Waco's economy benefits amid final season of 'Fixer Upper'

Waco, Texas • On a recent Thursday afternoon at Magnolia Market at the Silos, tourists line up for $3.50 “shiplap cupcakes” where mill workers once weighed wagons of cottonseed.

The Waco Tribune-Herald reports in the shadow of the rusted silos, children toss beanbags on a village green of artificial turf. Parents slouch in striped beanbag chairs. Food trucks dispense wood-fired pizza, crepes and pineapple-kale smoothies.

A young woman from St. Louis walks out of the retail store with a $70 wooden sign: “Laundry: Wash-Dry-Fold.” A journalism teacher from Chino, California, carries a wreath of artificial magnolia leaves, as seen on “Fixer Upper,” the wildly popular home improvement TV show that is about to start its fifth and final season.

A retiree who has flown here from Chandler, Arizona, boards the “Silo District Trolley” with her goodies, content with having been to the capital of the lifestyle empire that Chip and Joanna Gaines have created from their TV fame.

How big are the Silos as a tourist attraction?

Bigger than the Alamo.

This year, with an average of more than 30,000 visitors a week, Magnolia Market should draw about 1.6 million people, according to the Waco Convention and Visitors bureau. Those include four chartered buses that have carried tourists from New York to Waco over the past year.

The Silos are the signature of a growing Waco company that now employs 600 people, according to the Greater Waco Chamber of Commerce.

But it’s not the stuff that brings the crowds. It’s a brand, the glow of a couple have become icons of faith, family and affordable home design to millions of Americans.

“I don’t think I’ve ever felt this way about any show before,” said Annette Deming, the California journalism teacher, who made a three-hour roundtrip to Waco while attending a convention in Dallas. “I think it’s because of the strong marriage they have. I resonate with this idea of getting into a project with the person you love. . I really do love (Joanna Gaines’) style. She’s super talented.”

Tuesday marked the beginning of the end for “Fixer Upper,” the show that has become HGTV’s biggest hit, catapulted the Gaineses to national fame over the last four years, and served as a weekly infomercial for Waco’s homey charms and affordability.

The show’s fourth season ended in March with a peak of 5.21 million viewers, the second-biggest cable telecast of the second quarter of the year, according to Variety.

Then, in September, the Gaineses announced they would walk away from the show and devote their attention to their other business projects and their four children.

Since then, Waco water-cooler talk has centered on whether this is also the beginning of the end of the Gaineses’ cultural relevancy and for the jolt they have brought Waco’s economy.

Are Chip and Joanna a fad that will fade as the fickle American public moves on to other charismatic personalities? Is the much-touted “Magnolia effect” — the force that has filled hotels, roiled the local housing market and fueled a downtown development frenzy — just a bubble?

As you might expect, local tourism and economic development officials say no, as do local businesses who have hitched their wagons to the Gaineses’ star.

“I absolutely believe it has staying power,” Waco Main Street manager Andrea Barefield said. “They have so many irons in the fire. . What we need to do is take this and capitalize on it and really create a brand for Waco. . We’ve invited millions of people into our home. For organizations like ours, the challenge is, ‘Let’s make sure the front porch is swept, that we change out of the flowers and have curb appeal.’ ”

Retail and branding experts from outside Waco agree the Magnolia brand, and the halo effect it has brought to Waco, can continue to grow if the Gaineses and the community play their cards the right way.

Adam Hanft, a nationally known brand strategist based in New York, said the Gaineses’ decision to shift attention to their home and hometown could actually bolster the wholesome image they have already earned. Ultimately, they could return with another TV show, perhaps focused on a different topic, such as parenting or entrepreneurship.

“The potential is there,” Hanft said. “People like homecoming stories. It’s a good time to demonstrate their impact on the town, and what it’s done for their relationship and their values to raise their family there. . If (audiences) like the people in a show as they do in this case, they give them permission to move into other territories in their lives. That would be great for Waco.

Kelli Hollinger, director the Center for Retailing Studies at the Mays Business School at Texas A&M University, has talked to Magnolia officials when they have come for recruitment visits.

Hollinger said she’s impressed with the company’s strategy of starting with “content, brand and story” and moving into “merchandise and experience.”

“I think they will have continued national visibility,” she said. “They’ve made huge investments in their brand. It is really strong. It will be up to them to see how deep those emotional connections are with their followers.”

Magnolia spokesman Brock Murphy declined to comment for this story and said the Gaineses are taking a break from interviews. The couple is vacationing in Italy after wrapping up filming.

But those who know the couple say they have a strategy to make Magnolia a lasting brand.

“I’ve seen some of their internals and the consultants they’ve brought in to make the company stronger,” said Ryan Gibson, a founding partner of the Rydell real estate and investment firm who has known the Gaineses about a decade. “You don’t invest that kind of money without a long-term plan. . I think they could license their name, and with anything they put their brand behind, sales will exponentially increase. The home improvement industry is pretty big, and that could last lifetimes.”

Magnolia Silos, which opened in 2015, is only one piece of the emerging Magnolia business empire. Other ventures include include:

• Magnolia Home, a line of furniture and accessories that has commanded space at Nebraska Furniture Mart, Bed Bath & Beyond, and Bob Mills Furniture

• Hand & Hearth, a home décor line of 300 everyday items that was introduced this month at every Target store in America, with its own “store within a store”

• Books, including “The Magnolia Story,” which topped the New York Times best-seller list a year ago, and “Capital Gaines,” by Chip Gaines, also a best-seller since its release in October

• Magnolia Journal, a quarterly lifestyle magazine introduced this year, with a newsstand price of nearly $8. Its last issue went out to 700,000 subscribers, plus 300,000 newsstand sales, and 1.2 million copies will be printed for the spring issue

• A top-tier social media presence: Joanna Gaines’ Instagram account has 5.6 million followers, and the Gaineses’ Twitter accounts have a combined 1.2 million followers

• Magnolia’s two short-term rental properties in Waco and McGregor, which are booked for months solid

• Magnolia Table, a destination restaurant that is to open early next year in the historic Elite Café building on the Circle.

The economic impact of all that on Waco is hard to quantify, because Magnolia doesn’t share sales numbers, and sales tax numbers can’t be traced to individual businesses. But it appears this young company is now among Waco’s top 20 employers, on par with Texas State Technical College.

But tourism officials say the spinoff has been dizzying. Attendance at Waco-area attractions is estimated to be 2.6 million this year, a fourfold increase over 2015, the Convention and Visitors Bureau reports. Hotel occupancy rates in the second quarter of 2017 were 75.5 percent, the second-highest in the state, and hundreds of new hotel rooms are under development.

“Our colleagues in the convention and visitors industry are very jealous,” said Carla Pendergraft, marketing director at the bureau. “They ask us what it’s like, and I say, ‘lightning in a bottle.’ We make sure people understand we just kind of got lucky. But maybe we were due for a little good luck.”

Along with that traffic have come dozens of new eateries, shops and food trucks. Local artisans have benefited from their exposure on “Fixer Upper,” including Clint Harp, whose furniture craftsmanship at Harp Design Co. has won him a show on the DIY network, called “Wood Work.”

The Magnolia effect has drawn some grumbling in Waco, too. It has brought too much traffic and not enough parking in downtown Waco, critics say. Some blame it for skyrocketing downtown property tax values, which increased 20 percent this year and 31 percent the year before, though the 2015 readjustment was strongest by the Brazos River, not the Silos.

Some say it has caused a housing speculation bubble in Waco. Some have had enough of shiplap and subway tiles in home décor, or the scripted cuteness that comes with the reality show territory.

Matthew McLeod, a Waco real estate agent who sells mid-priced and upscale homes, said Chip and Joanna Gaines deserve credit for bringing visitors and visibility to Waco. But he said the idea that Waco has boomed because of Magnolia is overblown.

“I think they’ve done great things,” McLeod said. “They have a great company. But I’m not sure you can say Waco has grown thanks to Magnolia. I think there’s 50 components to that growth.”

Those would include Baylor University’s expansion, Waco’s desirability as an affordable place to retire, and the rise of businesses such as SpaceX, he said.

“A lot of people are moving to Waco from other Texas cities,” McLeod said. “I’ve sold a couple of houses to people who didn’t want to deal with Austin and Dallas. I haven’t had a single client I’ve sold a home to in the last three years that has cited ‘Fixer Upper’ as a reason.”

McLeod wonders how much of the real estate boom in downtown is based on speculation.

“I’ve thought everything is comically overpriced,” he said. “It’s very much a field of dreams scenario. In my opinion we are building and hoping they will come.”

But economic development officials say the crowds in downtown are real enough. The challenge is keeping them coming.

Magnolia Market itself is continuing to add new attractions, including plans to expand “Chip’s Corner,” from a small space in the main store to a man-friendly shop that would go into one of the empty silos.

David Littlewood, who has helped finance the Gaineses’ Waco ventures as president of TFNB Your Bank for Life, said he’s willing to bet on the couple’s staying power.

“In my opinion, they’re transitioning to bigger and better things,” Littlewood said. “I know they’re kicking around several cool ideas. I wouldn’t be surprised to see a boutique hotel or other venue to broaden the Magnolia appeal.”

Other downtown attractions are increasingly giving tourists a reason to come back to Waco, even if they don’t visit the Silos, said Megan Henderson, executive director of City Center Waco. That includes restaurants and destinations such as Balcones Distilling, but especially businesses in the design category, she said.

“What has the potential to be a really big deal for the staying power of Waco is to have a place with a home furnishings buying experience,” Henderson said. “We’ve got a lot of businesses that do home furnishings but with actual designers running those places — businesses like Honey’s Home+Style and Christi’s — who can do a lot more than sell you an object. For people who are looking for taste cues, ideas and guidance, inspired by the aesthetic of someone they trust.”

That idea of selling an experience rather than merely a product echoes the story of the silo property and its reinvention for the 21st century economy.

A century ago it was Brazos Valley Cotton Oil Co., a hub for the local agricultural economy, allowing farmers to turn their cottonseed byproduct into oil and cattle fodder.

Now, with that agro-industrial history long gone, Magnolia Market sells cotton-boll bouquets for $9 a pop. But what it really sells is a lifestyle, what Pendergraft calls a “curated experience,” reflecting a unified aesthetic that’s rustic and sleek, modern and nostalgic. Ultimately, it’s an extension of Joanna Gaines’ personality, Pendergraft said.

“Absolutely she is the next Martha Stewart, the next Oprah, that level of a personal brand,” she said.

Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce, said Waco is fortunate to be identified with a brand that people associate with peace, harmony and sincerity.

But she said Waco’s brand has also shaped Magnolia. The Silos, she noted, moved into a downtown district that had already been on the rebound for a couple of decades, with lofts, restaurants, shops and a first-class farmers market.

“I think Waco was already in a really strong place and moving in a positive direction before Chip and Joanna decided to redevelop the Silos,” Collins said. “Shane and Cody Turner really pioneered the way of making downtown a place you could see and envision. . What the Silos and ‘Fixer Upper’ have done is to be a catalyst for growth to increase the speed of development.”

Waco isn’t the first town to get a business bump from a reality television show. When “Duck Dynasty” was at its peak about four years ago, Monroe and West Monroe, Louisiana, were jammed with tourists wanting to see the Robertson family’s hometown and buy their duck calls and other outdoor gear.

That show seized up to 12 million viewers in 2013, a year in which the company’s licensing deals reportedly brought in $400 million.

The show’s popularity declined steeply in recent years before its cancellation this spring. Some blamed the drop on controversial remarks star Phil Robertson made about gays and African-Americans, while others said the novelty of the characters wore off.

Still, the family’s hometown continues to get a steady stream of visitors, and restaurants and a bakery have sprouted as a result of the traffic, local officials said.

“It’s peaked, it’s off the air, but it’s syndicated,” said Alana Cooper, head of the Monroe-West Monroe Convention and Visitors Bureau. “The peak of the tourism has passed, but there’s still a long tail of visitors who love the family.”

Hanft, the New York brand strategist, said the Gaineses should have more staying power than the stars of “Duck Dynasty,” who were seen more as amusing eccentrics than role models.

“They never had much of an emotional connection in the way this couple has,” Hanft said.

Hollinger, the A&M retail expert, agreed.

” ‘Duck Dynasty’ seems like a fad, and it’s fading,” she said. “Magnolia has the lessons of looking back at past fads to see how it can be different. Their infrastructure investment in the Silos ties their brand to an experience, allowing their fans to immerse themselves in the Magnolia story.”

That brand appears to cross generational lines. In line for cupcakes at Magnolia Market, Emily O’Connor, 29, of St. Louis, said she came up for the day with her younger sister and a friend who lives in Austin. All three women said they follow Joanna Gaines on Instagram and will continue to look to her for design cues.

“The brand she has created is really the style that’s in right now,” O’Connor said.

O’Connor graduated from Baylor in 2012, and she marveled at how much the town has changed since then, partly as a result of “Fixer Upper.”

“When I was here, there was nothing,” she said. “We called it the Baylor bubble. If you wanted anything you had to drive to who knows where. Now, I feel like you’d never have to leave.”