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Council offers new incentives for grocery store development

Sunday, May 12, 2024

Any local can tell you that grocery shopping seems to take longer than it used to. As has been reported in regional media outlets, residents say that there are just not enough grocery stores for the rapidly growing population in San Marcos. It seems the San Marcos City Council agrees. At the regularly scheduled meeting Tuesday, the council created an incentive package for grocery stores to entice that type of development.

San Marcos Economic and Business Development Manager Christian Smith said staff recommended grocery store incentives that included a property and sales tax abatement of 100% for the first year, 80% for the second year, 60% for the third year, 50% for the fourth year and 25% for the fifth year. Staff recommended a minimum of 20,000 square feet, a requirement to break ground while the resolution is still active and no limit to the number of eligible stores. Smith said that the incentive agreement would not stop the council from negotiating for additional incentives.

The agreed upon incentive package that was approved unanimously by council was as follows: five years of incentives, no cash grant upfront, property and sales tax abatement of 80% for the first year with staff direction to taper that down year to year and council would prefer, but didn’t require, enhanced architectural design.

San Marcos City Council Member Mark Gleason agreed that there should be no limit to the number of eligible stores that could utilize this incentive package until “we feel like we’ve got enough grocery stores.”

San Marcos Mayor Jane Hughson said she isn’t comfortable doing a 100% abatement of property taxes.

“I would rather do the sales tax than the property tax,” Hughson said.

Gleason said although he was adamantly opposed to a 100% abatement, he would be willing to do it in this case. Neighboring communities offered a cash grant incentive, so he preferred the abatement to giving them money outright.

San Marcos City Council Member Matthew Mendoza, Saul Gonzales and Shane Scott said they were against the cash grant and the 100% property tax abatement. San Marcos City Council Member Alyssa Garza said, if the grocery store was on the east side of town, she would agree to both a 100% property tax abatement and a cash grant. San Marcos City Council Member Jude Prather said yes to both the 100% property tax abatement and the cash grant. The council agreed to an 80% property tax and sales tax abatement for the first year.

Garza said her main concern was an increase in jobs.

“Food insecurity doesn’t equal just a mere lack of access to food,” Garza said. “Folks need jobs to afford stuff. When it comes to size [of the store] — I don't know. My priority is the east side [of town, and] something that’s going to bring jobs.”

No incentive was created for location.

Gleason, Prather and Garza, said they were fine with 100% sales tax abatement for the first year. Scott, Hughson, Gonzales and Mendoza wanted 80% sales tax abatement for the first year.

In other news, the council received a staff presentation and voted unanimously to approve the annexing of approximately 54 acres of land generally located at the corner of West Centerpoint Road and Central Park loop into the city for La Cima Phase 6.

Prather said La Cima is a great community partner for San Marcos.

“Thank you for your investment in our community,” he said.

The council unanimously approved the rezoning of that same land to Character District-4, which San Marcos Planning and Development Services Director Amanda Hernandez said would allow the proposed single family uses and is compatible with surrounding zoning districts.

“The property is in the Edwards Aquifer recharge zone, however, the development agreement includes standards that mitigate the impacts to natural features,” Hernandez said.

The council approved an agreement to sell water to the city of Kyle on a temporary basis, but the council approved this with the rest of the consent items. It was not pulled for discussion. According to city documents, the agreement to sell water to the city of Kyle was done for the past two years and will occur until the year after the Alliance Regional Water Authority Phase 1 is fully completed. The city of Kyle anticipates the need for this agreement until 2026. San Marcos currently has supply of Edwards Aquifer water above what is needed and has agreed to supply Kyle with 500 acre-feet of water. Depending on the amount of time the agreement continues, the city of San Marcos will receive a minimum of $732,624 of revenue and a maximum of $1,481,536. City documents further state that there is no impact to the aquifer because of this transaction. The city of Kyle will draw the same amount of water from the Aquifer with or without this assignment of water through this agreement.

San Marcos Record

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