The City Has Committed Up to $6.95 Million in Future Sales Tax. Nobody Had Added It Up.
By Eleanor Reese · August 14, 2026
Three big-box deals are signed. The zoning under the largest one is not. Every agreement is written so the city pays nothing until the registers ring, and that condition is the part almost nobody knows is in there.
A Chapter 380 agreement is the main tool a Texas city has for landing a store it wants. The name comes from Chapter 380 of the Local Government Code, which lets a city hand public money to a private developer if the council decides it serves economic development. In Magnolia the money almost always takes one shape: the city agrees to give back a share of the sales tax the new store itself produces.
Magnolia has signed three of these in the last twelve months. Each one got a short write-up when it passed and then dropped out of the news. Together they are the largest set of financial commitments the city has made to private development in years, and we could not find anywhere they had been totaled.
So here they are, in order.
September 9, 2025 — BCS Magnolia Place, up to $3.2 million. The council approved a Chapter 380 agreement covering 28 acres near FM 1488 and Spur 149, for a mixed-use project anchored by a Home Depot of at least 100,000 square feet. The city reimburses out of sales tax once the store receives a certificate of occupancy, on a ten-year term. The split is not flat: for the first five years the developer keeps 75 percent of the collected sales tax and the city keeps 25, and for years six through ten it moves to an even split. The same night the council rezoned 11.5 acres for 300 multifamily units and 16.9 acres for commercial use. The agreement also asks the developer to make commercially reasonable efforts to involve local small businesses and minority, women and veteran-owned businesses.
February 10, 2026 — Capital Retail Properties, up to $750,000. A separate agreement, a separate developer, roughly seven acres near the same FM 1488 and Spur 149 intersection. This one is tied to an Academy Sports and Outdoors store of at least 50,000 square feet and requires at least 40 jobs be created and kept. The cap is $750,000 across a ten-year term, written to end early if the cap is reached inside the first five years.
February 2026 — Fuqua Blackhawk Ltd., up to $3 million. This is the Magnolia Square deal, and it is the biggest of the three. The council approved an incentive agreement worth as much as $2.3 million in sales-tax payments plus up to $700,000 toward roadway improvements, tied to a 59.2-acre retail-and-housing project where FM 1488, FM 1774 and Goodson Road meet on the west side of town. The terms require a big-box anchor of at least 100,000 square feet and at least 40 jobs.
That is $6.95 million in caps the city has agreed to inside twelve months. Two of the three sit at one intersection on the east side. The largest is on the west.
Here is the part that is easy to get backwards, and we nearly did. The money for Magnolia Square is settled. The project is not.
The incentive agreement passed in February. What has not passed is the zoning underneath it, the planned development district that governs what actually gets built on those 59.2 acres. Planning and Zoning gave it a conditional recommendation on April 30. The council held a public hearing May 12 and tabled it, then spent a June 16 workshop on council questions, staff comments and the developer's tree mitigation proposal without taking a vote. We covered both sides of that fight in Issue 17 and said we would follow it. We have not been able to confirm a council vote on the zoning since that June workshop, and no anchor tenant has been named publicly.
So the city is on the hook for up to $3 million on a project whose shape is still being negotiated. That is not unusual and it is not improper. It is worth knowing.
Now the condition, which is the thing to carry out of this piece.
None of this is a check written up front. Every one of these agreements is performance-based, meaning the payment comes out of sales tax the development generates after it opens. If the store never opens, or opens and does not sell, there is nothing to rebate and the city owes nothing. City attorney Leonard Schneider said it plainly at the February meeting: if sales taxes are not generated, "then the development does not receive the benefit of that economic ... incentive."
That structure is genuinely protective, and it is the reason these deals are not the giveaway they can sound like when you only hear the headline number. It is also not the whole story. A rebated dollar is still a dollar of sales tax that does not fund police, streets or drainage for as long as the rebate runs, and the arithmetic only works if the new stores bring in spending the city would not have captured anyway. A shopper who moves from an existing Magnolia business to a new one has not grown the tax base. They have moved it, and now a share of it goes back out the door.
Both things are true. Neither is hidden. They are simply in a document most people have no reason to read.
The agreements are public record. Anyone can ask the city for the current version of any of them, and council agendas post ahead of each meeting on the city's website with a public-comment slot open to residents. If the Magnolia Square zoning comes back for a vote, or an anchor tenant gets named, that is a meeting worth showing up to.
We will keep the running total updated as the council acts.
Editor's note on format. We ran this as straight reporting rather than a two-column both-sides piece because all three agreements are settled facts on the public record, with dollar figures and conditions the city has already voted on. There is no second perspective on what a document says. The Magnolia Square zoning is a contested decision and still an open one, and we gave it the two-column treatment in Issue 17 where it belonged. This piece carries a stable pen-name byline per our ethics policy, which protects reporters on the growth-and-development beat. The reporting is real; the name has been changed.
Sources: Community Impact's September 10, 2025 report on the council's approval of the Chapter 380 agreement with BCS Magnolia Place, for the September 9 date, the 28 acres, the $3.2 million cap, the ten-year term, the 75/25 and 50/50 reimbursement splits, the 100,000-square-foot Home Depot anchor requirement, the certificate-of-occupancy trigger, the rezoning of 11.5 acres for 300 multifamily units and 16.9 acres for commercial use, and the local and minority, women and veteran-owned business language; Community Impact's February 12, 2026 report on the council's approval of the agreement with Capital Retail Properties, for the February 10 date, the roughly seven acres, the $750,000 cap, the ten-year term and its early-termination condition, the 50,000-square-foot Academy Sports and Outdoors requirement, the 40-job condition and city attorney Leonard Schneider's quoted remarks; and Community Impact's June 18, 2026 report on the council's continued review of Magnolia Square, for the February approval of the Fuqua Blackhawk incentive agreement, the $2.3 million sales-tax and $700,000 roadway figures, the 59.2 acres, the 100,000-square-foot anchor and 40-job requirements, the April 30 conditional recommendation from Planning and Zoning, the May 12 public hearing and tabling, and the June 16 workshop. The status of the Magnolia Square planned development district after June 16, 2026 was not independently confirmed, and no anchor tenant for that project has been publicly named. Dollar figures are caps written into the agreements, not amounts paid to date. Corrections and documents to newsroom@themagnoliastandard.news.