Resaca Village 'substantially complete' as San Benito, VARCO battle

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SAN BENITO — Amid a legal battle, the city’s first resaca-side commercial development is “substantially complete,” the company behind the project says.

The $10 million Resaca Village development featuring six tenants with a seventh on the way has created more than 100 jobs, aside from construction work, VARCO, its Brownsville-based real estate developer, said in a news release.

Now, tenants include Tropical Smoothie, Cold Stone Creamery, Montalvo Dentist Aesthetics, Calacas Tacos & Beer and La Hacienda Mexican Restaurant, along with a Texas Regional Bank branch, while La Mesa Del Mar is planning its opening, expecting to create 15 jobs, the release said.

“VARCO will continue to welcome and celebrate new tenants coming to Resaca Village,” company officials said in their news release.

Meanwhile, VARCO and the city of San Benito remain locked in a legal battle over the Resaca Village plaza along Business 77.

”Even with this dubious and inexplicable opposition from the administration, VARCO has continued to prioritize this investment, and VARCO leadership is proud to say that the project is substantially complete,” company officials said. “The residents of San Benito deserve a project like Resaca Village that will truly impact the city’s quality of life, and VARCO is proud to be leading in that effort.”

In April, VARCO filed a lawsuit against the city, claiming San Benito’s Economic Development Corporation breached the parties’ contracts surrounding the development of Resaca Village, failing to “honor its obligations” under an agreement extending its construction timeline while claiming its amendments “void” because city commissioners had not approved them.

In response, the city filed a counter suit, claiming VARCO breached its contract when the company failed to comply with the city’s agreements granting extensions on the project’s completion, originally set for 2022.

”In April, VARCO Real Estate San Benito LLC. was terminated by the San Benito Economic Development Corporation and the city of San Benito for its continued failure to comply with a written performance agreement,” city officials said in a news release.

“The written performance agreement stated that the construction and operation of the mixed-use plaza would create primary jobs, promote and develop existing, new or expanded business and promote economic development, job growth and employment opportunities,” city officials stated.

City officials argue the company’s “continued failures over the years … have resulted in significant financial losses to the entire city. The lawsuit indicates that VARCO failed to pay base rent, failed to include the San Benito EDC on the insurance policy and failed to provide the amount of insurance under the contract,” city officials said.

In the lawsuit, city officials claim VARCO “was deceptive and misleading, was negligent and failed to vacate the premises,” adding damages have amounted to more than $1.8 million.

In May, Cameron County Justice of the Peace Chuy Garcia denied the city’s request to evict VARCO from the Resaca Village project site.

“The implausible and wrongheaded attempt to evict VARCO was swiftly denied in a court of law,” the company stated in its news release.

In response to some of the city’s claims, VARCO states “Resaca Village has provided the city with proof of insurance where the city is named, financial statements and owes no taxes or rent to San Benito.”

Now, claims of stolen water are igniting the battle.

Earlier this month, city officials accused VARCO’s OrigoWorks of stealing water at the Resaca Village project site.

Days later, Justice of the Peace David Garza dismissed the citation against OrigoWorks because the city had issued it to the wrong party, Paul Serafy, an attorney representing VARCO, said.

But the city continues its fight.

“The water theft case pending in criminal court may result in punishment to those responsible for stealing public water, and additional damages to the city of San Benito,” officials said in their news release.

In response, Serafy said the city’s claim stemmed from a subcontractor’s mistaken hookup to the wrong water supply, while the company’s offering to reimburse the city for water used.

“Once VARCO became aware of the claims, they immediately inquired about them with the site superintendent, who reported that the subcontractor used the back-flow only once. It had previously not been used,” the news release states. “VARCO will remedy this one-time occurrence.”

“It is disappointing that San Benito’s leadership prioritizes politics over community progress,” company officials said in the news release. “VARCO hopes that the city of San Benito and San Benito Economic Development Corporation will do their job of providing support for those willing to make significant investments in the community. An economic development organization’s sole purpose is to promote growth and development.”