Ground broken on 550,000-sq.-ft open-air center east of Houston
Nearly a decade after having purchased — and then demolished — the 1.6 million-sq.-ft. San Jacinto Mall in the Houston suburb of Baytown, Fidelis Realty Partners has broken ground on its replacement.
Called San Jacinto Marketplace, the 105-acre mixed-use development at the intersection of I-10 and Garth Road will include a 550,000-sq.-ft. shopping center with open green space. Ten anchor tenants will occupy 75% of all retail space. Current plans for the rest of the property include restaurants, office buildings, a hotel, and one or two three-story apartment complexes.
The goal of the Bellaire, Texas-based Fidelis is to complete Phase 1 of the project by the end of 2026 and to have the entire development completed by in 2028.
“The days of the indoor retail facility are probably gone, certainly for the foreseeable future,” Fidelis CEO Alan Hassenflu, told the Houston Business Journal. “It's just too expensive to operate, and you've got to pass that cost back to the tenant, which harms their profits.”
The developer assembled the entire mall property from seven different owners over seven years, starting with the initial 40 acres consisting of the multitenant indoor area — minus the anchors — from the California-based investment firm Triyar in 2015.
Acquisitions of the anchor spaces for Mervyn’s, Service Merchants, Marshalls, Sears, JCPenney, and Macy’s followed through 2022 — in some cases helped by bankruptcies and store closings.
“We believed that we’d be able to reconstitute a retail development and continue to keep JCPenney and Macy's in that new development,” Hassenflu said. “But when the pandemic came along, it kind of sealed the fortunes.”
Fidelis is currently engaged in negotiations with the 10 new anchor tenants and expects to have signed leases from them by the end of the year.
In 2022, Fidelis signed a Texas State Chapter 380 agreement with the city of Baytown for San Jacinto Marketplace that grants it sales tax rebates of up to $16.2 million.
“While it has taken longer than any of us wanted, we are seeing real progress, and I can’t wait for our residents to see that the San Jacinto Marketplace was worth the wait,” Baytown mayor Brandon Capetillo said in a statement prepared for the groundbreaking ceremony, which took place on Oct. 2.
Baytown is located 25 miles east of downtown Houston, just across the Fred Hartman Bridge on Trinity Bay, and Hassenflu said he expects San Jacinto Marketplace to become a regular destination for shoppers as far as 30 miles to the east of it.
