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Outlet mall increases sales tax receipts by $2 million

MERCEDES — In one year, sales tax receipts have increased by $2 million and property values have jumped by $100 million, city officials said.

Both increases are a result of one new business enterprise: the Rio Grande Valley Premium Outlets shopping center, which opened a year ago this Friday.

In just one year, residents have noticed the difference in the community.

“It’s had a tremendous impact on the city,” City Manager Ricardo Garcia said.

For many years, the city had little activity, business-wise, Garcia said.

“That was until Chelsea Property Group decided to invest in the city two years ago,” Garcia said.

Chelsea Property Group, the outlets division of Indianapolis-based Simon Property Group Inc., now owns more than 70 acres of land, said Michele Rothstein, senior vice president of marketing for Chelsea.

“We hope they are pleased with the economic benefits we have brought to the area, which includes tax revenue and jobs,” Rothstein said.

Construction is under way for the shopping center’s Phase II, bringing the number of stores to 140, Rothstein said. The expansion should be completed by spring 2008. However, mall managers will not release the names of the new stores just yet.

“But we believe shoppers will be very pleased with the enhanced collection of stores,” Rothstein said.

Resident Sandra Estrada said the added stores won’t only be a great place to shop, but will strengthen the community.

“The growth and revenue coming in will help people in the city find employment,” Estrada said. “That’s a great thing.”

Estrada said she has also noticed businesses being restored and wonders if that effect comes from the outlets. Finance Director Omar Gonzales said the city has seen a $2 million increase in sales tax revenue from fiscal year 2005-2006 to fiscal year 2006-2007.

Gonzales said the increase can be attributed to the outlets and the local businesses around it.

Garcia said with the opening of La Quinta Hotel three months ago and other commercial developments along Mile 2 East, the city is now looking forward to the next developments that could arise.

“We will continue working; we don’t want to focus on one project,” Garcia said. “We are moving forward and putting effort into other businesses, as well.”

Residents have also seen the changes the outlets have brought in the number of people who now stop in the town.

“Everything is busy,” resident Mari Moreno said. “Well, busier than before.”

Estrada agreed.

“It’s alive,” she said, with a laugh about the city.

Moreno said both the city streets and Expressway 83 are more congested than years before the outlet mall opened.

“I think once the construction on Expressway 83 is done, it will all be fine,” Moreno said.

Although Rothstein said it is premature to discuss future expansion, she did say there is room for a third phase if the outlets wished to expand again.

“Being a larger center will bring a larger critical mass of merchants, which will strengthen our position as a destination outlet center,” Rothstein said. “Everyone appears to be excited that the center is expanding so soon.”

Along with growth on the north side of Expressway 83, the city wants to concentrate on strengthening the downtown district.

The Mercedes Economic Development Cooperation is working to develop downtown businesses by offering grants to merchants, Garcia said.

“We want to make sure we provide for the local merchants,” Garcia said.

Along with the businesses, local services have also improved.

Garcia said the city has invested $8 million for a new public works building and fire department facility. Another $4 million will be spent on street paving, Garcia said.

“We’re able to do more things that we probably wouldn’t be able to accomplish two years ago,” Garcia said.

Moreno said she hopes to see street improvement from the newly acquired sales tax revenue.

“Especially the ones that are near schools,” Moreno said. “They need to be fixed.”

As the holiday shopping season approaches once again, Rothstein said she hopes to see crowds as large as last year when the shopping center opened.

“We are hoping to welcome large numbers of bargain hunters from throughout the Rio Grande Valley as well as Mexican nationals and area visitors,” Rothstein said.

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