By: Tony Cantu / Patch
ROUND ROCK, TX — City council members have approved an incentive agreement with EastGroup Properties to spur investment of more than $7 million to build two new industrial buildings in Round Rock.
EastGroup is an equity real estate investment trust focusing on development, acquisition and operation of industrial properties in major sunbelt markets throughout the U.S. Round Rock Mayor Craig Morgan lauded the agreement as a potential economic development engine.
“With a vacancy rate below 5 percent in Round Rock for industrial speculative space, this project is a huge win for our community,” the mayor said.
The Round Rock Chamber and the city worked closely with EastGroup in achieving the project, city officials said. Its first phase is expected to add 160,000 square feet of space on 12 acres of land located at 900 E. Old Settlers Blvd. The initial two buildings are expected to be complete by third quarter 2018, according to city officials.
The five-year agreement calls for the city to make payments equal to 75 percent of the buildings’ property tax payments in the first two years after it opens, and payments equal to 50 percent in the third and fifth years, officials said. To receive the payments, EastGroup must invest a minimum of $7 million in the property by Dec. 31, 2018, and the facilities must remain operational through the duration of the agreement, officials explained.
David Y. Hicks Jr., vice president of EastGroup Properties, amplified on the deal: “The Settlers Crossing project is Class A space in a Class A municipality. “Our company has purchased 30 acres of land at this site and our future development goals include a master-planned, multi-phased project consisting of four business distribution buildings totaling 340,000 square feet.”
Hicks explained the company’s growth strategy as one centered on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained sub-markets. EastGroup’s portfolio, including development projects in lease-up and under construction, currently encompasses a collective 38.6 million square feet of building space, according to company officials.
Ben White, vice president of economic development for the Round Rock Chamber, touted the presence of such speculative real estate in the city, intended to act as magnets in luring industry.
“Having truly speculative building space developed in Round Rock is a good signal that our economy is thriving,” White said. “These new buildings are a much-needed selling tool for our business attraction and business retention and expansion efforts.”