A Friendswood-based developer is unveiling plans for a $1 billion project that could transform 200 acres of rural land in Magnolia into one of the largest mixed-use developments the small city has ever seen.
Tannos Development Group has spent the past two years laying the groundwork for a project called Magnolia Town Center, which could eventually encompass 1 million square feet of residential, multifamily, retail, office, medical and hospitality space.
“This is the first product of its kind in Magnolia… it’s the largest and most well-organized of its kind. It’s going to give the city something it’s never had before,” said Louis Tannos, president of Tannos Development.
Magnolia has just 5,800 residents, but its population has exploded in recent years due to an influx of retirees and Houstonians seeking a quieter lifestyle, Rachel Steele, executive director of Magnolia Economic Development Corp., a division of the City of Magnolia, said. Between 2020 and 2024, the city’s population grew by 147%, according to estimates based on data from the Texas Demographic Center. Steele said she wouldn’t be surprised if the population doubles again within the next five years.
Magnolia's meteoric growth has strained the city's water resources, forcing the city to impose a building moratorium in December 2022. The moratorium has been extended multiple times, most recently in April, but is set to end in August.
The project is planned just west of Highway 249, near the intersection of FM 1488 and Buddy Riley Boulevard. The land is owned by Tannos and its partner, Arizona-based Maritia LP, according to Montgomery County appraisal records.
Expected to break ground in early 2026, Magnolia Town Center could transform mostly undeveloped and agricultural land into a mixed-use district with a walkable, outdoor shopping mall akin to Market Street in The Woodlands. Tannos said the entire development could be built out within a five-year time period. However, a lot will depend on how quickly third-party developers move.
“This project is transformational, it really is,” Steele said. “When you really look at the whole scope … they're not just bringing in one thing, they're addressing multiple needs the community has been asking for.”
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While the city’s rural charm has attracted new residents, the lack of amenities, entertainment options and professionals services has been a common complaint, Steele said.
Plans for Magnolia Town Center
Although the project still needs formal city approvals and permitting, the initial plans for Magnolia Town Center include: • 250,000 square feet of retail space • 200,000 square feet of medical and office space • A nationally branded hotel • A 350-unit apartment complex • A convention center capable of hosting up to 1,500 people • 185 single-family home lots • A senior living development • Parking garages and new roads • 32 acres of parks, trails, green space and lakes
While much of the project is self-financed, the developer is seeking to strike an agreement with the city of Magnolia to be reimbursed over time for the cost of building public infrastructure, including roads, water, sewage and adding utilities at the site. That could be achieved through two public finance tools– a Tax Increment Reinvestment Zone (TIRZ) and a Public Improvement District (PID) – that would need formal approval from the city. Those tools would allow the city to avoid issuing any bonds or going into debt, Steele said.
Construction won’t begin until Tannos and the city finalize a development agreement outlining infrastructure responsibilities, zoning, phasing, design expectations and financing terms. The project would also have to move through the normal permitting process.
The site comes with challenges. About half the land lies in a floodplain, requiring developers to dig up more than 1.2 million cubic yards of soil to create manmade lakes that will serve as both drainage infrastructure and recreational amenities. The excavated dirt will then be redistributed to elevate the rest of the property above the floodplain, said Tyler Munson, a civil engineer with Berger Munson Engineers working on the project.
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Meanwhile, Tannos said he has already secured $52 million worth of land sales under letters of intent with prospective buyers, including a homebuilder, multifamily developer, bank and hotel group. In total, he hopes to sell roughly $90 million worth of land to third-party developers who would construct their own buildings.
“Magnolia has long been (overlooked),” Tannos said. “It feels country, so people pass it up. But I didn’t — because I see what’s coming.”
May 18, 2025
Senior Real Estate Reporter
Marissa Luck is a senior real estate reporter at Houston Chronicle. She can be reached at [email protected].
Previously, Luck covered commercial real estate in Texas for CoStar News; real estate for Austin Business Journal; energy for Houston Chronicle; and business news for The Daily News in Longview, Wash. She’s won awards from Society of Professional Journalists and National Association of Real Estate Editors, and her byline has appeared in numerous publications nationally. Originally from Hawaii, Luck grew up in the Pacific Northwest and studied international political economy at The Evergreen State College in Olympia, Wash. She now lives in Midtown Houston.