H-E-B opened Nov. 2 at FM 1488 and Spur 149, ending an eight-year journey to bring the grocer—along with hundreds of jobs and new sales tax revenue—to the city.

The store anchors the 142-acre Magnolia Place development, which is set to include several restaurants, such as Marco’s Pizza and Sakura Bistro, and businesses, such as Texas Hair Team, said Chessie Zimmerman, a representative with developer Stratus Properties, in an email.

“It’s really nice to see it open,” Magnolia Mayor Todd Kana said in an interview. “We’re happy to have them in the community. I believe they’ll be good for the community, and hopefully we can form a partnership that carries on for years.”

Stratus began to work on the larger Magnolia Place development in 2014.

“This site appealed to us because of its size, its proximity to Magnolia High School and its position on a highly traveled route,” Zimmerman said.

Road to H-E-B

Magnolia annexed the 163-acre tract in June 2014, according to previous Community Impact reporting.

Once the land was within city limits, the city applied for $5 million in bonds in 2014 to extend water and sewer lines, Community Impact previously reported.

In 2015, H-E-B purchased 18 acres from Stratus Properties.

“Even if H-E-B was not the one that ended up being there, we knew that area would develop, so while it was a little uneasy, it wasn’t a complete gamble,” Kana said about the city’s infrastructure development.

Construction on H-E-B—originally scheduled to begin after the Texas Department of Transportation finished roadway construction in the area—did not begin until 2021 due to pandemic delays, Zimmerman said.

“It [was] just a perfect storm that delayed it so long,” Kana said.

In early November, the long-awaited store opened with dozens of residents lining up to be among the first in the store. Magnolia resident Angel Guebara, who said the new H-E-B is three minutes from his house, was the first customer.

“All the traffic from new Magnolia—it gets to be a lot, and I go to H-E-B maybe four [to] five times a week,” Guebara said. “So this is going to be nice and convenient for us.”

Magnolia resident Cathy Meyer, who lives 7 miles from the H-E-B, said all the development coming to the area is changing the feel of the city.

“The reason I moved out here was because of the country feel and everything, and it’s not feeling that way anymore,” Meyer said. “That’s kind of sad. But it is more convenient.”

In an interview the morning of the opening, General Manager John Beardsley said H-E-B expected to see thousands of customers on opening day.

As such, Beardsley said H-E-B hired about 434 people and is still hiring.

“My plan is to have, by the new year, about 450 partners [employees],” Beardsley said. “I could see definitely over the next few years hiring another 100 or 200 partners on top of what we initially have. The demand for jobs out here was quite high—over 5,000 applicants.”

Magnolia Economic Development Director Rachel Steele said she believes the community will benefit by having H-E-B open.

“People will have to travel less to find what they need, whether it’s produce, pasta sauce, snacks or prepared foods,” Steele said in an email.

Looking beyond H-E-B

Beyond creating jobs, H-E-B and the broader Magnolia Place development will be a source of sales tax revenue for the city and Montgomery County Emergency Services District No. 10, officials said.

For every dollar spent, the city and ESD 10 each get one cent following a 2014 vote to increase the sales tax within unincorporated ESD 10 by 1%.

“[ESD 10] instituted that sales tax in that area while we were in the process of the annexation,” Kana said. “In layman’s terms, there’s two cents floating around out there in nonincorporated areas of Texas. ... While it’s a big hit for us considering we’re the ones that have invested in that area, the ESD will be getting one cent of that available two cents.”

ESD 10 board President Larry Smith said ESD 10 projects $30 million in sales tax revenue over the next 10 years from the FM 1488 and Spur 149 area. He said sales tax contributes about 45% of the ESD’s revenue.

“The penny that we get from sales tax gives us so much more revenue to keep up with the growth,” Smith said. “I don’t think we could make it without that sales tax. We wouldn’t be able to keep up with the growth.”

Meanwhile, Kana said he did not have any specific projections for how much sales tax revenue will be generated for the city. Steele and Smith also said the impact to the property tax rolls was unclear.

“I believe it’ll be a good return on the city’s investment though,” Kana said.

Further, additional tenants are planned for Magnolia Place, such as Chase Bank and Christian Brothers Automotive, Zimmerman said.

Phase 2 will also include 15,000 square feet of retail, a park, a 27-acre subdivision and another 36 acres of land available, she said.

“Our focus is bringing a variety of neighborhood services and housing opportunities to the Magnolia community,” Zimmerman said. “This development will meet those needs for people who commute through on a daily basis as well as for people who will choose to make Magnolia Place their home.”