San Benito holding off granting Resaca Village extension

dfwnewsa | February 2, 2024 | 0 | East Texas News , South Texas News

SAN BENITO — For months, city commissioners have been holding off on granting a developer a fourth extension in its construction of the city’s first resaca-side commercial project.

Under its 2019 contract, VARCO Real Estate, a Brownsville-based developer, was planning to invest $3.6 million to develop the project’s four phases spanning 30,000 square feet of commercial real estate, originally set for completion in December 2022.

More than four years after launching Resaca Village, VARCO has been proposing extending its construction timeline for the development of the project’s third and fourth phases.

But commissioners have been holding off.

“There was more negotiation that needed to be done,” Commissioner Tom Goodman said Thursday.


On Thursday, Jaime Alardrin, an official with OrigoWorks, part of VARCO, said the company has started construction on the project’s third phase.

Since VARCO launched San Benito’s first resaca-side commercial development in 2019, city officials have granted the company three extensions.

Last year, officials granted VARCO extensions allowing the developer to complete the project’s third phase by December 2024 and its fourth phase by December 2025.

“The commission wants them to move faster. The job growth in not as fast as I’d like to see,” Commissioner Pete Galvan said in an interview. “They’ve been having a hard time renting out the plaza. We’ve given them enough time.”

In December, commissioners held off on granting VARCO proposed extensions on the development of its third and fourth phases after the city’s Economic Development Corporation signed off on the plans.

A sign on the edge of the currently developed property on Friday, April 14, 2023, announces the upcoming Phase 2 for Resaca Village in San Benito. (Denise Cathey/The Brownsville Herald)

Now, the clock is rapidly ticking away — the proposed agreement calls for construction of the third and fourth phase, each made up of a $1.2 million, 10,000-square-foot shell ready for tenants’ occupancy, to start by May 1, 2023, with completion by May 1, 2024.

As part of the agreement, officials are requesting VARCO make a $100,000 “additional final payment.”

“VARCO understands that if the date of substantial completion established by this agreement is not attained because of a delay caused by VARCO, the EDC will suffer damages … and VARCO shall pay the owner $500 as liquidated damages, and not a penalty, for each day that substantial construction extends beyond the date of substantial construction,” the proposed agreement states.

Under the agreement, city officials are also requesting VARCO trim its 10-year lease terms as part of plan to draw more tenants to Resaca Village.

“VARCO will agree to offer a three-year lease term to new tenants which do not require any build out by VARCO,” the proposed agreement states.

Shorter lease terms will help draw more business to the Resaca Village, Galvan said in an interview.

As part of the proposed agreement, EDC officials are pledging to support the proposed development of “crosswalk” connecting the project with the Heavin Resaca Trail, located on the opposite side of Business 77.

Meanwhile, Galvan is suggesting VARCO cut its rent to help draw more business to Resaca Village.

“The rent needs to be adjusted to market value,” he said in an interview. “The sales tax revenue would boost a lot quicker if they lower rents.”

In November 2018, the EDC leased VARCO 9.8 acres along the resaca off Business 77.

As part of an incentive agreement, VARCO is paying the EDC 10% of the development’s property taxes for 15 years.

After the 15-year period, the contract gives the developer the option of buying the property for $1.

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