Magnolia Mayor Todd Kana said the grocery store is going to be an asset for the city. He said he believes the sales tax generated from the H-E-B—as well as the entire Magnolia Place development—will help the city as it provides infrastructure for future growth.
“The city has struggled over the years, and I think this is finally what puts us over the top,” Kana said.
Stratus Properties, the developer of Magnolia Place, chose Magnolia for its development because of the city’s residential growth and small-town feel, Development Manager Chessie Zimmerman said. Zimmerman said she believes the popularity of H-E-B will draw residents to Magnolia.
“There is no better grocer in the country than H-E-B,” Zimmerman said. “They are, perhaps, the most coveted tenant in the industry today.”
Two other developments, Magnolia Village and Heritage Green, are also coming to the intersection of FM 1488 and Spur 149. Both will bring a mix of residential, retail and commercial spaces to the east side of the city.
“It’s not the same Magnolia it’s been,” said Christie Fox, who has lived in Magnolia for 10 years. “The fact we’re growing means that we’re developing a healthier and stronger economy for our children.”
H-E-B coming
H-E-B will be the first major box store in Magnolia when it opens this summer, according to a timeline from the city. Currently, Magnolia residents wanting to shop at an H-E-B must drive 10 miles east to the one at FM 1488 and Tamina Road—which opened in 2016—or 11 miles south to the location in Tomball.
Rachel Steele, Magnolia Economic Development Corp. director, said she believes the grocery store will provide many benefits to the city, including bringing jobs, being a community partner and alleviating food insecurity.
“To have something like H-E-B, it really brings a lot of suburban-urban amenities to a rural environment,” Steele said.
The H-E-B will be 95,000 square feet and include a fuel station and car wash. The Magnolia Place development the grocery store is anchoring will include four retail buildings, five retail pad sites, 194 single-family lots and 500 multifamily units, according to Stratus Properties.
To accommodate increased traffic, Stratus Properties will construct right-turn lanes and additional access points on FM 1488 and Spur 149 and install a traffic signal at Spur 149 and Red Creek Circle—a new road circling the development, Zimmerman said. The H-E-B, two multitenant retail buildings and all road improvements are expected to be completed in 2022, Zimmerman said.
However, supply chain issues have affected the construction of the H-E-B, and the company cannot provide a timeline for opening until construction is further along, Lisa Helfman, senior director of H-E-B public affairs for Houston, said in a statement. H-E-B is constructing another location in Willis as well, Helfman said.
“We know our future shoppers in Willis and Magnolia are excited for these stores to open—as are we—and we thank them for their patience as we work to complete them,” Helfman said.
Magnolia resident Connie Ward said despite the city losing some of its “country” atmosphere with the development, she believes the area needs the new businesses that will come alongside H-E-B.
“I just like that fact that not only is it going to be an H-E-B, but there’s going to be new restaurants and things like that, which is something we don’t have here,” said Ward, who has lived off FM 1488 and Alford Road for eight years.
Funding growth
The sales tax revenue from Magnolia Place is expected to be beneficial to entities in the area as Magnolia continues to see residential growth. Kana said revenue generated from the development will help the city upgrade its infrastructure, including replacing and upgrading pipes and expanding wastewater treatment capacity.
Kana said having such a large development such as Magnolia Place will help the city keep property taxes low so residents will not be the only ones paying for infrastructure upgrades. The $1.8 million in revenue from sales taxes the city is projected to gain in fiscal year 2021-22 is about half of the city’s total revenue, the city’s budget shows.
“This allows us to improve and expand the city on the backs of everyone that spends a dollar in the city as opposed to just those who live here,” Kana said.
The Magnolia Fire Department, the name for the new entity created by Montgomery County Emergency Services District No. 10 and the former Magnolia Volunteer Fire Department, is also poised to see revenue gains from the new H-E-B, MFD board President Larry Smith said. Voters approved a proposition in 2014 to allow the MFD, then ESD 10, to receive $0.01 of sales tax for every dollar spent within areas annexed by Magnolia after Oct. 1, 2014, such as the Magnolia Place development, now within city limits.
"The fact that H-E-B found it in their best interest to build this big store across from Magnolia High School is just further indication and [positive] proof that the growth in that area is about to go nuts,” Smith said.
Smith said the additional funds will help the MFD expand its services as it continues to try to keep up with growth.
For example, Smith said the MFD will use new revenue to develop new stations, upgrade existing stations and hire more personnel. He said the MFD plans to repair and renovate Station Nos. 182 and 186, both located on FM 2978 on the east side of the Magnolia area, in 2022.
“I think [H-E-B is] a big benefit to the city of Magnolia,” Smith said. “We are going to be very transparent about the [funding] process.”
Developing the intersection
In addition to Magnolia Place, two more developments are underway at FM 1488 and Spur 149. Magnolia Village, a 60-acre mixed-use development on the southeast corner of the intersection, and Heritage Green, a 48-acre mixed-use property north of FM 1488 at Spur 149, are also under construction.
Magnolia Village will bring 300 multifamily units, retail and office space to the area, according to previous Community Impact Newspaper reporting. Heritage Green will include a CVS Pharmacy, which is expected to open this summer, and other retail and residential space, according to Unified Engineering Solutions, the project developer.
“I think by the end of 2022, we will be going [to FM 1488 and Spur 149] for lunches and dinners, and it will be a power intersection,” Steele said.
While more development will benefit the bottom line for the city and the MFD, Smith said it presents a challenge for the MFD to provide fire protection.
“The biggest challenge is being able to expand our facilities and our services fast enough to keep up with the growing development,” Smith said.
Fox said she believes it is a double-edged sword: While the three developments will provide the city much-needed revenue and jobs for the growing number of residents, there are still concerns, such as flooding.
“My main concern is over the past five years, we’ve had a lot of development, which is good for the economy, but we’ve also seen more flooding than we’ve seen before,” Fox said.
Despite potential challenges and concerns with the development, Steele said she believes having H-E-B and the other mixed-use developments at Spur 149 will make the city more cohesive.
“Now that you can get that in our small community, it really speaks to the quality of life and ease that comes in and enjoyment of being able to access those amenities,” Steele said.
