City of Cedar Park– The Cedar Park City Council has approved a master development agreement (MDA) with CPM Development LLC, which plans to build a hotel and convention center anchored by a super-regional retail and entertainment destination near US 183A.
The City Council’s unanimous vote to approve the agreement on Thursday evening marks a crucial first step toward the City securing the 117-acre development that is expected to generate $435 million in net new city tax revenue within 25 years of opening. Terms of the agreement call for the project to be anchored by NFM (Nebraska Furniture Mart).
“This development is a once-in-a-generation opportunity to dramatically expand Cedar Park’s commercial tax base with a single project,” said Cedar Park Mayor Corbin Van Arsdale. “This also gives Cedar Park the hotel and convention center we’ve wanted for a long time, to help attract more visitors and provide a much-needed venue for large gatherings so that locally-organized events don’t have to be held outside of our community.”
Located at 750 E. New Hope Dr., the project would include — at a minimum — a 250-room full-service hotel with a 30,000 square foot City-owned convention center; 250,000 square feet of high-quality commercial development; a 500,000-square-foot NFM retail store; and a 700,000-square-foot warehouse servicing NFM.
One of the nation’s largest home furnishings retailers, the 84-year-old company provides one-stop shopping destinations that attract customers from across the nation with enormous inventories of furniture, appliances, electronics, flooring and other home goods at a wide variety of prices.
“When looking for future store locations, we have an extensive evaluation process. The quality of life and vibrancy of the communities we locate in is very important,” said NFM Chief Strategy and Development Officer Jeff Lind. “Cedar Park offers a great quality of life in so many aspects, which makes it an excellent choice.”
Under the terms of the MDA, CPM Development is required to invest a minimum of $400 million to build the NFM-anchored development, which then must generate a minimum of $450 million annually in sales. The project also must create a minimum of 725 jobs within the first year of opening.
In return, the City will issue a maximum of approximately $45 million total in performance-based tax rebates to CPM Development. Funded exclusively from City sales, hotel occupancy and property taxes generated by the development, the rebated funds will be used in part to reimburse the developer for costs associated with the on-and-off-site public infrastructure projects it’s required to complete before the project opens — including major road and intersection improvements.
If the project meets its minimum performance obligations annually, the City expects to retain $435 million in net new tax revenue over the first 25 years that the project is open— a gain of nearly 10 times the total amount of tax revenue rebated by the City.
If the project fails to meet minimum performance obligations, the developer will receive less in rebates.
“This agreement places all of the risk on the developer for a transformative project that will create the greatest economic development return in Cedar Park’s history,” said Cedar Park City Manager Brenda Eivens. “This development will generate hundreds of millions of dollars in net new tax revenue that can be used to enhance City services and amenities. It also will help achieve the City’s long-time goal of diversifying our tax base to ease the burden on Cedar Park residents.”
The City Council’s approval of the MDA clears the way for the City to apply for the additional performance-based tax rebates from the State of Texas that are critical for the project to move forward.
The obligations of the City and the developer under the MDA are conditional upon the state agreeing to refund its share of sales and hotel occupancy taxes generated by the development. If the state participates, it’s expected to receive a net benefit of approximately $1 billion in new tax revenue within the first 25 years of the project’s opening.
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