A 101-acre project from Houston-based NewQuest Properties that is billed as a new "lifestyle center" for Kyle has secured an estimated $41 million in incentives to aid with the $250 million development.
The company on Dec. 19 received final approval for a slew of agreements from both Kyle City Council and Hays County Commissioners Court for the "Vybe Park" project located on the east side of Interstate 35 on Bebee Road.
Back in August, Newquest — operating legally as Home Asset Inc. — provided the first details of the project, which is set to include space for big box retailers, restaurants, multifamily living, communal gathering and more. The company and city of Kyle have since been working on a number of agreements to move the project forward, including a development agreement, land annexation and zoning, establishment of a tax increment zone and incentives.
As part of those agreements, developers plan to build approximately 450,000 square feet of retail space on 72 acres, and a total of 426 one-, two- or three-bedroom units on 29 acres. The project is estimated to have a capital investment of at least $250 million, create at least 800 full-time jobs and generate at least $2.5 million in sales taxes and $1 million in property taxes annually.
"The whole idea here is creating a lifestyle component where we get people coming from outside of the city to come here, shop, stay, work, play and do all of their activities," NewQuest Senior Vice President Andrew Alvis said back in August.
Alvis cautioned at the time that design was in early stages, but he said the goal of the project was to establish a major retail center with large pads for big-box retailers and smaller ones for restaurants and stores, along with mixed-use components that include apartments with small retail on the bottom floors. Vybe Park could also include a central lawn that would be home to events, like farmers markets, movie showings or live music, gathering and play areas, and connection to the city's Vybe Trail — the inspiration for the name.
The three-story multifamily community would be developed by Houston-based Transwestern Commercial Services LLC. Architecture is aimed to channel both modern industrial and farmhouse designs, with a mixture of brick, steel and green spaces.
The Kyle City Council approved incentives for the project — codenamed in discussions as "Project Hot Pursuit" — for approximately $41 million in incentives from both the city of Kyle and Hays County in the form of a Chapter 380 agreement, TIRZ, public infrastructure improvements, land acquisitions and more. Approximately 76% of that comes from the city. The project is anticipated to have an estimated net benefit of $93 million through 2053 through sales and property taxes, including $65 million to Kyle.
The incentives agreement is performance-based, and the company is required to hit certain benchmarks, including permitting 100,000 square feet of retail space within two years, 200,000 square feet of retail after four years, 300,000 square feet after six years, and completing the urban district within nine years. As a way to promote local business, the project is also required to have at least 10% of the retail be owner-occupied.
Victoria Vargas, Kyle's economic development director, said during the Dec. 19 meeting that "we've poured our hearts into this project" for almost two years and that the city feels it has brought the "best possible project" together for a long vacant lot. She added that it will help with "retail leakage" as estimates have shown that 61% of retail shopping leaks out of Kyle visits to other nearby cities, leaving the Kyle without precious sales taxes to add to their tax rolls.
"The benefit of this project is the retail leakage that we saw outside of the city and outside of the county," Vargas said. "So we don't have to go north or south anymore when this project comes to life for our shopping and dining and entertainment needs as well."
Hays County Judge Ruben Becerra said during their Dec. 19 meeting that the site is a "magnificent project along the corridor."
"Just wait for it. Wait until you see the illustrations. It's going to be huge, it's going to be wonderful, and thank you commissioners for doing your part," he said.
Kyle is about 20 miles south of Austin and had an estimated 2022 population of about 57,500 — about 11% year-over-year growth that ranked it as the third-fastest city in the country among those with a population of at least 50,000.
That population growth has attracted an influx of new employers and large-scale development, such as more retail and mixed-use projects. Other notable companies that are opening in Kyle include Sovereign Flavors Inc. and Tesla Inc. Other retail projects include Costco Wholesale Corp., Sprouts Farmers Market, a 155-acre mixed-use project that includes the new St. David's Hospital, and a 45-acre high-quality mixed-use development that includes kayaks, paddle boarding and rooftop pickleball courts.