HARLINGEN — Like the economy in the rest of Texas, Harlingen continued to prosper in 2019, with jobless numbers hovering nearly a point lower than the previous year and several new businesses setting up or planning to this year.
Here are the highlights:
Sales tax reimbursements
One of the few concerns for the city is the drop in sales tax reimbursements over the course of the year. Last year the city posted phenomenal monthly gains in the double digits over the previous year, hitting a high of around 14 percent.
But these numbers — they serve as a rough indicator of the health of a city’s retail sector — were down in 2019. Instead of a 5.35 percent increase through October the city saw in 2018, this year the number shows a gain of just 1.27 percent.
“I’ve actually looked at retail sales for the last 20 years, more than 20 years, and if you look at all those retail sales the only big dip was during the recession in 2008-2009,” said Raudel Garza, chief executive officer of the Harlingen Economic Development Corp. “But overall we have seen in the last 20 years about a 3 percent growth rate annually. So that’s Harlingen’s kind of number.
“You can hear about other communities and about how much they’re growing and that type of thing, and maybe they have a spectacular year one year but the next year they’re down,” he added. “Harlingen is very steady and has been at that 3 percent trajectory for the last 20 years … Having a slower year now at this point doesn’t really cause a lot of alarm for me because I think we’re going to make it up.”
Regional perspective
A recent meeting of the HEDC board illuminated some of the differences between cities here in the Rio Grande Valley.
“The Rio Grande Valley as a whole was up 7 percent year-over-year on sales tax,” Beverly Loftus, the HEDC’s commercial development manager, told the board at a recent meeting. “Compared to 4.7 percent if you look at the State of Texas, so we’re almost double what the State of Texas is doing.
“When you look at our per capita sales, Harlingen is actually doing about $19,500 per person, per individual, and about $61,000 per household,” she added. “When you look at San Antonio, that’s actually higher than San Antonio’s market. It shows that we’re actually drawing money from outside the market as well, outside Harlingen.”
McAllen ranks number one in the Valley in per capita retail spending at about $24,500 per person.
“Compared to McAllen and Brownsville, Harlingen has been in the billion-dollar (annual) retail sales for over seven years,” Garza said. “Edinburg has finally joined that club and I think Pharr is finally joining that club. But people talk about their populations and how big they are, they’re still not beating our numbers.”
As Mayor Chris Boswell noted at the meeting, McAllen and Harlingen have run one-two in per capita spending for years if not decades.
“We’ve always been second in highest per capita retail sales,” the mayor said.
T.J. Maxx nears
Drilling down into the local retail scene, low occupancy rates continue to be a problem for Valle Vista mall, and there are other major retailers who are planning to exit the Harlingen market.
Bed, Bath and Beyond and Melrose Family Fashions are on their way out at the otherwise prosperous Harlingen Corners shopping area located just west of the mall.
“I know there are some new retailers that are looking at Harlingen that will be coming into Harlingen,” Garza said, “provided that they make their deal with their landlords. And there’s really no reason why they shouldn’t. Those retailers will make up for some of the lost retailers that have announced they’re going to be shutting down.
“In general, we have big enough market to absorb some of those little bumps and I think we’re going to be OK,” he added.
Part of those retail losses, or maybe even most of them, should be filled by the arrival of T.J. Maxx. The company has filed plans for a $2 million, 20,000-square-foot store at the Shops of Valle Vista located right next to Target, and it should open in May.
“T.J. Maxx will have a significant impact and they will more than make up for some of the other closures that were announced, either last year like Sears or some of these other closures that are coming in at the end of the year, like Bed, Bath and Beyond,” Garza said. “Just looking at their stores in general on a per-store basis, it’s a very significant impact and a positive impact to the community.”
Mall area thriving
Troubles at traditional shopping malls are nothing new, and Harlingen’s Valle Vista mall is not an exception.
Purchased in 2018 for a bargain $12.5 million by Kohan Retail Investment Group of New York, in October a notice was posted the mall’s power would be cut off due to non-payment of its electric bill.
The cutoff was averted, but questions about the mall’s viability remain.
“I don’t know that it’s holding us back, people are looking at Harlingen not just for one particular property,” Garza said.
“The guy who owns Harlingen Corners is talking about some other retailers that are coming in,” he added. “Some of it will be replacing stores that are leaving, like Bed, Bath and Beyond and Melrose.”
While Valle Vista may be having its troubles, the retail area surrounding the mall is booming with Walmart, Target, Hobby Lobby, PetSmart and Bass Pro Shops and Sam’s Club stores leading the way, making it the city’s most important shopping area.
Harlingen Corners is just a couple of golf shots west of Valle Vista, and the rising Shops at Valle Vista where T.J. Maxx will locate is just across Dixieland Road from the mall.
“Despite the mall not attracting more and newer retailers, that entire area, because of the mall, because of the location and because of Bass Pro Shops, there are things that have developed next to Sam’s and there’s still a big piece of property that we’re hoping will eventually be more retail and I think it will be,” Garza said.
“But retail has shifted,” he added. “Gone are the big 100,000-square-foot boxes and now they’re being replaced by 20,0000-square-foot boxes or 5,000-square-foot boxes. So it takes more tenants to fill a shopping center whether it’s a traditional mall or a power center. It takes longer for a developer to line up all those deals so he can get the financing to make it happen.”
Los Indios bridge
In April of 2018, the first produce trucks began to cross the Free Trade International Bridge at Los Indios to take advantage of a new, $525,000 cold storage inspection facility that would ensure produce stays cold while being cleared for entry into the United States.
City officials hoped the bridge crossing, half-owned by Cameron County with the other half split by the cities of Harlingen and San Benito, would become an alternative to the heavily used truck crossing at Pharr.
When asked if Harlingen officials are satisfied with the performance of the bridge, Garza said, “Short answer? No.”
“We’d like to see more but it wasn’t a very large investment,” he said. “It was an investment that will pay itself off. There has been an increase in revenue, there has been an increase in traffic, but I’d like to see more and I think we can see more.”
Garza said a new Spanish-language HECD website is almost ready, and he hopes it will help drive more traffic to the bridge, traffic traveling both north and south.
“We’ve been working with the Tamaulipas government on some projects that they have in trying to work together not only on the marketing aspect but they’re building little casitas as they call them which are for lack of a better term an outpost for public safety,” Garza said.
“So there will be some state police that will be located in these casitas,” he added. “One will be just to the east of the bridge and then the other one will be closer to Reynosa … with that protection and security, there will be more traffic that will drive through that area.”
Harnessing the wind
One of Cameron County’s most constant and untapped resources continues to bring money to the Rio Grande Valley.
U.S. contractor Infrastructure and Energy Alternatives announced in December it will spend $115 million to build two new wind farms across Willacy, Cameron and Hidalgo counties.
Total investment into Cameron County wind farms is now into the billions, and while Harlingen doesn’t directly benefit from this spending, there are ancillary benefits.
“There are people working there that are living probably here in Harlingen,” Garza said. “So that’s one of the benefits of having those wind farms. Obviously there’s the wind program at TSTC that’s really kind of helping feed that labor pool.
“There are now manufacturers for the blades in Matamoros, and that’s really close to the Los Indios bridge,” he added. “There are other companies that are looking right now, actually locating on the Mexican side because labor’s cheaper over there but then doing business on both sides.”
Garza said after a decade, wind power in the Valley is becoming a mature industry and the infrastructure to move electricity into the Texas grid via high-power transmission lines is pretty much in place.
Health care’s rise
Harlingen has a growing reputation as a regional destination city for medical care. But the arrival of the University of Texas Rio Grande Valley is set to transform medical research and treatment.
“What they have done as far as changing the landscape of medical care, they’ve bought out some of the existing health clinics and have enhanced them and have made those doctors feel more comfortable conducting what they know how to do, which is to take care of people and not necessarily about running a business,” he said. “UT Health is going to continue to do that, not just in Harlingen but throughout the Valley.”
A new era in Harlingen’s medical history began in November with a groundbreaking for the UTRGV Institute for Neuroscience. The $30 million facility at Haine Drive and North Whalen Road was decades in the making and will be under the umbrella of the UTRGV School of Medicine.
“That’s going to be fantastic for us, and will open a lot of doors for us,” Garza said. “A component of our marketing strategy is geared toward health care, toward biosciences and that type of thing.
“So we will be attending some of these bio shows where we can get in front of some of the researchers and some of the manufacturers of medical devices and hopefully be able to attract some of those to this area,” he added. “That’s huge for us.”
