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Last Updated: 7 June 2014
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Pharr leader wins high praise from big box developers

By Steve Taylor
[Pharr
Pharr City Manager Fred Sandoval and LPI Development Group President Don Nicolini are pictured at a groundbreaking ceremony for Pharr's At Home superstore project.

PHARR, June 7 - Big box retail project executives are fulsome in their praise of Pharr City Manager Fred Sandoval and the economic development team he has assembled at city hall.

Executives associated with the At Home/Garden Ridge project says they have never worked with such a competent city administration. The At Home store, which will occupy 107,000 square feet on eight acres of land, is being built near the intersection of Jackson Road and Kelly Avenue, just to the southwest of the I-69 Central and I-2 interchange.

“I have been doing this sort of development work for 35 years and I have never in my life experienced a city administration that is so incredibly cooperative and expedite-conscious,” said Don Nicolini, president of LPI Development Group.

“Fred Sandoval has put together a staff that is responsive, a staff that understands economic development and a staff that does what they say they are going to do when they say they are going to do it. In 35 years I never before experienced that. I congratulate the Mayor and especially Fred Sandoval.”

The mayor Nicolini is referring to is Pharr Mayor Leopoldo “Polo” Palacios.

Nicolini said LPI, which is based in Richardson, Texas, is the development services company for Garden Ridge. “Garden Ridge does an economic feasibility study and they start looking at the site. We take care of the technical aspects. How big, which way does it face, do we get a traffic light, how many parking places, etc.”

Nicolini’s comments were echoed by Dean Zurmeley, vice president of real estate for Garden Ridge. He said the company has a new corporate identity and is starting to brand itself as At Home. “We have not changed our passion of bringing affordable, home décor items to our customers.”

Zurmeley said he would like to thank Sandoval and his staff for understanding economic development.

“This is the exception rather than the general rule. You have got something special going on here (in Pharr), and also an understanding of how to make it happen. It is one thing to appreciate it, but how do you make it happen? That is just as important. I would like to thank Mayor Palacios and the city commission. And Fred Sandoval, he is a unique individual, to be able to pull this off.”

Zurmeley said there will be 50,000 unique items in categories such as patio, garden, home furnishings, wall décor, decorative accents, rugs and housewares. The company predicts between $10 million and $15 million of annual sales.

Zurmeley added that At Home/Garden Ridge is excited about being part of the Pharr community and being a good corporate citizen. “We look forward to you shopping at the new At Home store that will be opening this fall.”

Although the At Home/Garden Home store will sit on eight acres, there are actually 40 acres of land being developed near the intersection of Jackson Road and Kelly Avenue in Pharr. Brian Glaser is president of Glaser Retail Partners. He is going to help the City of Pharr develop the 40 acres. Glaser praised the Pharr city leadership for making the At Home/Garden Ridge project work so quickly and smoothly.

“Teamwork got this done. We have never stood on a site eight months later, from start to finish, and had trucks rolling over a site, watching dirt move. Everybody locked in together,” Glaser said.

“I will tell you, in the 20 years I have done this I have never seen a city come together and say what they are going to do and follow through on it like they have followed through on it. My hat is off to this city. This is a city of firsts. This is the first city I have worked with that has said everything they would do and they have followed through and done it. That is why you see dirt moving today.”

City Manager Sandoval gave the Guardian an in-depth interview about the real estate project and the financial deal that made it happen.

“When you are developing, the hardest part is the big box at the back. Anybody can sell the stuff upfront and then you kind of leave yourself with a soccer field at the back. The restaurants at the front are the easiest part. The big boxes at the back take up the most space and pay the least amount of money but they are the hardest part,” Sandoval said.

Asked when and where he first met Glaser, Sandoval said a retail trade show at Las Vegas a few years back. “It is one of those trips that you take. You drag the bag and you talk to folks. You meet a lot of people and you never know what is going to pay off, what is going to turn into a project. It is all about relationships. At a summer retreat last August I mentioned to the council that we do not have a real development group that believes in us. That is what we needed. We have got that now. They (Glaser Retail Partners) believed in us when we were just dirt.”

Sandoval said that for many years Pharr was a quiet, bedroom community many of whose residents would work and shop in neighboring McAllen. “Not any more. We are coming into our own now. It is our time,” Sandoval said.

“We have become a city of firsts. Pharr had the first Walmart in the Valley, the first Sam’s, the first Home Depot, the first Lowe’s, the first Pappadeaux, and the first Costco. When you are doing something novel, people can be taken aback, it is so different people say it cannot work. I applaud the City Commission. They are very pro-business, pro-development. You know we started this project when the economic bubble burst, when the banks were not lending money, when our sales tax revenues were down. Instead of going backwards, we did not cower; we went forward, with vision, leadership. We have a tremendous team. This is what success looks like. It fits in with our plan.”

Sandoval said it cost $16 million to purchase the land. He said nearby Costco was brought in as the loss leader. He said $2.5 million is going to the pay down the loan for the land.

“We are not subsidizing any of this. We are not giving any incentives. We have got to make as much money as we can to pay down the debt. We may be left with a little bit left over. We are paying that every year. It is a five year short term note. We are about three years into that and we are trying to decide if we extend that and make it a long term note to lower the yearly payment, or hopefully these guys decide to move faster and they close on everything and we are good,” Sandoval said.

“Between the general fund and the sales tax that this starts generating… you have to understand that nothing is stagnant. Everything is moving. By this time next year, this will have been in operation for half a year and it will be producing ten, 12, 15 million dollars-worth of sales. All of that will go back into the return on investment.”

Sandoval said his vision, when he sold it to the Pharr City Commission, was that for them to give him three to five years after everything is fully built out. Then, he said, the debt will be fully eliminated. “After that, everything else is gravy. But, remember, we are still moving forward. Our subsidy is a little bit upfront on the land, just a little bit. But that is it. Everything else comes back to the city, sales tax, property tax, job creation. This could end up being a $100 million or $200 million sales tax generator every year. That is $2 million to $4 million extra in our coffers. That is not counting ad valorem taxes, $300,000 to $400,000 a year. It is a good, steady flow of revenue for the city and we are bringing more people in. Talk to the guys at Costco, they have customers coming in from Ciudad Victoria, from Laredo, from Monterrey. They are coming here to shop. It is a great regional draw.”

Asked if there was anything else he would like to say for the business profile, Sandoval said: “This is the first of many projects. The partnership with these folks is going to continue. For some of us this is a once in a career opportunity. To be here at ground zero when things are coming in and to be a part of this, something that will benefit this city and this region for decades to come, is just a unique opportunity. I am humbled and blessed to be here.”


Write Steve Taylor

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