Leaders Of Fast-Growing Cities In Kaufman County Lay Groundwork For Rush Of Commercial Development

Just southeast of Downtown Dallas, cities in Kaufman County are preparing for a flood of commercial activity as developers leave the urban core in search of available land at a relatively low cost.

Census data over 10 years showed the population of Kaufman County grew by more than 40% to 145,310 between 2010 and 2020, making it one of the top 5 fastest-growing counties by percentage in the state. Earlier this month, U.S. News & World Report named Kaufman County the fastest-growing county in the nation between 2020 and 2021.

Much of the county’s growth over the past decade was concentrated in the city of Forney, where the population grew by 60%. But looking ahead to the next decennial census, burgeoning communities like Kaufman and Terrell are expected to lead the county’s growth, and officials are planning accordingly.

“The leadership in the community has known for years that growth is going to come this way,” said Ray Dunlap, president of the Terrell Economic Development Corp. “For the last 10-20 years, with a little piece here and a little piece there, Terrell has started to put mechanisms in place.”

The city of Terrell was home to more than 17,000 residents in 2020, up slightly from the nearly 16,000 residents recorded in 2010. But Dunlap estimates the population has grown to 20,000 since the 2020 census. Terrell expects to add up to 3,000 single-family homes in the next five years, and by 2030, a demographer’s report from Terrell ISD predicts 1,500 students will be added to its current enrollment of 4,700. 

Terrell was one of the first cities in Texas to pass a Type A sales tax, which funds its economic development efforts. Unlike other cities, Terrell built up its commercial tax base before focusing on residential. One of the ways it did so was by establishing a 4,500-acre tax increment reinvestment zone between Highway 80 and Interstate 20. 

“They set that up so that when development came, they would have a financing mechanism for the infrastructure,” Dunlap said. 

Today, that TIRZ is home to two major mixed-use developments: Crossroads at Terrell, a 255-acre, 600K SF retail center that is home to Chick-fil-A, Chipotle, Hobby Lobby, Marshalls and more; and Terrell Market Center, an 89-acre tract anchored by Buc-ee’s.

“Landing Buc-ee’s was a huge deal,” Dunlap said. 

Terrell has had success in recruiting some of retail’s biggest names, but the backbone of its economy is its strong base of industrial. The city’s centralized location within the region’s highway network means that 93% of the country can be reached in a two-day drive. The pandemic only accelerated this segment of Terrell’s economy, Dunlap said.

“We’re seeing a lot of inquiries from companies during Covid that realized we need to reshore our supply chain because leaving it in the hands of foreign governments is not a real smart thing,” he said.

Despite a slew of high-profile industrial deals — Jerry Jones’ Blue Star Land recently purchased 180 acres for a new industrial park in Terrell — Dunlap said there is still progress to be made in diversifying the city’s economy. In addition to building up the city’s residential offerings, Dunlap is focused on recruiting more hotels, retail and healthcare businesses. Office is another area of opportunity for Terrell, but Dunlap said he is waiting to see how the future of work pans out before zeroing in on that asset class.

“I’m not afraid to make mistakes, because if you don't make mistakes you won't move forward, but on something like that, you don’t want to invest millions,” he said. “I believe in the market, and I believe the stuff we are building here … will start an entirely different development cycle as far as office and manufacturing.”

Just 12 miles south of Terrell in the city of Kaufman, city leaders are also preparing for an influx of development. Stewart McGregor, executive director of the Kaufman EDC, said he expects the city’s population of around 8,000 to double in the next seven to 10 years. There are 2,000 housing units under construction in Kaufman now, and the local school district anticipates its enrollment to grow by 3,000 students in the next five years.

“For the longest time, Kaufman County was kind of a sleeping giant in the Dallas area,” McGregor said. “That’s all changed. Land prices have driven a lot of the development coming out this way.”

Developers can find land in Kaufman that is less expensive than in the urban core but still within a 25-30 minute drive from Downtown Dallas, McGregor said. Similarly, families who are looking for a bigger house with relatively easy access to city amenities can find properties that fit their budget in Kaufman. According to Realtor.com, the median list price of a home in Kaufman was about $300K in March, compared to $525K in Dallas. 

As the seat of Kaufman County, much of Kaufman’s employment is made up of government jobs, McGregor said. The city is also home to Texas Health Presbyterian Hospital, which has catalyzed the creation of a healthcare industry in Kaufman. But McGregor said his strategy to set the city up for long-term success is to provide jobs for future residents by building upon Kaufman’s commercial and industrial base. One major mixed-use project, called South Pointe, is scheduled to break ground this summer. The development will include a 195K SF indoor sports complex as well as retail, townhomes, multifamily and other commercial uses.

“As much as we love to see new residential communities come in, we have to balance that out with industrial and commercial,” he said. “We just cannot be a community of all rooftops; we have to have job opportunities for residents who live out in this area.”

Kaufman has a significant daytime population, which has spurred retail development to accommodate workers. A Walmart opened in 2014, and a handful of major restaurant chains have entered the market in recent years. The city is also home to several major manufacturing and distribution facilities, McGregor said.

“I think a lot of what these developers and companies have found as they come out here is that they are not only tapping into a workforce base coming out of the Dallas area, but they’re also tapping into some of the rural communities to our south,” he said. “There’s not as much of a war for talent as there is in the major Dallas area.”

Kaufman currently has 27 commercial or industrial properties on the market ranging between 6 and 200 acres. McGregor said he believes food and beverage manufacturing and distribution will be an emerging industry for Kaufman because of its centralized location between farming communities in East Texas and the urban core of Dallas.

“We’re close to where you can get the raw materials from the farms, but we are also close enough to 8 million people in the Dallas-Fort Worth Metroplex,” he said. “It really makes logistical sense to put a facility like that somewhere around here.”

Kaufman and Terrell still have room to grow. Both cities have sizable extraterritorial jurisdictions that could be absorbed into city limits if officials are able to reach agreements with the landowners. A 2017 state law made involuntary annexation illegal in Texas. That has stymied growth in burgeoning cities, but both Dunlap and McGregor said they can use the quarter-cent sales tax levy that funds the EDC to pay for incentives.

“That’s definitely a conversation we’re always willing to have with any sort of prospects looking out this way that are a good match for our community,” McGregor said. 

As leaders of growing communities, both Dunlap and McGregor recognize the importance of setting their cities up for long-term economic success. Investing in infrastructure and jobs, having high standards for development, offering diverse housing options and providing amenities that improve the quality of life for residents are essential pieces of the puzzle, they said.

“When you get to the position that we are in, you don’t ever get complacent and you don’t get cocky,” Dunlap said.