SAN BENITO — San Benito’s biggest commercial development in decades appears to be pulling out of the coronavirus pandemic’s economic slowdown.
Resaca Village, the city’s first resaca-side commercial development, has booked three new tenants, including two restaurants.
Meanwhile, the city’s Economic Development Corporation is granting developer OrigoWorks a second extension to launch Resaca Village’s second, third and fourth phases along a 9.8-acre tract across from the Heavin Resaca Trail.
“We felt they had to work a little harder,” City Commissioner Rene Garcia, who also sits on the EDC board, said Wednesday. “We’re all concerned. San Benito isn’t known as one of the destination places in the Valley so it’s harder to attract (tenants). I know they’re working hard.”
New tenants
After opening in September 2019, about six months before the pandemic out break here, the developer filled two of the plaza’s 12 spaces with a Texas Regional Bank branch and a Tropical Smoothies Café.
Now, new tenants include Calacas Tacos and Beer, Frankie Flav’z Craft Burger House and Cold Stone Creameries, Jaime Alardin, part of OrigoWorks’ development team, said.
“We have a synergy,” he said. “They are tenants at other plazas. Every time we build a plaza, they want to grow with us at the plaza.”
While Calacas is expected to open in about two weeks, Frankie Flav’z plans to move in in late March while Cold Stone is coming in April, he said.
“Once Calacas opens, it’s going to bring a lot more traffic,” he said. “There’s going to be movement.”
The developer is counting on Calacas, which is drawing steady business at other OrigoWorks plazas, to open the door for other restaurants and shops to book spaces, Alardin said.
“We have one prospect that’s very interested,” he said. “We have people calling for information.”
Coronavirus pandemic’s impact
The developer cited the pandemic’s economic slowdown as the factor behind Resaca Village’s sluggish start.
“It’s been tough on new businesses,” Alardin said. “It’s been kind of slow. The interest of new prospects is growing day by day.”
For the development’s second phase, OrigoWorks is planning to draw a mix of restaurants and retail shops.
“On the resaca side — that’s all restaurants,” Alardin said. “On the bank’s, we do a mix of retail.”
EDC’s second extension
Citing the pandemic’s economic slowdown, the EDC is granting the developer a six-month extension to launch the development’s second phase.
In July, the developer is set to begin construction expected to be completed in December, Rebeca Castillo, the EDC’s executive director, said.
“It’s going to be a copy of the existing plaza, with the same amount of spaces — around 12,” Alardin said.
As part of an agreement, Texas Regional Bank is requesting the developer fill 80 percent of the $2.5 million Phase 1 development before it finances the second phase, Castillo said.
Under a leasehold deed of trust, the bank is financing the project for OrigoWorks and developer Carlos Varela, who is a bank director.
“We’re working more and more aggressively to fill it,” Alardin said. “We think in six months all the existing plaza will be occupied.”
Last year, the EDC granted the developer a one-year extension to complete the project.
Under the EDC’s contract, the developer was planning to compete the project’s four phases spanning 30,000 square feet of commercial real estate by December 2022.
Now, the EDC is granting OrigoWorks a six-month extension, allowing the developer to complete the project’s second, third and fourth phases by the summer of 2024, Castillo said.
Castillo cited the pandemic’s economic slowdown as the factor leading the agency to grant its latest extension.
“It slowed them down, especially in the construction of Phase 2, with the shortage of materials and costs of materials increasing,” she said.
Lease agreement
For decades, city leaders have dreamed of developing commercial property along the resaca.
“It’s a gem in our town,” Garcia said. “It’s something that’s always been talked about — and now we have it.”
In November 2018, the EDC leased the developer 9.8 acres.
As part of an incentive agreement, the developer is paying the EDC 10 percent of the development’s property taxes for 15 years.
After the 15-year period, the contract gives the developer the option of buying the property for $1.
About OrigoWorks
Based in Brownsville, OrigoWorks has been expanding its developments in the area.
In Harlingen, its projects include Stuart Place Crossing, which features Texas Regional Bank’s $10 million headquarters.
How we got here
In 2013, the EDC used $900,000 out of a $1.2 million federal grant to buy the 9.8-acre property then planned as the site of a so-called resaca boardwalk expected to feature shops and restaurants near a museum at the former site of the once-sprawling Guinzy’s Resaca Motel, razed more than 10 years ago.
Later, the city scrapped the project after officials determined a previous grant stipulated the proposed federally funded museum, planned to house the San Benito History Museum, the Texas Conjunto Hall of Fame and Museum and the Freddy Fender Museum, be built off Heywood Street.
