SAN BENITO — After years of planning, the city’s first resaca-side commercial development is opening for business.
As part of Resaca Village’s first phase, a strip center along the resaca banks features a Tropical Smoothies Café restaurant along with about six open store fronts off Business 77.
Across a parking lot, a Texas Regional Bank branch anchors a strip center featuring about five open store fronts on the 9.8-acre tract across from the Heavin Resaca Trail.
“This is going to be the most attractive retail shopping center in San Benito,” said Cesar Villarreal, director of development and sales with OrigoWorks, a branch of VARCO Real Estate, the Brownsville-based developer which has invested about $2.5 million in the project’s first phase spanning 12,600 square feet of commercial real estate.
According to a leasehold deed of trust, Texas Regional Bank is financing the project for VARCO and developer Carlos Varela, who is a bank director.
Now, VARCO is working with prospective tenants to finalize contracts, Villarreal said.
“Within the year, we’ll be able to fill the plaza,” he said. “We have a lot of faith in this project.”
Along the resaca-side strip center, VARCO plans to fill its store fronts with such tenants as restaurants and retail shops.
“There will likely be entertainment spaces so they can have the resaca view and the back porch,” Villarreal said.
The development is counting on drawing business from across the area including Harlingen’s medical complex.
“The medical cluster is going to be coming to Resaca Village to eat,” Villarreal said.
Lease agreement
In November 2018, the city’s Economic Development Corporation leased 9.8 acres to VARCO.
As part of an incentive agreement, VARCO is paying the EDC 10 percent of the development’s property taxes for 15 years.
After the 15-year period, the contract gives VARCO the option of buying the property for $1.
Resaca dream
For decades, city leaders have dreamed of developing commercial property along the resaca.
“It’s a game-changer,” Rebeca Castillo, the EDC’s executive director, said. “It will increase the sales tax base and there’s job creation.”
Since opening last week, the bank’s branch and the restaurant have created 10 jobs, she said.
Castillo said the city is counting on the development, along with new downtown businesses, to double the city’s annual sales tax collection, now projected at $4.8 million.
“Even with the impact of COVID-19, we anticipate in three to five years sales tax will increase by 100 percent,” she said. “It’s increasing traffic flow. Our community shops local. Our community now has options — shopping and dining.”
Extension requested
Under the EDC’s contract, VARCO plans to invest $3.6 million to develop four phases spanning 30,000 square feet of commercial real estate by December 2022.
The second phase, which VARCO projected to complete by December, will include a boardwalk connecting the development with the Heavin Resaca Trail, Castillo said.
Now, the coronavirus pandemic’s economic impact is leading VARCO to request an extension, she said.
“They’re requesting an extension of the timeline,” she said, referring to construction plans. “We definitely want to be considerate of their needs but we want to ensure there is not a dramatic impact on the timeline — possibly adjusting the timeline by a matter of months.”
Pandemic impacts project
Under the contract, VARCO was required to complete construction of the development’s first phase by Wednesday.
“To date, they have complied with the contract,” Castillo said.
For months, the coronavirus pandemic slowed the project’s development.
In December 2019, a VARCO official projected construction would be completed by the end of last February.
“The pandemic deeply impacted the market,” Villarreal said. “People are more cautious. Everybody put everything on hold. Now, everyone’s plans are back. At this point, they’re taking action on moving forward.”
About VARCO
Based in Brownsville, VARCO is expanding its development in the area.
In Harlingen, its projects include Stuart Place Crossing, which features Texas Regional Bank’s $10 million headquarters.
Since 2003, VARCO has developed real estate property, with projects in Texas, Arizona and Mexico.
Varela, a partner in the real estate firm as well as in OrigoWorks, a design-build architectural firm, is also director of IBEX Business Solutions.
From 2005 to 2019, he had served as a partner and director with Pronto Insurance, with more than 100 locations in Texas.
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.
