H-E-B wants to expand its manufacturing operations and add a bakery, refrigerated warehouse and transportation building at its facilities on South Foster Road and south of East Houston Street. The company said its plans aren’t finalized, but the project would be its largest investment in its supply chain operations, boosting its logistics as it opens more stores in the region.
The county is providing an 85% property tax abatement through 2038, which it said is worth $16.4 million.
In exchange, H-E-B agreed to add 720 jobs at its facilities by Dec. 31, 2030, and spend $700 million on upgrades. The company currently employs about 1,389 people there and said it plans to add more than 1,200 full-time jobs by 2038.
The county made an exception to its requirement that companies asking for tax benefits must pay all full-time workers a “living wage” of $20.18 per hour or pay 70% of full-time employees an “all-industry wage” of $21.34 per hour. H-E-B pledged to pay 74% of all employees at the facilities at least $20.18 per hour within a year.
In its application in April for the tax break, H-E-B said it is also seeking financial benefits from the city. The City Council has not yet voted on a package.
The company said its expansion comes with “substantial” costs of improving infrastructure, training employees and buying equipment. Utility upgrades also are a factor. The company said it plans to invest about $20 million in off-site utility upgrades and will provide land for an on-site CPS Energy substation that will serve other customers in the area as well.
H-E-B said financial perks were “essential” to its project. Tax benefits would help bridge a financial gap between the East Side campus and other cities under consideration for the expansion, such as Temple, where it has a distribution hub, the company said.
It added that the area where it’s expanding was “bare and void of economic activity” when it started erecting its cluster of buildings, and its investment has since drawn other manufacturers. H-E-B bought more than 870 acres off of South Foster Road in 2017 and said it has since built more than $445 million worth of manufacturing facilities. The company received financial benefits from the city and county for the campus in 2018.
The new facilities could be built as soon as 2028. Some 319 of the new jobs would be in logistics and distribution, according to H-E-B’s application. Another 194 positions would be in production, with the rest of the jobs in administrative services, sanitation, quality assurance, security and maintenance.