonresidents, but the city's focus on tourism, entertainment and retail has paid big dividends. Those sentiments are echoed by the mayor, city council and local economic development officials.

"It's important to continue to maintain the [retail sales tax] base and grow it to add additional revenue and more services that can serve citizens," Truex said. "Given that so much [retail activity is] from outside of the community, you have a situation where city services are being provided by people outside the community."

Area competition

Truex said competition to attract large-scale venues in the hospitality, entertainment and retail sectors is stiff throughout the DFW metro area, citing cities such as Frisco, Plano and Southlake as strong competition in their development efforts.

"We still have that large tract, but retail tends to jump out to the new frontiers sometimes," Truex said. "For Grapevine, we [also] need to focus on internal tracts and continue to build those."

A number of competitors in the market have parcels available, he said.

"We have to be competitive and aggressive because other cities are aggressive as well," Truex said.

The city's investment

Buying the land from Palmeiro cost the city about $29.5 million, though appraisal documents from Fort Worth real estate consultants Ben Dyess and Associates valued the land at $43 million with no improvements. The city funded that purchase with $19.5 million in revenue bonds and about $10 million in reserves for a planned downtown rail depot on the future TEX Rail line.

Some council members balked initially at the idea to buy the land because of Palmeiro's history of difficulty developing the tract. The property was scheduled for foreclosure, but Grapevine bought the tract in December. The purchase was finalized this year. What to do with the land became the city's next question, driving a hunt for professional consultants to help Grapevine.

After debate during recent council meetings, the council voted 5-0 Aug. 4 to hire HR&A. Grapevine's agreement with the company allows up to about $700,000 in possible expenditures for various services. That money would power a market feasibility study to determine the best use for the land, a master plan for laying out a development, and a strategy for courting and landing a major developer on the site.

The first phase, which includes the market feasibility study and land use plan, is expected by early 2015.

Tate said the city will pass on its planning costs to the user of the land once a development agreement is in place. He and some city council members initially questioned hiring a consultant, but were satisfied once more details on the planning timeline and costs developed in July. The idea of Grapevine marketing the land itself also came up. HR&A's Amitabh Barthakur said that is a valid approach, but lacked vision.

"That's a fair enough way of doing it," Barthakur said. "You can get a broker, find who's interested and get a deal done. We think that plays on a short-term real estate cycle. This is the last piece of property that Grapevine has. It needs to do a lot of things over a long period of time. Putting some thought into it and putting a road map out there about how you are going to tackle this issue is very valuable, and we've seen it successfully done in other communities."