Sales tax collected from retail and commercial businesses makes up 27 percent of the city’s general fund revenue, with property taxes from large businesses, like Dick’s Sporting Goods and Costco, also bringing in a sizable amount for the city.
In the midst of big commercial chains, however, smaller retail stores are not to be overlooked. Small businesses contribute to the city’s revenue, but many suffered as a result of the effects of Hurricane Harvey. Even those that did not suffer physical damage are still feeling the effects of the aftermath.
“I can see why so many businesses don’t survive a major catastrophe,” Rustique owner Tawnya Crawford said.
Promoting Commercial Growth
Pearland has continued to see steady retail and commercial growth over the past decade, said Matt Buchanan, executive manager for developmental services for the Pearland Economic Development Corporation.
Buchanan attributes the success of commercial businesses in the area to the population as well as the financial state of many of Pearland’s citizens.
“I think people are attracted to … our strong incomes and … our growing population, and I think many recognize the quality of our community,” Buchanan said.
One of Pearland’s newest major retailers is At Home, a national chain specializing in home decor. At Home will be coming to Pearland soon at Broadway Street and Kirby Drive. According to Buchanan, the permit value for At Home is around $9.7 million. The taxable value from a store like At Home will bring in a large amount of revenue for the city. According to Buchanan, Costco, which opened two years ago, generated $843,229.12 in property taxes in 2017.
One of the newest retailers to open in Pearland is Dick’s Sporting Goods, which took the place of Sports Authority when the business closed nationwide. Dick’s Sporting Goods is located at Pearland Town Center, one of Pearland’s largest retail hubs.
“There are so many reason why I believe businesses choose the Pearland Town Center,” Nicole Bowen, marketing director at Pearland Town Center, said. “Our strong customer base, premier location, competitive leasing rates, quality customer service and 40 [plus]community events truly show businesses that we can about them and the customers they come here to serve.”
According to Buchanan, areas that experience a lot of retail and commercial growth include Pearland Parkway, South Main Street, Broadway Street and areas off Hwy. 288, and where the Pearland Town Center is located.
“We continue to have space over our major corridors,” Buchanan said. “As history has showed for the past 15 years or so, we will continue to grow.”
Pearland Town Center, one of the largest concentrations of business in the area, is known as a large trade area, or an area where retail continues to grow and concentrate. According to Buchanan, Pearland Town Center is not only a large trade area for the city of Pearland, it is a large regional trade area—as are the Sugar Land Town Center and Baybrook Mall.
“The Pearland Town Center has been able to maintain a 95 [percent]or greater occupancy rate in the past year. This allows us to be more selective with our leasing decisions and guarantees that we bring quality businesses that meet the needs of our shoppers,” Teir Allender, senior general manager for the Pearland Town Center said.
According to Allender, Pearland Town Center’s location attracts customers.
“We value the ease of access to our location with visibility for our customers. I do believe our location along Hwy. 288 is one of the factors that we can attribute to our success,” Allender said.
In 2016, the city collected $29.7 million in sales tax. In the first three quarters of 2017, the city has collected $22.9 million in sales tax. Overall, sales tax makes up 27 percent of the city’s collected revenue, making it the largest contributor to the city’s budget.
Over the past four years, the city’s permitting activity has steadily increased. In 2016, the city issued 228 commercial permits for a total valuation of $191.2 million. In the first six months of 2017, the city issued 117 commercial permits for a total valuation of $126.1 million, which is more than half of what was issued in the previous year.
“Someone can come in tomorrow— and if the plat is already permitted— then someone can just put down a permit and be under construction in 15 days if everything is running smoothly,” Buchanan said. “Our permitting process is a pretty quick process.”
However, some small-business owners like Moises Nevarez experienced frustration with the permitting process.
“It took forever for us to open the first time,” Nevarez said.
Nevarez is the owner of Value Furniture, which opened in February 2016. The furniture store moved into the old Pearland Furniture location on Hwy. 35, which had been operating in the community for four decades, he said.
“It’s been challenging,” Nevarez said. “We haven’t seen the traffic we were expecting.”
Other business owners like Crawford did not find the permitting process to be challenging.
“The permitting process wasn’t too difficult in Pearland. We were establishing a new retail business,” Crawford said. “Our current location was previously leased out to a retail establishment, so there was no extensive build-out or construction required, which made the permitting process fairly smooth.”
Crawford said she enjoys her business’ location in east Pearland.
“We love being in Old Towne Pearland,” Crawford said. “It still has a small-town community feel where we can establish relationships with our customers. We have a 50 percent return rate, and because of the growth in Pearland, we have new customers discovering us every day.”
Small Pearland businesses, such as Value Furniture and Rustique, contribute to the revenue the city receives from sales tax in a big way.
“A large amount of our income from sales tax comes from our small businesses,” Pearland Mayor Tom Reid said.
According to Reid, the city’s success with business lies in the convenience of having shopping centers in the city.
“One of the reasons we have been able to develop so much retail and commercial business is our location,” Reid said. “[Residents} are going out to shop and they are not going to drive to Baybrook Mall or The Galleria if we have something over here.”
The mayor cited Pearland Parkway as an area with a sizable amount of growth.
“I think we are doing a good job, and we are going to do more as we continue growing,” Reid said.
Harvey’s effect varies
The effects of Hurricane Harvey have varied from business to business.
For Value Furniture, the storm was devastating.
“It was a complete loss. 100 percent,” Nevarez said. “It was a foot and a half of water, but it destroyed all of the furniture, computers, equipment, desks and everything else.”
At the moment, Nevarez is working to put furniture back into the store. The store did not open a temporary location after the storm as all supplies were lost during the storm, he said.
Value Furniture shut its doors for close to six weeks and counting. The store will open in mid-to-late October, as of press time, Nevarez said.
Conversely, Sheer Perfection Fabrics Upholstery and Furniture benefitted from an increase in sales after the storm, owner Paul Ta said.
“[Harvey] did not affect [the store]at all. It’s bringing me more business. We had no flood. We have been blessed,” Ta said. “It’s just sad a lot of people out there have lost their house … and I help them any way I can.”
Roughly 75-80 percent of Ta’s business right now is coming from flood victims. Typically, 90 percent of Ta’s customers are referrals, he said.
Ta believes his location on Hwy. 35 is one of the reasons for his business’ success. When asked how he liked doing business in Pearland, Ta replied that he “loved it.”
“I love Pearland. This is my home,” Ta said.
Although Rustique did not suffer any physical damage from the storm, sales were slow during the storm and in the aftermath, Crawford said.
“We were closed due to impassable roads for five days,” Crawford said. “Additionally, the severe decrease in sales in the following weeks have been quite devastating to a small business.”
While Crawford’s business was affected by the storm, she is confident the store and the city will be able to make up for lost time.
“It’s been a struggle as our community recovers,” Crawford said. “But just as Pearland has shown its great resilience and grit, so will Rustique— and we’ll stick together and flourish through these hard times.”
*Editor’s note: The story has been updated to reflect that sales tax collected from retail and commercial businesses makes up 27 percent of the city’s general fund revenue. Costco’s property tax value has also been changed to $843,229.12 in the story.