City banks on H-E-B agreement

For the Record

The City of Pinehurst’s deal to bring an H-E-B grocery store to the vacant MacArthur Shopping Center will refund $1.056 million in sales taxes over what is expected to be a seven-year period.

That’s one of the details of the city’s big Nov. 8 announcement revealed in a copy of the Economic Development Agreement (EDA) furnished by the city in answer to a Texas Open Records request.

The city’s investment, though, is expected to be paid back many times over because of other new businesses expected to locate near H-E-B.

“They’re asking nothing on property taxes and I guess their building will be valued at $10 million plus equipment,” said Harry Vine, the city code enforcement officer who said he spent a couple of years negotiating the deal.

“And it (the H-E-B store) will attract other business that will pay taxes and permit fees.”

Under the terms of the EDA, H-E-B, a San Antonio-based supermarket chain that operates more than 350 stores in Texas and Mexico, has until Dec. 31, 2021 to open the store, which, according to the EDA, must be of no less than 60,000 square feet.

That is roughly the same size as the new H-E-B store at the intersection of College and 11th Streets in Beaumont.

Vine has said the new store would require two to three years to build and employ 250 to 300 people.

But the project is still awaiting closing on the 7.727-acre property at 2600 MacArthur Drive, where the Sears store once did business.

A company named MacArthur Shopping Center Venture, Inc., owns the property. It’s connected to Beaumont’s Phelan Investments.

Vine says someday soon bulldozers will appear to flatten the existing buildings. The nearby “satellite” stores will be built to order for their tenants which the city will help attract with its reinvestment zone.

In the same Nov. 8 meeting that Pinehurst city council voted to approve the deal with H-E-B, the city agreed to create a reinvestment zone that covers the area bounded by 28th Street, MacArthur Drive and Adams Bayou, which includes some unimproved land on the north of the old shopping center.

The reinvestment zone would grant property tax incentives to new businesses.

“The only thing you couldn’t develop is something in the floodway, which is the bayou itself,” Vine said. “You may have to bring fill in to some of the property.

“But this is one of the biggest undeveloped areas in the city. I think it would be attractive and beautiful. I’m hoping they’ll do commercial development and homes, too.

“We’ll just have to wait and see.”

Terms of the city’s EDA call for Pinehurst to refund 80 percent of H-E-B’s sales tax each year until the total hits the $1.056 million figure or 15 years, whichever comes first.

Once that $1.056 rebate is reached the city would keep the 1.5 cent sales tax.

Vine points out that H-E-B has agreed to spend money up front on infrastructure that will reduce the city’s long-term cost for the EDA to about $800,000.

According to the agreement, H-E-B will pay for a traffic light, sidewalks and some water improvements, some other things.