City of Fulshear denies incentive agreement with Home Depot

The city of Fulshear will not move forward with a performance-based incentive agreement with Home Depot.

The proposed 134,000-square-foot Home Depot store near FM 1093 and FM 1463—which brought resident concerns about traffic at a May 12 meeting—would include a roughly $38 million investment from the company and is expected to generate at least 40 full-time jobs, according to agenda documents.

What residents need to know

At an Aug. 4 meeting, Fulshear City Council voted to deny a Chapter 380 economic development agreement in a 5-2 vote with Home Depot, with council member Richard Russell casting a dissenting vote. Council member Abhijeet Utturkar was absent.

A Chapter 380 agreement allows cities to provide sales tax incentives to developers in exchange for the project hitting performance thresholds, according to the city’s website. It also assists in offsetting costs related to construction and infrastructure.

The proposed agreement equates to 25% of 1% of the city's local sales tax created by the development for a five-year period or when a maximum reimbursement of $2 million has been attained.

Though the limit is set at $2 million, the total rebate is expected to be closer to $500,000 based on estimated taxable sales, per agenda documents.

Diving in deeper

Agenda documents show a traffic impact analysis was sought by the city to be included before a site plan was approved.

Assistant City Manager Kelsee Lee said a traffic analysis is generally required for developments, but Home Depot is not obligated to complete one due to existing development agreements for planned future commercial development in the area and how many improvements have already been completed. 


“If Home Depot chooses to just come without any sort of incentive agreement, they will still not be required to do a [traffic analysis] just because we cannot require them to do it per the development agreements,” Lee said. “It was only something that could be negotiated as part of an incentive agreement.”

Lee said most of the potential issues center on Flewellen Way and how the increased amounts of traffic from passenger and commercial vehicles could affect residents.

Lee also specified conservation efforts are in place for Home Depot to install and utilize a rainwater harvesting and/or water reuse system for irrigation use, but said those proposals are not mandatory in the agreement for the garden center.

Final takeaways

After the decision was made, Home Depot representatives present at the meeting declined to comment.

Though council denied the agreement, it does not mean Home Depot will not be coming to Fulshear.

“We do want Home Depot in Fulshear,” Johnson said. “You are a great company and we want you here. Similar to how we want a Target here. At the moment, it's just how do we make it work for both of us and I think a 380 [agreement] is probably just not the right way to go.”

However, Russell said he believes the city “made a commitment” to approve the agreement and that it was important to follow through with it.

“This decision will have lasting implications for future economic development opportunities,” Russell said. “The manner in which we handle negotiations and commitments sends a message to businesses and developers considering investing in Fulshear.”