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Council approves Chapter 380 incentive to keep Macy's at Towne East Mall
Summary
The council unanimously approved a Chapter 380 economic development agreement with Towne East Mall owner Brookfield/Towneysmall LLC to provide a 1-cent sales tax rebate tied to Macy's performance, capped at $2.5 million or 10 years, to retain Macy's as an anchor tenant.
The Mesquite City Council unanimously approved a Chapter 380 economic development performance agreement Wednesday to encourage Macy's to remain at Towne East Mall.
Kim Butram, the city's economic development director, told the council Brookfield Retail (TowneEast Mall LLC) owns roughly 468,000 square feet of the mall core, including the DICK'S Sporting Goods building, and asked the city to offer an incentive to prevent another anchor vacancy while Sears redevelopment moves forward. "This is a well thought out plan and a structure for transitioning the mall," Butram said.
Under the agreement, Macy's must attain at least $15 million in annual sales to qualify for a 1-cent rebate of its local sales tax (equivalent to 50% of the city's 2-cent local collection). Annual payments will be verified by the Texas Comptroller. The incentive is capped at $2.5 million or 10 years, whichever comes first. If Macy's fails to meet the $15 million threshold two years in a row, the agreement terminates. The store must remain branded as a first‑class Macy's department store and remain in compliance with city codes.
Council members framed the vote as a defensive step to protect a key sales-tax generator. "We're positioning ourselves to make sure that we essentially salvage having an anchor there for the next five years," Councilman Kenny Green said. Deputy Mayor Pro Tem Jeff Casper, who moved approval, called the structure "a smart incentive package" that is conditioned on sales tax production and includes callback mechanisms for underperformance.
The public hearing drew no speakers. Councilman Casper moved approval; Councilman Merton seconded. The motion passed unanimously, 7-0.
Why it matters: The Towne East corridor supplies a significant portion of Mesquite's sales tax revenue. City staff said Macy's is a higher-performing store locally but the retail sector faces closures nationally; Macy's has announced store closures and the company planned 66 closures in 2025 with additional reductions possible through 2026.
Implementation: City staff will finalize and execute a Chapter 380 performance agreement with Towneysmall LLC and administer the rebate if qualifying sales thresholds are met. Annual verification will rely on sales tax data from the Texas Comptroller.
