There have been mixed reactions from Killeen leaders and others to the news of a potential $51 million apartment complex that could be built in north Killeen, not far from downtown where most buildings are vacant and revitalization efforts have failed.
Some local downtown business owners have said the new complex could bring more traffic and help business in downtown.
Josie McKinney, the owner of Let’s Eat Texas, a restaurant and culinary school in downtown Killeen, spoke about business in downtown and how the new complex could improve traffic in downtown areas.
She she opened up in downtown two years ago, “the business that is caddy corner to me has had at least six renters for a restaurant on East Avenue D,” McKinney said. “Downtown is a ghost town at night and on the weekends and some of that is the vacancy, some is the stigma with the homeless population but most of that is because we don’t have enough businesses here. When the H-E-B left downtown it was very impactful to the traffic in downtown. We’re going backwards and to bring more people in is only going to attract more business.”
The apartment complex, if built, would house hundreds, perhaps thousands, of people.
Proposed by Ohio-based apartment developer NRP, the project would be located on 25.77 acres of land near the intersection of Business 190 and W.S. Young Drive. The gated complex would be made up of 368 apartment units, a number subject to change, geared toward a wide income level.
Amenities would include a clubhouse, resort-style pool, a state-of-the-art fitness room, a coffee bar, conference rooms and others, officials said.
Those who live there would be near the Killeen Mall, near multiple city parks, near the city’s community center, and perhaps most important to McKinney, near downtown Killeen.
McKinney added that the possible new housing could be beneficial to the military population in Killeen and Fort Hood.
“We’re a military town so we don’t just rely on people that will be here for years and years but people that will be here short term, and they seem like they will be nice enough but not too nice to rule out the people that will need them,” she said.
Others in favor of the potential construction have said it could start the process of reviving the downtown area, but those against the idea have cited the 75-year property tax exemption associated with the deal.
On the surface, it’s a nice new, $51 million development in north Killeen, and could give a boost to that area of the city, which is marked by aging housing, deteriorating infrastructure and a lack of grocery stores. In nearby downtown, storefronts have a 70% vacancy rate, officials said.
The apartment complex, if built in conjunction with the Killeen Public Facility Corporation, would be tax exempt, but this requires 50% of units be leased to families who earn 80% or less of the median income for Killeen. Killeen’s median household income is $53,101, according to numbers from the Killeen Economic Development Corporation.
Killeen Mayor, Jose Segarra, broke the 3-3 tie of the council to push the project forward at last Tuesday’s meeting by approving the public facility corporation. The council will vote later on whether to facilitate the project using the public facility corporation, although the costs of construction would come from NRP.
Longtime local developers have come out against the project, calling the tax exemption unfair and a bad deal for Killeen.
But for the mayor, the project’s benefits outweigh the costs of not collecting taxes on the property for the better part of a century.
“I have always pushed for positive growth for our Northside of the city. A lot of the businesses that once used to be in the north side near or around our downtown area have moved because a lack of sufficient shoppers. As a business owner, I understand that what businesses need more is people coming through their doors to do business, the more people the better for them,” Segarra said. “I believe this apartment complex will put more people in our Northside and closer to our downtown and have a positive impact not only for those businesses in Northside but also for all the residents there.”
Killeen City Managaer Kent Cagle said the city would receive, as an origination fee, $350,000 at closing, plus about 3 acres of land on the corner of Terrace and W.S. Young Drive, which the city can sell or encourage business development. Then, starting in year four after completion, the city would receive, via cash flow from 15% carried interest amounts of well over $100,00 per year.
John Crutchfield is the president of the Killeen Economic Development Corporation and he talked about what the project could do for Killeen in an email on Thursday.
“Given the high demand for housing that exists in this community, it will provide needed supply. Since 50% of the project will be rent restricted based on income, it will also provide affordable housing for the community,” Crutchfield said. “More people living in north Killeen and proximate to downtown is a good thing. The project could serve as a catalyst to create more economic viability, to include a grocery store in north Killeen.”
Councilwoman Debbie Nash-King was one of the three council members who voted in favor of the project.
“I voted for the apartment complex because there has not been any new development in that area to enhance the quality of life for the residents living there. In my opinion, I believe this project will be a jumpstart to opening doors for other new businesses to relocate in that area,” Nash-King said. “We have to face reality, the downtown area has been declining for several years. Two grocery stores closed, churches relocated and one of the largest private business’s downtown is planning to move to a new area. Presently, we have over 70% of retail space that is vacant. We will have to create a better environment to get businesses to relocate downtown in order to create jobs plus better housing.”
Council members Steve Harris and Shirley Fleming also voted for the public facility corporation, but the Herald did not get their responses for this report by the deadline.
Councilman Ken Wilkerson spoke up in an email on Wednesday about why he decided to vote against the project.
“I voted against the deal because of the numbers. A tax exemption of that that size (75 years) for this project gives away too much. I believe we have an obligation to protect KISD, Bell County, and other entity’s ability to collect the taxes they need to provide services to the people of Killeen,” Wilkerson said. “I would definitely have a problem if KISD exempted a private business from paying city taxes for close to a century, while the city maintained the responsibility of providing services such as police, fire, and adjacent road maintenance etc., to that project — especially for 75 years.”
Councilwoman Mellisa Brown echoed some of the same sentiment that Wilkerson shared with her decision to vote in opposition.
“I don’t think it’s smart to get involved in a 75-year contract with anyone. The City will be responsible for infrastructure upkeep for the roads, sidewalks, water and sewer lines, and park but we will not receive any tax revenue for it. The traffic already gets congested in that area and this will only make it worse,” Brown said. “I also still have concerns about what this will do to property valuations in that general area and the potential that it will dislocate residents.”
New councilman Rick Williams was the third vote against the project on Tuesday.
“My vote was cast against the progression of the $51 million apartment complex in North Killeen based upon input over the past two months of citizens from every corner of our city. There were those who thought it was a good idea, as well as those who were against. In the end, the majority of the opinions that I heard did not feel that this project was right for our city at this time,” Williams said. “They were concerned about the lack of revenue in the form of taxes to be receive over 75-year period, concerned that in the future the city would be required to provide services to this complex just like every other building or development within the city and that city services would be stretched.”