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Eyesore to asset: New Motiva warehouse helps Groves’ property taxes

GROVES — For at least a decade, the space located at 4440 Twin City Highway remained empty and desolate. The former Super Kmart provided little to the community except becoming a visible eyesore.

On Oct. 18 of last year, Mark Fertitta Property Management bought the deteriorating building, spent roughly $1.4 million and months of hard work transforming the space from an eyesore to an asset.

Fertitta said the inside was completely gutted, given a new paint job, leveled floors, wall barricades, a new roof and LED lights. Additions included a secured fence and three electronic gates.

Brian Smith, from Better Built Fence, puts on covers to the backside of the fence Thursday to give privacy from residents next to the old Super Kmart in Groves.

After the renovations were completed, Fertitta and associates leased the space to Motiva’s local Port Arthur refinery to use as an industrial warehouse.

“The former owners turned the old Kmart into a warehouse and leased it to Motiva for a short time,” he said. “When Motiva moved out, rather than try to do renovations, the then-owners decided to sell the building. We saw the need for an industrial warehouse in the area so we bought it, fixed it up and leased it back to Motiva.”

The giant building sits on 24.4 acres and is 173,000 square feet with a considerable amount of laydown or parking area.

“(The size) is unheard of in having an industrial warehouse,” Fertitta said. “With all the plant expansion going on, it turned out to be a good investment. Motiva has taken the whole building and uses the parking lot for a lay down area for their renovation equipment.”

D.E. Sosa, Groves city manager and member of the Economic Development Corporation, said Fertitta completely flipped the building in looks and use.

“The property is back in good shape and being well maintained,” he said. “It looks amazing, even better than when it was a Kmart.”

Sosa said the warehouse is going to generate property taxes for Groves.

Motiva is using the old Super Kmart in Groves for industrial warehouse space. 

“Motiva can store whatever they want in there,” Sosa said. “There can be spare parts, hardware and maintenance tools for the upkeep of their refineries. Nuts, bolts, wires and all kinds of different items that the refinery keeps on hand for the normal operation —it all becomes taxable in January 2020.”

Sosa said all inventory is taxable to the city of Groves at the current rate, which will bring numerous benefits to the local community.

“(Fertitta) found the highest and best use for an empty property,” he said. “For every million dollars of inventory in the warehouse — and they could have 2-3 million in there — the city will get $7,600 in property taxes.

“$100 million of inventory is $760,000 for the city. Even if they only had $50 million in there, that would bring in $380,000. That is tremendous for us.”

Property taxes feed into the EDC general funds that are linked to first responder benefits, street maintenance, parks and recreation and drainage systems.

“(The funds) will go to everything in the city except water, sewage and garbage,” Sosa said. “It will allow us to do work on more streets, fix ditches and make sure we meet the needs of our citizens with the fire and police departments.”

The extra funds will also assist in stabilizing property taxes for current residents.

“We didn’t think anything was going to come from that property,” Sosa said. “Now, it means that there is no need to increase property taxes for the rest of the residents, and it’s bringing in several benefits to our community starting next year. We couldn’t be happier.”

In last month’s Economic Development Corporation Meeting, the board approved Mark Fertitta Property Management for a reimbursement grant in the amount of $24,000 for landscaping and security improvements to the warehouse.