SAN BENITO — Some city officials are raising questions stemming from a real estate listing showing a proposed multi-million-dollar development’s project site among a 65.9-acre parcel on sale for $10 million.
A Keller Real Estate Investments website was posting the listing of farmland off Interstate 69 at FM 509 as being active for 121 days as recently as Feb. 2.
It was unclear whether the listing remained posted Thursday.
On Thursday, Dawn Elsik with Keller Real Estate Investments referred questions to Linda Merritt, spokeswoman for the RGV Epicenter project.
“It’s an eye-opener,” Mayor Rick Guerra said, referring to the listing.
Guerra said developer David Miles, with Friendswood-based Western Spherical Developers, is expected to meet with city officials to discuss launching what would become the city’s biggest project whose groundbreaking ceremony was held in 2021.
“He’s supposed to come to us and talk to us about starting,” Guerra said. “I’m just waiting to see when he’s going to start. The people don’t know. I’m going to ask him, ‘Why haven’t you started.’ There are still questions the people are asking. ‘Is it coming or not?’”
Guerra said Miles told officials high materials’ costs held back the project’s launch last year.
“Last year, they said they couldn’t start because the materials were too high,” he said. “He was supposed to come in now and talk to us and get back on track and start going.”
Land ‘under contract’
In response to questions surrounding the real estate listing, Merritt stated the developer has the land “under contract.”
“The property in question designated for RGV Epicenter continues to be under contract as details continue to be finalized,” Merritt stated. “The listing allows the developer to attract interest from potential tenants and interested parties. This assists in facilitating discussions of sales for outlying plots and specific sites within the RGV Epicenter footprint.”
Questioning viability
For months, City Commissioner Pete Galvan has questioned the project’s viability.
“I’m still pending financials and a balance sheet,” he said. “I’m still not convinced about the whole project. I still have questions. I still have doubts about the project.”
Galvan has also expressed concern city officials are spending staff time on the project being planned since 2018.
“Our investment is our time — Manny’s time, the city attorney’s time, code enforcement,” he said, referring to City Manager Manuel De La Rosa, City Attorney Mark Sossi and the code enforcement staff.
Project drawing interest
Meanwhile, the project is drawing more interest, Merritt stated.
“Interest in the development has expanded discussions with potential amenities,” Merritt stated. “These negotiations are complex and carefully navigated. This is a positive element to the development progress. More detailed information will be released as soon as these discussions are finalized.”
$180 million first phase
At the project’s October 2021 groundbreaking, Charles H. Johnson IV of Chicago-based Johnson Consulting, representing the developer, said the $180 million first phase was expected to be “completely out of the ground and open (in a) 2025 or 2026 time frame.”
The project’s first phase was expected to include a hotel and convention center, an entertainment center, a performance hall, restaurants, retail shops, office suites and a lagoon.
Tax zone created
A month after the project’s groundbreaking, city commissioners passed an ordinance creating a tax increment reinvestment zone along the 115-acre proposed project site near FM 509 and Shafer Road.
Within tax increment reinvestment zones, property taxes generated from new improvements are set aside to finance further improvements within the zone’s boundaries.
At the time commissioners created the zone, Sossi told them the tax zone would not lead the city to incur costs.
Meanwhile, Merritt said Miles had requested the city create the tax zone.
During the first five years of the tax zone’s 15-year lifespan, Miles would derive 100 percent of revenue generated through the project’s property taxes, Commissioner Rene Garcia said at the time of the zone’s creation.
Afterward, the city would begin reaping the tax zone’s revenue, he said.
During the tax zone’s second five years, Miles would draw 75 percent while the city would take 25 percent of the revenue, Garcia said.
Then, during the tax zone’s last five years, he said, the city would derive 50 percent of revenue.
After the tax zone’s expiration in 2036, the city would collect all property taxes, he said.
Background
What would become the city’s biggest economic development project would create 1,013 jobs along with an additional 1,077 jobs during a three-year construction period, Miles has said.
As part of the three-phased project, Miles proposed the development of a sprawling “village” featuring two hotels, an entertainment center, a sports complex, restaurants and retail shops along with a five-acre “Crystal Lagoon.”
About four years ago, Tammy Huerta, daughter of the late Grammy-award winning singer Freddy Fender, helped spark talks with De La Rosa, Miles said.
Two House bills would help Miles fund costs through hotel occupancy tax revenue.
In 2019, city officials worked with state Sen. Eddie Lucio Jr. and state Rep. Eddie Lucio III to push for House Bills 4347 and 2199, which allow cities to spend hotel occupancy tax revenue generated through developments to fund construction of convention centers and sports and entertainment projects.
