Construction values for commercial and residential projects have soared in the city of Grapevine for the past two years.
Coming in at more than $261 million in added construction values at the end of fiscal year 2016-17, Grapevine beat its record-setting values from fiscal year 2016 by about $65 million.
Grapevine’s Director of Development Services Scott Williams said construction values are the amount of money spent on commercial and residential projects in a city. Those projects can range from something as small as installing an air conditioning unit to a project as large as constructing a new building, and include residential and commercial projects.
Grapevine Business Retention Manager Garin Giacomarro said construction values are crucial when examining the growth of a city—growth that includes Kubota and the renovations at Grapevine Mills Mall. Giacomarro said that within the past 36 months, about $910 million has been invested in the city.
“I don’t think people understand how well the last several years have gone,” Giacomarro said. “They’ve gone very, very well. [Residents] might not care about Kubota in particular, but it all comes back to the city’s well-being. Every sales tax dollar we get helps keep our property tax low, and it increases our marketability, and better businesses come because better businesses are coming. It’s kind of a self-feeding loop.”
The benefit of construction
Grapevine’s Economic Development Manager Dan Truex said construction values and certificate of occupancy permits often work cohesively. A city must issue a CO permit to a business so it can be opened to the public.
Williams said that projects happening in Grapevine are an indication of a strong economy and could pay off for not only the city but also the residents.
He said as more businesses set up shop in Grapevine, the city’s tax base, daytime occupants and business and shopping for residents will increase, and said it is possible for Grapevine to break its construction value record again in fiscal year 2018.
“We hope so,” he said. “We’ll see a lot of transportation construction with the TEXRail and the hotel going in on Main Street.”
Although construction values continue to pick up, indicating more businesses in the area, that has not translated to increased sales tax in the city of Grapevine.
Chief Financial Officer Greg Jordan said he thinks that while people are continuing to shop, the way they are shopping is changing.
“Remember when the [Amazon] Kindle came out and everyone said it was going to end all bookstores?” he said. “Well now we’re seeing bookstores open back up, and people are going back to print. There’s this rise and dip, now we’re kind of [flattening out]. … Based on projections we’re assuming sales tax will remain flat in ’18, and we’re starting to see that flat line actually occur.”
Grapevine’s growth is shared by the city of Southlake. In fiscal year 2016-17, Southlake reported a year-over-year increase of almost $60 million in the city’s added construction value.
Southlake’s Director of Economic Development and Tourism Alison Ortowski said her department looks at CO permits in the city to gauge the health of its businesses.
“We look for unusual volume changes, whether that be large increases or periods of low activity,” she said. “Either can be a positive sign or a sign of something to be concerned about. The key is to monitor these numbers and use them as a basis for asking questions to understand the cause of the change.”
She said Southlake has a wide variety of business types. The city has issued about 600 commercial COs in the past three fiscal years.
“Residents and visitors get the benefit of having a variety of new businesses to visit, and when sales tax is generated, those dollars then provide funding for roads, parks and city facilities … offsetting the costs for our residential taxpayers,” Ortowski said.
Southlake chooses its businesses strategically, Ortowski said.
She said the city is developing its office market, as indicated by the completion of Granite Place at Southlake Town Square, and said shopping and dining businesses should follow these developments.
Colleyville saw its construction values decrease year over year by $17 million in 2016-17.
Mark Wood, economic development manager for the city of Colleyville, said this is not so much attributed to a decrease in fiscal year 2017 as it is attributed to a spike in more expensive developments in the city in fiscal year 2016, including the Whole Foods Center and several building expansions.
Wood said Colleyville has a lot of opportunity for new development as well as redevelopment.
“We’re trying to encourage restaurants to come to the city of Colleyville to help increase their sales tax revenue—it’s the second biggest revenue source for the general fund, and if we can grow that, then we can help reduce the burden of residential property tax,” he said.
Wood said Colleyville has several development sites at its northern and southern gateways along SH 26 (Colleyville Boulevard). Wood said Colleyville is looking for something that is not available in a neighboring city and will attract people to come shop and eat in Colleyville for those spaces.