The Tennessee developer that aims to bring a Sprouts Farmers Market to Kyle has received incentives that will help with the construction of the 23,000-square-foot grocery store along with an additional 18,000-square-feet of retail space.
Brentwood, Tennessee-based GBT Realty Corp. on Nov. 20 was unanimously approved by the Kyle City Council to receive up to $950,000 in incentives over seven years for the project at the northwest corner of FM 1626 and Kohlers Crossing in the 138-acre The Brick and Mortar District.
The approval came about three months after the project was first publicly brought before City Council. GBT's proposed development would rise on four acres at the corner of FM 1626 and Kohlers Crossing, less than a five-minute drive from the Kyle Crossing center, which includes stores such as H-E-B LP, Target Corp. and Walmart Inc.
The incentives for GBT – codenamed "Project Chia Pet" – provide the developer a one-time $300,000 grant that will be paid in the first year. The remaining incentive will be paid over the next seven years in the form of 50% property and sales tax reimbursement to the developer, or until the maximum amount of $950,000 has been reached.
GBT agreed to higher architectural design standards in return, which include building and landscaping enhancements to match the rest of The Brick and Mortar District, the addition of a plaza and lawn area that could be used for live music, and the painting of several murals. The company is also required to obtain a certificate of occupancy for Sprouts by March 1, 2025, and begin operations within 30 days. They need a certificate of occupancy for the additional shell buildings by May 1, 2025.
Kyle Mayor Travis Mitchell said during the Nov. 20 meeting that the city and developers "have been working a long time to bring this project together" and commended everyone for going back and forth.
"We're trying to make sure that the development project reaches a particular architectural and aesthetic standard," Mitchell said. "Certainly, we're excited about the Sprouts and some of that retail coming in. But it's also really important that the retail anchor project comes to fruition in a particular way to help set the tone for the Brick and Mortar District. You only get one chance to do an anchor project."
GBT's portfolio spans more than 40 million square feet of commercial development, including grocery-anchored shopping centers and mixed-use developments, in 31 states. That represents real estate worth more than $8 billion, according to its website.
During an Aug. 15 Council meeting, Zach Rogers, who represented GBT, noted the company is a known as a preferred developer of Sprouts grocery stores, especially in Texas. He said the company was seeking incentives to achieve the higher design standard desired for the project, calling the location "very exciting."
"We believe in the vision, we believe in Kyle, Texas, we believe in Plum Creek," Rogers said at the time. "We think it's going to be a great center anchored by Sprouts with the shops buildings as well."
Kyle is the second-largest city in Hays County, with an estimated 2022 population of more than 57,000, according to U.S. Census Bureau data — up more than 25% just from 2020.
With all of that residential growth, Kyle is seeing a flood of retail and restaurant development, bringing in names like Snooze, Cava, Mean Eyed Cat, Freebirds World Burrito and Academy Sports and Outdoors. Costco Wholesale Corp. opened one of its membership warehouses in Kyle earlier this year.
This project would mark the first store for Phoenix-based Sprouts (Nasdaq: SFM) in Hays County. The grocery store chain already has six stores between Travis and Williamson counties, to the north.
The Kyle store is part of Sprouts' larger expansion plan in the Austin metro — the company wants to double its count in the area. On the opposite side of the metro, Sprouts is working on another 23,000-square-foot store in Georgetown that could open in the fourth quarter of 2024. Sprouts typically employs between 70 to 110 workers per store, said Dan Croce, Sprouts' senior vice president of real estate, in a previous interview.
Sprouts is not the only grocer investing in Kyle. H-E-B will remodel its Kyle store in 2024, according to H-E-B's public affairs spokesperson, Tamra Jones.
"We are delighted to make a capital investment for our Kyle H-E-B customers. H-E-B is in the finalizing phase of planning and design before we begin construction early next year. The Kyle H-E-B will remain open during the remodel and we expect the timeline to last over a year," Jones said in an email.
Though she did not provide additional details, a Nov. 6 filing with the Texas Department of Licensing and Regulation gives preliminary insight on what's in store for this location. The filing states there will be an expansion to the existing H-E-B Plus at 5401 S. FM 1626, estimated to cost $28 million. The San Antonio-based grocer has been bullish on opening and improving stores — the company has opened three stores in the metro this year plus more under construction.