Despite sales tax revenue loss, Grapevine remains optimistic

In the 2016-17 fiscal year, the city of Grapevine reported a sales tax revenue decrease of more than $832,000 from the previous fiscal year. City staff is budgeting conservatively for the 2017-18 fiscal year, slating Grapevine to generate only $27.3 million—a half million dollar decrease over FY 2016-17's budgeted amount of $27.8 million.

The reduced sales tax revenue is something Grapevine Chief Financial Officer Greg Jordan attributed to changing purchasing habits.

“Consumers have a lot more choices today, and that’s not only because of new retail centers in the surrounding areas, but it’s also because of greater online accessibility to goods and services,” Jordan said.

In spite of the dip in revenue, Jordan said he expects Grapevine to come back in sales tax revenue stronger than ever. He said Grapevine has launched several major projects that will bring in more people and more businesses as they become built.

“FY19 is going to be very exciting,” he said. “… Rising tides raise all ships­—that’s what we’re doing with our economic development.”

Bob Farley, Grapevine economic development director, said these developments will only add to Grapevine’s reputation for being a destination for tourists, who are already a key part of Grapevine’s economy. Leigh Lyons, Grapevine Convention & Visitors Bureau director of communications, said visitors annually contribute $2.3 billion in gross sales to Grapevine’s economy, and 84 percent of the sales tax revenue collected in Grapevine is paid by visitors to the city.

“Tourism is a major economic driver for the city of Grapevine and our local businesses, both large and small,” she said. “Convention and meeting attendees as well as leisure travelers shop in our stores, dine in our restaurants, experience our festivals and events, and stay in our hotels.”

Sales tax revenue in Grapevine

Grapevine’s sales tax history shows that the city peaked in FY 2015-16, when it brought in nearly $28 million in revenue. As 2017-18 fiscal year projections show the city is expected to generate only $27.3 million—a decrease of more than $686,000 from its FY 2015-16 numbers—Jordan said he budgeted for this year conservatively.

“We saw declining revenues in sales tax, and sales tax being a volatile revenue source, we had to respond to that,” he said at an August City Council meeting. “One of the difficult things when we consider sales tax is there’s always a bottoming out and there’s always a topping off, so the question is, exactly where are we in that cycle?”

He said the city of Grapevine experiences four spikes in sales tax revenue each year: one at Christmas; one in March because of spring break activities and families on vacation; and the last two during September and October because families shop for their children as they go back to school.

“We have a very, very predictable sales tax trend,” Jordan said. “The predictability of this trend allows us to have a very accurate forecast as we move into the next fiscal year.”

The sales tax revenue of the city goes to several important city funds, he said, such as the Crime Control Prevention District, which uses a board of residents to oversee that a portion of the sales tax collected goes to efficient facilities, technology, equipment and special initiatives for the city’s police officers, and it also funds the city’s library and
street maintenance.

Jordan said that he and his staff correctly predicted Grapevine would see a revenue loss last fiscal year due to several factors. He said shoppers are typically more cautious of spending after an election year, in addition to the effects of online shopping.

Jessica Cruz, owner of Texas General Store in Grapevine, said she has also seen the internet directly affect her store. She said shoppers have come in the shop and have said they could probably find her same products online for cheaper.

She pointed out that once shipping costs are added the total cost of an item is usually more expensive than simply picking up the item in a local store. Cruz said shopping local helps keep the city functional.

“[Choosing to shop online] is impacting the people that live here,” she said. “... And maybe not for any cheaper.”

Potential new sources of revenue

Aside from this decline, Jordan said FY 2016-17 laid the groundwork for investment and growth.

Last year Grapevine landed several major development deals, including Salt Lick Barbecue, Jefferson Silver Lake apartments and Stand Rock Hospitality. Dirt will begin turning on these projects this year.

“Grapevine has really great days in front of it,” Jordan said. “This is the busiest I’ve ever been in 20 years of [working in city budgets].”

He said these projects could start generating revenue for the city of Grapevine as soon as 2019, when they are finished with construction and begin to open for business.

In addition, early 2018 reports from the State Comptroller’s Office also show Grapevine is up 17 percent in revenue compared with this time last year. Jordan said this adds to his confidence that sales tax will continue to remain a stable source of revenue.

“We had a dip, and that happens,” Jordan said. “But I think ’19 is going to be a great year. I think the current year is going to be a great year.”

Looking to the future

With the groundwork for the city’s increased sales tax revenue laid, residents and business owners expect a surge of tourists to come to the city, which they said could develop even more sales tax revenue opportunities as more shoppers are introduced to Grapevine.

Cass Clements, director of operations at Grapevine Craft Brewery, said TEXRail could be a major contributor to Grapevine’s sales tax revenue as more people from around the Dallas-Fort Worth area will be able to ride the train to Grapevine.

She said Main Street’s TEXRail station is a project many local stores in that area are looking forward to.

“If someone comes in on the train from Dallas and they say, ‘Oh we went to Grapevine and we had a great time,’ they’re going to go tell their friends, too,” she said. “And even if they don’t stop then they can go, ‘We need to go see that town. It looks really cool, and we can get there on
the train.’”

Trudy Cresswell, director of mall operations at Grapevine Mills, said the shopping center is eagerly anticipating the train operations.

“We’re very excited to welcome TEXRail to the city of Grapevine,” she said. “We think it’s a novel and fun mode of transportation that’s going to get people to the city of Grapevine and out to Grapevine Mills from all points within
the Metroplex.”

Jordan said the economy in Grapevine is strong, and that both the shops on Main Street and the Grapevine Mills mall continue to be solid economic drivers for the city.

“I think that [FY] 2018 is going to be a better year than [FY] 2017,” he said. “That’s one of those things we will continue to monitor and as we go through the fiscal year. All of those data points will help us forecast into FY19.”
By Miranda Jaimes

Editor, Frisco & McKinney

Miranda joined Community Impact Newspaper as an editor in August 2017 with the Grapevine/Colleyville/Southlake edition. In 2019 she transitioned to editor for the McKinney edition. She began covering Frisco as well in 2020. Miranda covers local government, transportation, business and nonprofits in these communities. Prior to CI, Miranda served as managing editor for The Prosper Press, The Anna-Melissa Tribune and The Van Alstyne Leader, and before that reported and did design for The Herald Democrat, a daily newspaper in Grayson County. She graduated with a degree in journalism from Oklahoma Christian University in 2014.


GCISD administration building
Grapevine-Colleyville ISD to condense funds from 2011, 2016 bonds

The board of trustees will consider short-term capital projects that may be paid for with undesignated bond funds in August.

Racks of shoes and other running gear
Dallas Running Co. now open in Southlake

The store offers personalized shoe fittings and sells over 20 brands of running shoes.

Mad for Chicken opened July 23 at 216 W. Virginia St., Ste. 102, in downtown McKinney. (Courtesy Mad for Chicken)
Mad for chicken now serving McKinney; La Casita Tacos y Pupusas coming to Richardson and more DFW-area news

Mad for Chicken, a Korean-inspired restaurant, serves soy-garlic fried chicken alongside pork belly strips, salads, kimchi fries, quesadillas and more.

A woman wearing rings holds a coffee cup on a marble counter
Jane launches coffee bar in Southlake, full menu expected soon

The restaurant is planning for a grand opening in August. The restaurant will also feature a rotating selection of charcuterie boards, small bites and more in an upscale atmosphere.

vaccine being given
As Tarrant County's COVID-19 hospitalizations rise, health officials continue to encourage vaccinations

As of July 23, Tarrant County health officials report 338 hospitalizations attributed to COVID-19.

The city of McKinney established school zones for Emerson High School in a July 20 City Council meeting. (Courtesy Adobe Stock)
School zone established for Emerson High in Frisco ISD; 61% of residents in 3 Plano ZIP codes fully vaccinated, and more top news from DFW

Read the most popular business and community news from the past week from the Dallas-Fort Worth area.

Keep Colleyville Beautiful will host a cleanup event to clear waste from Little Bear Creek on Saturday, July 24. (Courtesy Keep Colleyville Beautiful, Randy Bright and Rusty Young)
5 things to do this weekend in Grapevine, Colleyville and Southlake

Check out these local events this weekend—including an opportunity to enjoy the outdoors and give back to the community in Colleyville.

Peter Lake (left), chair of the Public Utility Commission of Texas, and Brad Jones, interim president and CEO of the Electric Reliability Council of Texas, provided an update on state regulators' electric grid redesign efforts in Austin on July 22. (Ben Thompson/Community Impact Newspaper)
Regulators: Texas electric grid prepared for potentially record-breaking demand next week; 'once-in-a-generation reforms' underway

The heads of the agencies in charge of the Texas electric grid met in Austin on July 22 to provide updates on their grid reform efforts.

Carroll ISD school board room
Carroll ISD trustee David Almand stepping down from school board

Almand has served on the board for four years. The rest of the board will meet in August to discuss next steps.

Along with the Grapevine Planning and Zoning Commission, City Council approved a handful of projects July 20. (Steven Ryzewski/Community Impact Newspaper)
Grapevine Council gives approval to plans for Rock & Brews, Velvet Taco restaurants

The two restaurants will be located at the same planned commercial center, located at 440 West State Highway 114, at the site that once housed the Payton-Wright Ford automotive dealership.

Colleyville City Hall
Colleyville approves $8 million contract for Colleyville Boulevard Gateways Project

The three gateways will be the third phase of the city’s beautification of Colleyville Boulevard.

the check-in area for a The NOW Massage location
The Now Massage boutique coming to Southlake this fall

The therapeutic massage boutique opening in Southlake this fall will provide services with options focused on relaxation, energy-balance to promote stress reduction and recovery.