Houston-based McLeod Sears is moving forward on redeveloping a seven-acre former Kmart site at the bull's eye of two major routes leading to the Port of Corpus Christi, its energy-related employment hubs and the most popular beaches on the Texas Gulf Coast.
The property is located in Portland, an affluent bedroom community fueled by tourism and a multibillion-dollar petrochemical industry in the Corpus Christi MSA. There is $38 billion of industrial development under construction within a six-mile radius of the project site, including a $12 billion development by Exxon, the world's largest ethane steam cracker plant.
The 82,939-sf Kmart, which closed in spring 2018 at 1400 Wildcat Dr., will be razed in the coming months to make way for 25,200 sf of high-end shop space and a handful of restaurant/retail pad sites. The acreage fronts Wildcat Drive and US 181, the most direct routes on the Gulf's north shore for beachgoers, tourists and residents alike.
To advance with the project, McLeod Sears has received a sales tax incentive from the city. The developer also has signed its inaugural ground lease – a 1.38-acre pad site for a Chick-fil-A restaurant.
"The empty Kmart is an eyesore. Without the city incentive, we would have been forced to reuse the structure," says Michael McLeod-Cobb, a partner in an entrepreneurial commercial real estate firm focused on making long-term, sustainable investments in Texas communities.
The developer is eyeing a summer 2021 completion for the class A project. David Hardesty of Hardesty Real Estate Group represented Chick-fil-A in ground-lease talks with McLeod.
"We are very pleased with McLeod Sears' plans for the redevelopment of the Kmart site," says Portland City Manager Randy Wright. "This is an excellent example of how a city, using tax incentives, can leverage a project that reinvigorates our economy and provides direct benefits to our citizens."
The Kmart, located at 1400 Wildcat Dr., was still open when McLeod Sears acquired it in 2017. It's across the bay from Corpus Christi proper and just south of Aransas Pass and Rockport, well-known destinations for outdoor recreation enthusiasts.
"We loved the real estate. We knew it would be great real estate whether or not Kmart was there," McLeod-Cobb says.
The trade area's population has inched above 110,000, a spike of nearly 35% since 2010 due in large part to the port's continued expansion. The average household income has reached $68,752 per year.
Tourism will always be a strong economic driver for the recreationally rich region, but the port's steady expansion has heightened interest in year-round investment opportunities. The petrochemical industry's increased on- and off-shore development is significantly impacting all sectors of commercial real estate.
"Portland is a high-quality place to live that needs additional retail. It's the next logical step for national and regional brands looking to expand beyond Corpus Christi," McLeod-Cobb says, "and they need a strong location. Our site is an undiscovered gem."
McLeod Sears owns roughly 500 feet of frontage along TX 181 and nearly 200 feet on Wildcat Drive. The combined traffic count is pushing 85,000 vehicles per day.
"Our access and visibility is unparalleled in this market. Wildcat Drive is an extremely strong back door for our project," McLeod-Cobb says. "We're ready to scrape the site and move ahead because of the city's wholehearted support, financial and otherwise."
McLeod Sears is a Houston-based entrepreneurial firm focused on finding and analyzing opportunities to make long-term, sustainable investments in communities, people and organizations. Its Grant Me The Wisdom Foundation, established nearly 10 years ago, is focused globally on women and girls, education, poverty alleviation and documentary film.
