Grocer H-E-B buys 17 acres in Del Valle area


Highlights

Tract is part of large, mixed-use project planned along Texas 71 between FM 973 and the Texas 130 tollway.

H-E-B’s land is in an area destined for more growth.

Grocer H-E-B has purchased 17.2 acres near Austin-Bergstrom International Airport in Southeast Austin, the company confirmed to the American-Statesman, adding to its development pipeline in a growing part of the Central Texas region.

The tract is at the southeastern corner of FM 973 and Texas 71 and marks the first land acquisition in the Del Valle area for San Antonio-based H.E.B., the dominant grocery chain in Central Texas. The purchase price wasn’t disclosed.

The H-E-B site is in an area that’s primed for growth. Metrostudy, which tracks the Austin-area market, says 55,916 new homes are in the planning pipeline for that area.

Developers have said the area needs more retail and other services, with some referring to it as a “food desert” because of the lack of grocery stores.

“Whoever solves the food desert problem and gets a grocery store will win the 71/130 race,” local developer Pete Dwyer told the Statesman. Dwyer previously owned land near the Texas 71/Texas 130 toll road interchange.

Austin City Council member Delia Garza, whose district includes much of Del Valle, said she has made getting a grocery store to the area “a priority since Day 1.”

“In a city as prosperous as Austin, we shouldn’t have families living in food deserts,” Garza said.

An H-E-B spokeswoman said the company doesn’t yet have a development plan for the site. All but about 2 acres of the land are part of a 390-acre tract zoned for a planned mixed-use development called Velocity Crossing.

“As we review our long-term planning options it often makes sense to purchase property in advance of our current real estate needs,” Leslie Sweet, H-E-B’s director of public affairs for Central Texas, said in a written statement. “Development in Southeast Austin and Del Valle has been encouraging and it made sense to invest in this land. We have a network of stores in East Austin, and we remain interested in this community and look forward to watching it grow and develop.”

H-E-B has six stores east of Interstate 35, H-E-B spokeswoman Leticia Mendoza said. Two of those stores — on East Riverside Drive and on East Seventh Street — are within 6 miles of the newly purchased site.

Mendoza said there is no time frame for building a store on the land.

“This purchase is the first step of many, but again, we’ll work towards a commitment to build a store next, but H-E-B has no plans for development at this time,” Mendoza said.

San Antonio-based H-E-B is the dominant grocer in Central Texas, with 53 stores in the area and about 13,400 employees, according to the company.

As a privately held Texas-based company, “H-E-B is able to understand and react to Austin’s population growth” by buying and holding properties for future development, said Gail Whitfield, a local commercial real estate broker who owns The Whitfield Co.

“Because H-E-B is aggressively expanding in other Texas major metropolitan areas, I doubt there is a definite time for constructing a new facility on this property that they have targeted,” Whitfield said. “It’s anyone’s guess.”

Margaret Gomez, a Travis County commissioner whose precinct includes Del Valle, said she is “very, very excited” about the prospect of an H-E-B store in the area.

“I know that my constituents are going to be so, so happy,” she said. “This is the best Christmas gift that anyone could give Precinct 4 constituents.”

But Council Member Garza said that while she’s encouraged by H-E-B’s land purchase — “that obviously is the first step” — she doesn’t want the Del Valle community to assume a store will be built there soon.

“I’m hopeful but not counting my H-E-B chickens before they hatch, and I remain committed to continue working with H-E-B and other grocers to get a grocery store to Southeast Austin,” Garza said. She noted that H-E-B “owns land in a lot of places, and there’s not grocery stores there.”

In May, H-E-B purchased the Twin Oaks Shopping Center in South Austin. As with its newest purchase, H-E-B said it had no development plan in place for the Twin Oaks site, but noted that the acquisition would give it “additional flexibility” as it weighed long-term growth options for its existing store across South Congress Avenue.

In the area around the new Del Valle area site, Whitfield said he doesn’t think the population is dense enough “to achieve the sales volumes a large grocery operator needs to justify the expense of building and operating a store.”

But more rooftops are coming, and H-E-B itself could attract additional retail to the site, real estate experts and Velocity Crossing’s developers said.

“Historically, the absence of a grocery-anchored retail center in this area has resulted in less builder interest in the new home communities there,” said Eldon Rude, principal of 360 Real Estate Analytics, an Austin-based real estate consulting firm. “However, with this announcement I expect that to change.”

“An H-E-B grocery store at this strategic location will be a welcome addition for both existing residents as well as those considering living in the area,” Rude said.



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