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RESTAURANTS, STORES TRAVEL CENTERS THRIVE IN REBOUNDING ECONOMY…
When Cotulla city finance director Ernesto Garcia III gave his monthly report to elected officials on July 13, few expected to hear the numbers he would present.
An economic rebound is evident in the city and can be traced directly through the tax revenues that Cotulla recoups from retail sales and hotel bookings.
Garcia told city councilors at their July meeting that sales tax revenues for the period between October 2022 and this month have grown by more than 43 percent over the same period the previous year.
Cotulla collected over $224,000 in sales taxes through the state of Texas in its July disbursement, which reflects business activity from May.
At the same time last year, the city collected $142,000. That number, while at least 58 percent higher than the previous year, reflected the city’s return to a vibrant economy from an almost total shut-down during the coronavirus pandemic.
Garcia and city administrator David Wright said last week that the present figure represents Cotulla’s true business growth rather than its rebound from the pandemic. Sales tax revenues are a direct indicator of retail sales in the community and include all taxable goods from housewares and clothing to snacks and drinks at local travel centers.
Wright said the city can trace its positive growth to the beginning of the energy industry boom over the Eagle Ford Shale in 2008, when revenues began blossoming. It was at that point, he said, that councilors could draft realistic plans for street paving, water and sewer line replacement, and a host of upgrades from gas meters to garbage trucks in the knowledge that the improvements could be accomplished.
Those revenues, he added, also enabled the city to shoulder the burden of subsidizing its gas supply costs when market prices skyrocketed in 2021 and 2022, but City Hall kept customer rates at the level, paying the difference out of its own accounts. Houston Ship Channel prices for gas have now dropped, Wright said, and the city has survived the financial outlay unscathed.
Although Cotulla sustained two heavy blows to its business, almost concurrently, the coronavirus pandemic and the slow-down of energy industry activity, both Garcia and Wright believe there is every reason to believe that growth remains the underlying trend.
A significant effect of steadily increasing sales tax revenues, Wright said, is Cotulla’s ability to keep residents’ utility services at rates lower than in many other South Texas communities.
Cotulla has not raised its rates for water, sewer, trash collection or gas since 2018.
Steady business in the hotel industry is likewise reflected in city revenues, as Cotulla collects a fee from every room booked at any of the community’s two dozen hotels and motels. Those revenues, according to both Garcia and his predecessor, Jorge Flores, are expected to exceed $1.5 million for the 2022-23 budget cycle.
Garcia told councilors this month that third-quarter collections in hotel taxes surpassed $252,000 and that the city has collected more than $902,000 for the fund since last October.
Revenues from the hotel tax are regulated by the state of Texas and may only be used for city expenses related directly to promoting tourism, thereby further boosting the hotel industry. Cotulla has used its revenues in the special fund for downtown beautification, restoration of historic buildings, supporting the annual Wild Hog Cook-Off and county fair, installing bronzes of historic figures at city parks, commissioning a mural of Cotulla’s history for a downtown display and organizing the annual Independence Day celebration.
At street level, Garcia said, Cotulla’s economic strength is evident in the number of new jobs available, although many remain unfilled.
“Almost every store you go into has a sign saying ‘Help Wanted,’ and that tells us there is enough business going on to require extra staff,” the city finance director said. “All our restaurants and cafes are busy at every meal time, and that doesn’t just mean people are spending more than they did before. It means the businesses have to hire extra staff to keep up with demand.
“Those wages, if they are for local residents, may stay right here in the community and may be spent at our stores,” Garcia said. “It’s a fast-moving cycle.”
Cotulla will celebrate the grand opening of its newest truck stop later this year when the Love’s travel center opens its doors. The business is positioned at an interstate exit ramp on the southern edge of Cotulla in an area annexed by the city for business development. The expansion marked the first time in the city’s storied history that Cotulla moved its boundary across the Nueces River, the onetime demarkation line between Texas and Mexico prior to the war of 1848, when the border was moved to the Rio Grande.
The Love’s travel center promises approximately 68 jobs, each paying at least $15 an hour, according to City Hall.
Also opening soon in Cotulla is the Alamo Lumber hardware and construction supply retailer on North Main Street, with further employment opportunities.
Wright said he hopes the jobs go to La Salle County residents or that those coming to Cotulla for the work will choose to move into the city permanently.
The Love’s development becomes the sixth full-size travel center, gas station and foodservice retailer to open in Cotulla since 1990. South of the city, La Salle County has three additional travel centers along IH-35 and in Encinal.
“Truck stops are definitely feeding the economy, and we can detect a change, just from ongoing road construction at a vital intersection,” Wright said. “When the numbers come in, we are going to see how that work on the road changed customer frequency at the nearby businesses. That’s how directly we can read this economy and, unfortunately, how it can be affected negatively by something as simple as roadworks.”
Businesses and hotels are also presently seeing a boost in their trade from the state’s Operation Lone Star, in which Texas Governor Greg Abbott ordered the mobilization of hundreds of state troopers, medical staff, special agents and Texas National Guard to the border region for added security and patrol. Many of those officers and crew are lodged at hotels in La Salle County.
“Those parking lots are often plumb full of patrol vehicles when the officers come off their shifts,” the city administrator said. “And you can bet they’re not sitting in their rooms eating microwave popcorn. They’re going out to eat every meal, every day, and that means a huge boost for all our restaurants.”
“This is effectively giving money back to the people of Cotulla, and there are job opportunities and career prospects for people throughout the county,” Garcia said. “For example, almost all of our firefighters are local. Many of our sheriff’s deputies are local. These are career professionals who benefit from our thriving economy and give back to it at the same time.”
“The council wants this city to grow,” Wright said. “They have tasked me with that. They don’t just want truck stops.”
Councilors Manuel Rodriguez and Tanis Lopez spoke up at the July 13 meeting during presentations by strategic planners and grant-writing economic developers to echo their constituents’s wishes that Cotulla attract a new retail store and a grocery. Walmart and HEB were at the top of their list.
“When we can demonstrate that Cotulla sits on a vital trade corridor that feeds its economy and has a population capable of sustaining big business, the big business will come,” the city administrator said. “We may not be at that point yet, but we are setting a goal, and the time will come when Cotulla is a viable contender. There is no telling how many doors that will open for us.”