“It wasn’t what you think you’ll find when you have a high median income and a great school district,” he said.
Tannos now has five commercial buildings in Friendswood at 100% occupancy, but he is not the only developer who has come to Friendswood hoping to build more. Three more franchises opened in the city in 2020, helping contribute to the high sales tax revenue the city saw all through the last fiscal year—despite the pandemic.
While the city naturally attracts residents, Friendswood strives to bring in business to ease some of the burden on the taxpayers. The city created a goal to have 80% of its revenue come from residents’ homes with 20% coming from business.
Both big corporations and small businesses are getting started in Friendswood, but the growth is not all on the commercial side. The city continues to attract more homebuilders and residents as well.
“They are looking for a safe city, good schools, attractive parks. We still have that small-town feel and strive to maintain that,” Mayor Mike Foreman said. “If they are coming to this area and looking for a new home, then Friendswood just jumps out at you.”
Downtown begins to develop
Friendswood’s small-town feeling, great school district and high median income are as attractive to perspective businesses as they are to residents, Tannos said. However, while many CEOs live in Friendswood, it was hard for them to move their business to the city due to the lack of office space, he said.
“I don’t think a lot of people realize how many CEOs live in Friendswood but office elsewhere. Why wouldn’t you want it here?” he said.
Both branch managers of NRL Mortgage live in Friendswood and were happy to move their Pearland branch of the business to Friendswood once Tannos built his strip center at 804 S. Friendswood Drive, branch manager Chris Basso said. The business moved to Friendswood in early 2018.
“We have a storefront; we have our name out there [in front of the business],” Basso said. “I count that as a positive.”
“Live here, work here” is the city’s motto for the downtown area. Having a nice city for people to both live and work has helped the city thrive and has grown the downtown area in particular, Foreman said.
“It’s a testament to the economic development and what they are doing downtown. We always knew we had a lot of business owners in Friendswood,” Foreman said. “We see commercial growth coming in every day.”
Tannos owns several strip centers in the city, which host larger corporate businesses as well as locally owned businesses such as Jado’z Grill House and Between Us Tea Room. He has also almost completed work on a four-story building in the heart of downtown. The building—which faced resident opposition when it was first presented to council—has Houston Methodist as an anchor and houses businesses both large and small, including locally owned and -operated Dentistry 4 Children.
“The problem is you can’t have it both ways,” he said. “You can’t say this place is great, with great schools and a great economy, and tell people they can’t move here.”
Tannos is also in the final planning stages for the Albritton, a mixed-use residential and commercial building that will sit on a plot of land behind the Friendswood Public Library.
Residents choose Friendswood
Friendswood continues to see more homes built in the city. In 2019, the city issued 87 permits for new residential builds. In 2020, it issued 133. The City Council also approved the Avalon development for build in late 2019.
“I think homebuilding is going pretty fast and furious,” Foreman said.
As developments such as Avalon come into the city, developments such as West Ranch are beginning to wrap up. West Ranch was developed by the Friendswood Development Co., created in the 1990s.
The Friendswood Development Co. started building in West Ranch in 2007 and reached build-out in late 2020. The development sits on 718 acres with 1,235 homes occupied, accounting for roughly 10% of the city’s population.
Most successful residential and commercial developers have been in Friendswood for decades, Assistant City Manager Steven Rhea said.
“Some of the developers are locals. They are residents of Friendswood,” Rhea said. “They have been here a number of years, and they understand what it is they would like to see.”
One of West Ranch’s most popular features is its parks and trails, as well as Lake Friendswood. The quality of parks is one of the city’s attractions, Foreman said.
“It’s an outdoor, active population, and that is exactly what we were able to create,” said Michael Johnson, the vice president of land development at Friendswood Development Co.
Friendswood’s land is 14% undeveloped, with 61% of the remaining land allocated to residential development. As more people move to the city, that will attract more businesses to the area as well, Foreman said.
“The commercial sector will grow along with the residential,” Foreman said. “We will continue to see people moving here.”
Balancing residential and commercial
So far, roughly 85% of the city’s property taxes come from residents, and 15% comes from businesses, Rhea said.
“We are constantly looking at a way to bring in new businesses, whether that be jobs created or taxable value,” Rhea said. “Our elected officials, mayor, council, boards and commissions try to look at what is best for Friendswood.”
The city’s ability to recruit different larger businesses, from Houston Methodist to Chick-fil-A, has helped bolster the city through the pandemic, when development has been slowing down nationwide.
“Even with the overall inability to know what comes next, our sales tax figures were above what is projected,” Rhea said. “When people are looking to relocate their business, that is something they look at.”
When developers bring in those larger and more well-known businesses to the city, they can cause competition for some of the smaller businesses.
However, sometimes the larger business helps ease the financial burden of signing a mom and pop business, Tannos said. Having Houston Methodist anchor his four-story building helped Tannos sign more businesses, including some smaller ones that have been in the community for years, he said.
“It’s gone even better than we had hoped,” he said.
NRL Mortgage had a three-year lease in Tannos’ strip center, which it just re-signed in January. Basso said he loves to see the growth in the downtown area, even though he believes the city has retained its small-town feeling.
”Friendswood in and of itself is a tight-knit community,” he said.
Having small businesses helps the city maintain the small-town feel, as does having developers such as Tannos and Friendswood Development Co., Rhea said.
“They have tapped into what the city wants and like the city; they are here to listen,” he said. “It is in everyone’s best interest to put something in the ground or fill in a retail space with something that people want to visit.”