SAN BENITO — The area’s first resaca-side development is rising along the banks.

In about two months, VARCO Real Estate expects to complete the first phase of the multimillion project to feature shops and restaurants off Business 77 across from the Heavin Resaca Trail, Lupe Zuniga, the company’s business development officer, said.

“It’s going to be a multi-use plaza with retail shops and dining,” he said. “It’s going to bring some economic development and job opportunities for the community.”

A Texas Regional Bank branch will anchor the Resaca Village development to include five other buildings on about nine acres at the site of the once-sprawling Guinzy’s Resaca Motel, razed more than 10 years ago.

According to a leasehold deed of trust finalized last month, the bank will finance the project for VARCO and developer Carlos Varela, who’s a bank director.

The deed shows VARCO has borrowed $2.5 million to fund the project.

As part of an incentive agreement, VARCO will pay the San Benito Economic Development Corporation 10 percent of the development’s property taxes for 15 years.

After the 15-year period, VARCO can buy the property from the EDC.

The project

For decades, city leaders have dreamed of developing commercial property along the resaca.

The project’s first phase, to feature the bank’s branch along with 12 spaces planned for shops and restaurants, is projected to be completed by the end of February, Zuniga said.

“Shortly after,” he said, the developer plans to launch the project’s second phase, expected to feature a similar number of retail shops and restaurants.

The project’s resaca-side boardwalk will include restaurants such as Tropical Smoothies.

“By the resaca’s where you see more of your dining,” Zuniga said. “There’ll be nice outdoor dining. It’s going to be a nice atmosphere. We want to capture the beauty of the resaca. We want the architecture to flow with the beauty of the resaca. That’s why the buildings will have an open view of the resaca.”

Economic boon

At the city’s EDC offices, Executive Director Rebeca Castillo projects the development will boost the city’s annual $5 million sales tax collection by as much as 30 percent within one or two years.

“It will have a big impact,” she said. “We’re coming a long way.”

Castillo said the development’s shops and restaurants are expected to pump out-of-town dollars into city coffers.

“It will draw traffic in and out,” she said. “It directly impacts the sales tax base. We have a draw from the neighboring communities — Rio Hondo, Arroyo City, Los Fresnos and Treasure Hills in Harlingen.”

As part of the project, the EDC plans to offer incentives to businesses opening at the plaza, Castillo said.

Under a program, the EDC offers grants of up to $10,000 to match businesses’ storefront investments.

Another program offers subsidized rents for as long as six months.

Already, the development is spurring business growth in the area.

“We’re starting to see it,” Castillo said.

Near the project site, she said, a duplex development, a car wash and a fast-food restaurant are opening.

“That area is just booming,” she said.

About VARCO

Based in Brownsville, VARCO is expanding its development in the area.

In Harlingen, its projects include Stuart Place Crossing, which features Texas Regional Bank’s $10 million headquarters.

“We specialize in Class-A development,” Zuniga said.

Since 2003, VARCO has developed real estate property, with projects in Texas, Arizona and Mexico.

Varela, a partner in the real estate firm as well as in OrigoWorks, a design-build architectural firm, is also director of IBEX Business Solutions.

From 2005 through June, he had served as a partner and director with Pronto Insurance, with more than 100 locations in Texas.

How we got here

In 2013, the EDC used $900,000 from a $1.2 million federal grant to buy the 9.8-acre property planned as the site of a so-called resaca boardwalk, expected to feature shops and restaurants near a museum.

Later, the city scrapped the project after officials determined a previous grant stipulated the proposed federally funded museum, planned to house the San Benito History Museum, the Texas Conjunto Hall of Fame and Museum and the Freddy Fender Museum, be built off Heywood Street.

What you should know:

– The project’s first phase is projected to be completed by the end of February 2020.

– It will feature a branch of Texas Regional Bank anchoring 12 spaces planned for shops and restaurants.

– It will include five other buildings on about nine acres at the site of the once-sprawling Guinzy’s Resaca Motel, razed more than 10 years ago.