Hays Co Bar-B-Que plans to relocate from San Marcos to Kyle to a smaller restaurant space with room for other retailers to open on the property. The business could receive public subsidies in the process.
The 17-year-old barbecue business, owned by Michael and Asenette Hernandez, sold its 8,000-square-foot restaurant in San Marcos to the Hays County Food Bank and closed that location on June 15. Now, the Hernandez family is under contract for a 1.5-acre property at 505 South Old Highway 81 at the edge of downtown Kyle. The restaurant will be located almost directly across from Project Two Step. The property previously housed a tire shop, leaving in its wake a large industrial building.
During a July 16 Kyle City Council meeting, several council members including Mayor Travis Mitchell praised the business’ plans to open in Kyle. City council members unanimously voted to draft a Chapter 380 agreement that would include a maximum $300,000 grant for utility improvements to be awarded after benchmarks are met and upgrades are made, plus a three-year restaurant incentive of 50% property tax rebate and a 50% sales tax rebate. The proposal will return to city council next month for a formal vote.
“You’re not coming from a trailer directly here. Barbecue business is extremely competitive, it’s extremely difficult, and a lot of times when cities want to financially incentivize a brand new small business, or a small business that maybe was succeeding out of a trailer but doesn’t know how to operate a larger facility, there’s a lot more risk to the city. But (Hays Co Bar-B-Que) is an established brand that has already made the move up and then move up again,” Mitchell said at the meeting.
Buda, another suburb near Kyle, recently had an incentives deal blow up after Austin food trailer Valentina's Tex Mex BBQ failed not long after opening a brick-and-mortar shop. The fate of the restaurant and its incentives package remain up in the air.
Kyle leaders hope the new Hays Co Bar-B-Que will bring in food tourists because it has secured a place on Texas Monthly’s The Top 50 Texas BBQ Joints list.
The project will be built out in two phases. The first phase will be for a 2,000-square-foot restaurant, plus an approximately 1,500-square-foot outdoor area. In the second phase, restaurant owner Michael Hernandez said he plans to build a two-story area to make way for other restaurant and retail operators. The second phase will be made up of six shipping containers on the bottom floor and another six on the second floor. The property would also house a large playscape, an outdoor music stage and a walk-up bar.
When completed, the space will provide patrons a variety of options to eat, Hernandez said. It will be similar to a food hall where people from the same party can purchase food from whichever restaurant they prefer and gather in a communal area. Hernandez said he wants to bring more local restaurants and operators to the project.
Hernandez estimates the two phases will be finished in about a year, with a ballpark cost of $2.5 million to $3 million.
It will take about six months to get the property rezoned, Hernandez said. In the meantime, the business owner said he plans to open a food trailer to supplement the restaurant.
Hays Co Bar-B-Que brings in about $3 million a year in gross sales, Hernandez said. But barbecue is a difficult industry. The most recent challenges have been hiring the right people and inflation. This year, Hernandez said he has seen the price of goods climb between 15% to 20%, a difficult price tag to stomach when restaurants run on razor thin margins. Still, the business is profitable, he said.
Hernandez made the move from San Marcos to Kyle to open a smaller footprint restaurant. He wants to scale back to enjoy time with his family, as the owners have worked themselves to the core, he said. Owning the property will give the owners a different business approach that allows them to scale back with the financial cushion of leasing out space.
Hays Co Bar-B-Que is expected to employ between 15 to 20 workers, Hernandez said.
Kyle’s food scene has been booming with new restaurants, such as Denver-based breakfast spot Snooze, Washington D.C.-based Cava and others. New real estate developments will attract even more.
“This is going to be a great venue for our city. I think this is going to be something that the residents are going to get really behind, really excited about,” said Kyle Mayor Pro Tem Robert Rizo. “To see the downtown coming back to life, I mean it’s been a long time since I’ve seen that, almost since I was a kid.”
Notable companies that are ramping up in the suburb include Sovereign Flavors Inc. and Tesla Inc. Other retail projects include Costco Wholesale Corp., Sprouts Farmers Market and the $250 million Vybe Park.
Kyle's 2023 population was at 62,500.