Developers approved to start building 'legacy' $750 million mixed-use project in Hill Country

Austin Luxury Group|August 22, 2022
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Since buying hundreds of acres in Marble Falls more than two decades ago, Darrell Sargent has stayed patient, waiting for the right moment to develop what he has long-viewed as the "the most significant intersection in the Hill Country."

That time has come, as Sargent and the rest of the development team have revealed plans for the $750 million Legacy Crossing mixed-use project, bringing more than 1,000 homes, more than 200 multi-family units and hundreds of thousands of square feet of retail and commercial space to 546 acres at the southeast corner of U.S. Highway 281 and State Highway 71.

"We just are ready," said Sargent, the managing partner of 71/281 Investments LLP. "With the growth in Central Texas, there's so much demand that it's time for someone to really get this thing developed up. ... I'm ready, and my wife's really ready."

The Marble Falls City Council on Aug. 16 approved a development agreement with 71/281 Investments and MMK Ventures LLC, the Austin-based residential developer on the project.

Site plans include 115 acres of commercial space that is expected to total 800,000 square feet of retail and commercial space; the 264-unit apartment "Flatz 281" apartment complex being developed on 13 acres by Z Modular, a subsidiary of Zekelman Industries Inc.; and 1,343 single-family homes on the remaining acreage.

While they're still in the process of soliciting tenants and homebuilders, Sargent said they're going to be breaking ground on space for the first commercial tenant – San Antonio-based Big's Convenience Store – in the next couple months. Once completed, the 6,100-square-foot convenience store will also include a restaurant component, along with up to 10 gas pumps and four electric vehicle charging stations.

They're aiming to start the first phases of residential and commercial development shortly after. Flatz 281 will feature garden-style apartment buildings that will be split into six three-story walk-up buildings. The property will also include a clubhouse with a pool and full amenities, including a bocce ball court, two dog parks, golf simulator, volleyball courts and a patio area with grills and fire pits.

Back in March, Z Modular Project Manager Ryan Wenzel provided details about the Flatz 281 project, saying the company is attracted to the Austin metro because it's a "hot area" and close to a manufacturing facility in Killeen, in between Austin and Waco. The company already has another multifamily project on the ground, Cheatham Street Flats in San Marcos, and is looking around the area for more, Wenzel said. The company is different in that it builds modularly, which primarily allows them to finish products faster than typical development.

"We're trying to find the hot spot areas and get our development going in those areas," Wenzel said.

The name for the full project, Legacy Crossing, pays homage to the fact that the land has only been in the hands of a couple of owners over the last few hundred years – while also paying tribute to those who were involved in the investment over the last two decades.

Back in 2001, Sargent and three friends purchased the property for about $3 million from a rancher whose deed traced back to the 1800s. Sargent's parents lived in nearby Horseshoe Bay and he knew that the intersection – located at a connection of a pair of busy state highways – would be a good investment as the population of Central Texas continues to swell.

"We knew that over time that was going to be a very important intersection," Sargent said.

While they waited, they developed the 72-acre Foxwood subdivision on the property to help pay down some of the investment. They remained patient, rebuffing offers from homebuilders and tenants for the site. As they kept waiting, one of the original investors, Greg Sellards, died of cancer in 2011; he'll be memorialized with one of the streets named after him, with other streets named after original owners, settlers and family members.

"We had opportunities to sell pieces of that frontage over the years. We could have made some money. I just realized we needed to hold tight and wait until growth got us," he said. "I tell people that I have ocean front property in the middle of Hill Country."

With all the remaining members of the development group in their 60s and 70s, that time is now. About two years ago, they sold the residential portion to MMK Ventures for about $4.2 million. He said they're already getting attention from national homebuilders, and hopes that they go with a builder that will offer diversified options.

In terms of commercial, the convenience store is the only official tenant, but they've been inundated with interest there. Sargent said they're hoping to attract national retailers, hotels and restaurants, and that he would love to see a movie theater or national brands like Target Corp. He said natural gas is being delivered to the site, they're putting in high-speed internet infrastructure, and have secured enough water and wastewater for the site, including building a new water tower to service the development.

The property features 84.5 acres of park and open space, including 3.5 miles of trails. Hardwood trees are being preserved.

Like many cities on the outskirts of Austin, Marble Falls has experienced the residual effects of the area's rapid growth, starting with the construction of the Baylor Scott & White Medical Center in 2015, which brought an influx of jobs into the region. It reached a population of 7,227 in 2021, up from 6,077 in 2020, according to the U.S. Census Bureau.

But where Marble Falls stands out economically is as the regional retail, wholesale, trade and service center for that part of the Hill Country. It has a primary trade area of 75,109 people and a secondary trade area population of 108,000, according to the Marble Falls EDC.

That has attracted a wealth of additional development. Marble Falls City Council approved a public-private partnership with Phoenix Hospitality Group LLC to facilitate the development of a Hilton-brand hotel and conference center — a $35 million project that city officials hope will encourage more tourism.

Other large residential developments underway in and around Marble Falls include Centurion American Development Group's 1,100-acre Thunder Rock community and Harvard Investments' 240-acre Gregg Ranch, a 1,000-home project development being developed by Arizona-based Harvard Investments Inc. that is located across the street from Legacy Crossing.

Sargent said he hopes his property will fill in some of the gaps, especially with restaurants that are open late.

"I hope it brings a place where not only people in Marble Falls, but Johnson City and Kingsland, can come and be able to access some of the retail and restaurants that are found in the bigger markets without driving all the way to Austin," he said.


Article By:   –  Staff Writer, Austin Business Journal