The Nueces County Commissioners agreed last week to sale 45 acres of fairgrounds property to a private developer to build a large outlet mall in Robstown, fulfilling an expectation by County Judge Loyd Neal to reach a deal by the end of October.
After tabling the deal twice in October, the commissioners unanimously approved executing the purchase agreement with Dolphin Ventures I L.L.C. on the afternoon of Oct. 31, leaving the judge about 11 hours to spare to meet his previously stated expectation.
The commissioners agreed to sale 45.135 acres of the Richard M. Borchard Regional Fairgrounds along U.S. Business 77 North to the San Antonio-based developers for $2,279,317.50, or at $50,500 per acre.
Neal himself took the unusual step and made the motion for the commissioners to execute the purchase agreement.
"We made this work," he announced. "It will be a fine deal for everybody."
The landmark sale paves the way for an influx of up to 1,000 full- and part-time jobs in Robstown, not to mention a windfall of potential tax proceeds for the city of Robstown, the Robstown Independent School District particularly, and other taxing agencies.
The RISD stands to reap the most in property tax revenues, followed by the city of Robstown. County property taxes are about a third the rate of the city of Robstown's property taxes.
The outlet mall's developers have estimated the project of 65 to 80 stores would cost $50 million to $65 million to construct, substantially adding to the appraised values of Robstown and the RISD.
As of July, the RISD's total assessed value was $290,476,935 and the city's was $216,145,387.
Nueces County assistant chief appraiser Jay Reynolds said the outlet mall would increase the appraised values 25 to 30 percent, boosting local property tax revenues also by 25 to 30 percent.
A $65 million development would yield about $2 million in additional property tax revenues for both the city and school district, Reynolds said.
"It would definitely be a boost to the Robstown school district and the city of Robstown," he said. "If it keeps growing, that would be great for Robstown, they definitely need it."
The RISD currently receives about $3 million a year in local property tax revenues. It is currently one of the 25 property-poorest school districts out of the 1,040 school districts in Texas, making it eligible for more state and federal funding.
"We would still be property-poor, but it would probably increase our wealth level, but I welcome the increased revenues of course," said Superintendent Roberto Garcia. "It will put us in a category where we will not be a mid-wealth district, but we won't be poor either."
Garcia any new funding would be used for instruction, facilities, payroll or other identified needs.
"When we receive it, we'll identify our needs and kind of disburse it into the areas where it is needed," he said.
The extra millions of dollars in property tax revenues come at a price, oddly enough, since the new revenues could transform the school's economic status for state funding purposes.
"The more local funding you generate, the less state funds you get," Garcia said.
One important state program the new revenues could jeopardize is the state's Instructional Facilities Allotment. The program designed for poorer school districts provided 85 percent of the funding to build a new Seale Junior High School.
The district is counting on another round of IFA funding to provide 78 percent of the funding to build new schools to replace Lotspeich and San Pedro elementary schools in the near future.
"For sure it would decrease our ability to receive the percent of IFA funds that we are currently receiving where we won't have enough to do what we need to do, yet we will not quality for IFA funds at the level we are currently receiving, or at all," Garcia said. "It will diminish our chances of receiving IFA funds in the future. So, if we're going to do anything, we've got to do it now."
The new development will also have a large financial impact on the city of Robstown.
In addition to the new property tax revenues and new jobs, the mammoth venture of 65 to 80 stores is projected to generate $122.5 million in gross sales in its first year.
The city of Robstown, the Robstown Improvement Development Corporation and Nueces County have a prior agreement to share local sales taxes from the fairgrounds.
But once the land is sold, the county will no longer be a part of the enterprise and will not receive a portion of sales taxes from the outlet mall, county leaders said.
Robstown Mayor Rodrigo Ramon Jr. said the influx of new jobs and related development would transform Robstown.
"I think it will be a huge impact," Ramon said. "Instead of people driving to Corpus, they'll be driving a few miles and work here. It will save money on gas and give people a chance to work here locally."
Ramon said he expected the mall to spur growth in housing and other developments, growing the city's north and southwest sides.
"It will be a definite impact to the whole region," Ramon said. "I think it will give Robstown room to expand in housing and schools and in infrastructure. I think it will be a big boost for the area."
The next step, county leaders said, is for Robstown officials to negotiate any tax or infrastructure improvements with Dolphin Ventures. Neal said the developers had not yet requested from the county any type of property tax abatements or other tax reductions.
"I'm sure at some point we're going to be meeting with the county and the developers," Ramon said. "Right now, it's too early to talk about. The only thing officially we can really say is we're in support of the project, like before. I thank the county judge and county commissioners for their diligent efforts in negotiating and signing this agreement."
One obstacle in the deal involved a prior agreement the county had made to donate 4 1/2 acres of fairgrounds property to the Education Service Center-Region 2 for a children's museum.
Dolphin Ventures also wanted the land.
Neal said the county would instead give the ESC other prime fairgrounds property along Terry Shamsie Boulevard, near the fairgrounds banquet halls.
The agreement calls for the county to conduct a public sale of the additional land that had been designated for the children's museum during a 120-day initial feasibility study.
Dolphin Ventures may terminate the contract if it is not the successful buyer of the land. Neal said it was very unlikely any other entity would pay as much as Dolphin Ventures would for the land.
Questions regarding the tax-free status of the certificates of obligation used to obtain the fairgrounds property were also resolved.
The county must obtain an opinion from tax attorneys within 30 days after the effective date that the sale won't adversely affect the tax status of the certificates of obligation used to initially purchase the fairgrounds property, or the contract terminates and Dolphin Ventures has its security and deposit funds returned.
Developers said construction could begin as early as next spring, if the project progresses smoothly.
Several name-brand stores have been contacted and have shown an interest in locating outlet stores in western Nueces County, including Brooks Bros., The GAP, Nike, Polo, Vanity Fair and many more, said Peter Edelmann and Lisa Quier-Wagner, two of Dolphin Venture I's three partners.
A hotel or motel and numerous restaurants are also part of the proposal, although a cinema is not in the offing because of the proximity of 5-Star Cinema in Calallen, said Edelmann, owner of EuroWest Properties of Essex, Vt., which includes an outlet shopping center and inn in Essex.
The partnership is also considering a second phase beyond the 65 to 80 retail stores planned.
Edelmann said the project would cost about $50 million for 300,000 square feet. A 300,000-square-foot outlet mall would mean 50 to 60 outlet tenants, said Rick Carduner, the third partner with Dolphin Ventures I.
The partners said they are finalizing floor plans and the proposed project could be enlarged from 300,000 to 350,000 square feet in its initial phase. A 350,000-square-foot outlet center would cost closer to $65 million to construct, Edelmann said.
Carduner, owner of Carduner Commercial LLC in San Antonio, said the local market is ripe for an outlet mall with the closet other outlet centers being in Mercedes and San Marcos.
The partners said the fairgrounds site has a lot of advantages, including its proximity to a major airport, the intersection of highways 44 and 77, downtown Corpus Christi, and other attractions at the fairgrounds.
Edelmann, of Colchester, Vt., said construction could start in the spring of 2008, with eight to nine months of construction.
Once construction is completed, it would likely take 90 days to outfit the stores for their tenants, he said, enabling the outlet mall to be called The Outlets to open before its initial projected opening date in August 2009.