City Approves 117-Acre Master Development Near Austin

CEDAR PARK, TX – The Cedar Park City Council has unanimously approved a master development agreement for CPM Development LLC to construct a hotel and convention center, near US 183A in the Austin, TX suburb of Cedar Park, TX.

The approval represents the city’s first step toward securing the 117-acre development, which is expected to generate $435 million in net new city tax revenue within 25 years of opening.

The city council approved the agreement on December 9. Terms of the agreement call for the project to be anchored by NFM, formerly known as Nebraska Furniture Mart.

Located at 750 E. New Hope Dr., the project will encompass a 250-room full-service hotel with a 30,000-square-foot city-owned convention center, 250,000 square feet of commercial development, a 500,000-square-foot NFM retail store, and a 700,000-square-foot warehouse to service NFM.

“This development is a once-in-a-generation opportunity to dramatically expand Cedar Park’s commercial tax base with a single project,” says 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.”

Per the terms of the agreement, CPM Development is required to invest a minimum of $400 million to build the development, which then must generate a minimum of $450 million annually in sales. Additionally, the project must create a minimum of 725 jobs within the first year of opening.

In return, the city will offer a maximum of $45 million in performance-based tax rebates to CPM Development, which will be funded exclusively from city sales, hotel occupancy and property taxes generated by the development. The rebated funds will be partially be utilized to reimburse the CPM Development for costs associated with the on-and-off-site public infrastructure projects that it is required to complete before the project opens, such as major road and intersection improvements.

If the project meets its minimum annual performance obligations, the city plans to retain $435 million in net new tax revenue during the first 25 years that the project is open, representing a gain of nearly 10 times the total amount of tax revenue rebated by the city. However, if the project does not meet the minimum performance obligations, CPM Development 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,” states 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 approval also allows for the city to apply for additional performance-based tax rebates from the State of Texas, which is critical for the project to move forward. The obligations for the city and CPM Development under the agreement are conditional upon the state of Texas agreeing to refund its share of sales and hotel occupancy taxes, generated by the development. If the state participates, it is expected to receive a net benefit of approximately $1 billion in new tax revenue within the first 25 years of the project’s opening.

The project would make Texas the first state in the country to have two NFM home furnishings stores, and it would represent the first NFM store in the country to have an on-site hotel and convention center. NFM is one of the largest home furnishings retailers in the country. The 84-year-old company offers an extensive inventory of furniture, appliances, electronics, flooring and other home goods.

“When looking for future store locations, we have an extensive evaluation process,” says NFM chief strategy and development officer Jeff Lind. “The quality of life and vibrancy of the communities we locate in is very important. Cedar Park offers a great quality of life in so many aspects, which makes it an excellent choice.”