Kerrville approves limited sales‑tax rebate to spur River Hills Mall redevelopment

Kerrville — The Kerrville City Council voted unanimously May 13 to approve an economic development agreement with the owners of River Hills Mall that offers a capped, performance‑based rebate of city sales tax to incentivize demolition and repurposing of a central portion of the mall.

Under the approved agreement, the mall owners would spend about $4 million to demo and renovate a middle section of the mall and, if Academy Sports and Outdoors leases the redeveloped space and meets performance conditions, would receive a 50 percent rebate of the city portion of sales tax generated by that store for up to four years, capped at $125,000 per year and $500,000 total.

The Nut Graf: Council and staff framed the agreement as a targeted, time‑limited incentive to catalyze redevelopment of a long‑underused mall property; opponents in public comment cautioned that incentives can favor incoming chains over local businesses and urged stronger verification of construction costs and tax projections.

City staff described the proposal as performance‑based: the rebate is payable only if the retailer opens and generates sales. Staff said projections cited a 2018 retail leakage report showing roughly $19 million in sporting‑goods purchases leaving Kerrville; Academy’s typical store sales of $18–$22 million could capture some of that spending if a store locates in town. Staff estimated annual city sales tax from an Academy store would be roughly $180,000–$220,000.

In public comment, longtime local merchant Harold Buell urged the council not to allow outside retailers to receive “unfair advantage” through subsidies, saying such subsidies harm established local businesses that already pay local taxes and employ residents. Another speaker, George Brody, asked the council to obtain independent proof of the mall owners’ promised $4 million investment and not rely solely on tax‑roll values.

Council members debated the broader policy tradeoffs: several members said the city has programs to assist existing businesses and an economic development manager position was recently created to support small business retention and expansion. Councilmember Brenda Hughes argued the agreement is aimed at revitalizing a property that has been difficult to redevelop and could increase local sales tax revenue, helping the city rely less on property taxes.

City staff confirmed the contract is specific to the prospective tenant in the current draft and that payments are to River Hills Mall owners, not the tenant. Staff said the rebate would be paid only after the retailer opens and generates taxable sales, and that the program includes a not‑to‑exceed cap of $500,000 across four years. The council approved the contract after a motion to accept staff’s recommendation.

Ending: The agreement requires the mall owners to meet construction and occupancy milestones and to report sales‑tax receipts before any rebate is paid. The developer and potential tenant were still in negotiations at the time of the vote; the council’s approval authorizes the city manager to finalize the contract.