Developer Mark IV has made updates to the long-anticipated The District project in Round Rock amid changes to the market. SCREENSHOT OF CITY OF ROUND ROCK DOCUMENTS

Austin Business Journal reports, "one of the region's most-anticipated projects is back on track — and much bigger than previously planned.

Eight years ago, Mark IV Capital, a Newport Beach, California-based commercial real estate firm, purchased a 66-acre plot near Interstate 35 and the State Highway 45 toll road for a project known as The District. But the plans subsequently stalled, mostly due to shifting market conditions stemming from the coronavirus pandemic.

Since then, the size of the project has more than doubled. The District is planned as a $500 million investment that will result in 3 million square feet of development and a minimum of 5,000 jobs at full buildout in 2039. Original plans called for 1 million square feet by 2039 and a $200 million investment.

Developers took a big step toward completion on Feb. 23 when they secured approval from the Round Rock City Council for an amended development agreement. If all goes as planned, that would enable construction to start by the beginning of 2025.

The updated agreement marks a notable step toward getting the project off the ground. Round Rock City Council first approved a development agreement with Mark IV in 2019, followed by approval of a planned unit development zoning in 2021.

Developers previously disclosed plans to increase the scope of the project due to shifts in the market. The original intent was to start with work on a parking garage, coffee shop and city infrastructure, such as roads, sidewalks, detention ponds and underground power lines. The plan also involved construction of a 207,000-square-foot office building, dubbed 100 Marshall Circle, which the company secured permits to build.

However, amid post-pandemic changes to how people work, the office building was put on hold. Still, company representatives stressed on Feb. 22 that they're actively marketing to tenants and will maintain the permits on the first building. They also said they're designing a second 280,000-square-foot office building.

"We spent a lot of time during COVID making sure that we invested the time and effort and thoughtfulness that this building needed in order to be competitive in today's environment," Justin Basie, Mark IV's president of real estate, said on Feb. 22. "I am pleased to say that I don't believe there needs to be material changes to this building in order for it to remain competitive in the foreseeable future."

The update to the development agreement — which is between the Round Rock Transportation and Economic Development Corp. and Mark IV subsidiary M4 Greenlawn LLC — was needed to change previous requirements for developers to build 120,000 square feet of office space by 2022, which hasn't happened. It also allows the developers to begin with other parts of the project if a market doesn't materialize for the office space.

When it comes to vertical development, the plan now is to start with a 320-unit, 270,000-square-foot multifamily building that will include 15,000 square feet of retail with high-end architecture. That will follow the infrastructure work, of which $25 million will be reimbursed by the city's Type B economic development corporation.

The project now includes an urban village at the center of the property that is focused on amenities, such as retail stores and a hotel. There also will be an option to block off the street from vehicular traffic with bollards to improve walkability.

"That translates into turning that vehicular street into a walkable paseo," Baisie said. "I foresee a future where those bollards go up and never go down, and we end up really fulfilling the expectation of creating a real, activated, live, walkable paseo."

The aim is to begin infrastructure and vertical construction by January and finish work in the middle of 2026, with a completely stabilized asset in 2028. The full buildout would be done by 2039 — the same timeframe as the original agreement.

Developers are required to hit certain benchmarks on the project, such as having 200,000 square feet done by 2028, 1 million square feet by 2029 and 3 million square feet by 2039, with 600,000 square feet of commercial and retail space. If they miss those benchmarks, Mark IV is on the hook to pay back money to the city.

City officials estimate the project will generate more than $40 million in combined tax revenue from various sources over the next 20 years with an annual net average of $2 million.

"I think it's exciting, and we're excited for it to get underway," Round Rock Mayor Craig Morgan said during the meeting. "I know COVID changed a lot of stuff on it, but I think in the end we got a better product for everybody."

The city of Round Rock is located just north of Austin and has a population of about 127,000, according to the U.S. Census Bureau.

The District was originally billed as a rival to other live-work-play nodes in the region, such as The Domain in North Austin. Since then, other large-scale, mixed-use projects have been proposed or broke ground on the north side of the Austin metro. Those projects include the $2.2 billion Pearson Ranch community a few miles away, the 116-acre Northline mixed-use project in Leander and the Nebraska Furniture Mart-anchored project in Cedar Park."


Source: Austin Business Journal

Written by: Justin Sayers

Published: February 26, 2024

Posted by Grossman & Jones Group on


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