Nearly two years after demolishing the last components of the former San Jacinto Mall in Baytown, Houston-based Fidelis Realty Partners has broken ground on the project to redevelop it into San Jacinto Marketplace.
The 105-acre future mixed-use development at Interstate 10 and Garth Road will include a 550,000-square-foot shopping center with open green space, 10 anchor tenants making up 75% of all retail space, restaurants, multitenant buildings and pad sites; one or two three-story apartment complexes; a hotel; and office buildings. There will be about 2,500 surface parking spaces.
Fidelis CEO Alan Hassenflu told the Houston Business Journal the plan is to create a walkable development for residents and visitors.
The goal is to complete Phase 1, including all the retail and restaurants, by December 2026. The details for the second phase, which includes multifamily, hotel and office, are still being figured out, but the apartments could be built concurrently or a year later, Hassenflu said.
The hotel would be built by a third-party hotel developer, and Fidelis has already spoken to some hotel operators, he said.
Depending on market demand for Phase 2 components, he estimates the entire 105 acres to be developed by mid-2028. Fidelis declined to disclose the overall development cost.
“The days of the indoor retail facility are probably gone, certainly for the foreseeable future,” Hassenflu said. “It's just too expensive to operate, and you've got to pass that cost back to the tenant, which harms their profits. And it also is less convenient for people to get in.”
The 1.6 million-square-foot San Jacinto Mall, which opened in 1981, had been in decline for a while when Fidelis decided to acquire and redevelop it into an open-air shopping center.
The developer assembled the entire mall property from seven different owners over seven years, starting with the initial 40 acres consisting of the multitenant indoor area, without the anchors, from California-based investment firm Triyar in 2015. That was followed by acquisitions of the anchor spaces for Mervyn’s, Service Merchants, Marshalls, Sears, JCPenney and Macy’s between 2016 and 2022 — in some cases helped by bankruptcies and store closings, Hassenflu said.
“We believed that we (would be) able to reconstitute a retail development and continue to keep JCPenney and Macy's in that new development,” he said. “But when the pandemic came along, it kind of sealed the fortunes, at least in that particular location, for both Macy's and JCPenney to just close their stores and sell us their stores and their land.”
Fidelis is now in lease negotiations with the 10 new anchor tenants and expects to sign them by the end of the year.
Rendering of shops at San Jacinto Marketplace
In August 2022, the company signed a Chapter 380 agreement with the city of Baytown for the development, which grants Fidelis sales tax rebates up to $16.2 million. It replaced an earlier development agreement from 2015.
“This is a proud moment for Baytown as we celebrate what will be the quality shopping experience residents have been waiting for,” Baytown Mayor Brandon Capetillo said in a statement for the groundbreaking ceremony on Oct. 2. “While it has taken longer than any of us wanted, we are seeing real progress, and I can’t wait for our residents to see that the San Jacinto Marketplace was worth the wait.”
Hassenflu thinks the new development will revitalize Baytown and draw shoppers from at least 30 miles to the east.
“It will allow the residents of Baytown to be able to shop in their city again without having to go to other cities to shop,” he said. “The corner of Garth and I-10 is the epicenter of east Houston.”
