EDINBURG -- The Shoppes at Rio Grande Valley is set to undergo a significant expansion as Phase II of the shopping center gets underway next month, the Edinburg Economic Development Corporation (EDC) announced early this week.

Historic highs in retail activity, coupled with increased retail construction activity earlier this year, are driving new business to town, according to EDC officials. A planned 90,000-square-foot expansion to the Shoppes is set for construction in mid-May, and will include at least 12 to 13 new stores in the area directly west of JC Penney.

Currently, Petco, Anna's Linens, General Nutrition, and a new McDonalds have finalized lease contracts in the upcoming facility, according to the EDC.

"What happens is, retailers don't make decisions based on local conditions but instead decisions based on national conditions," said EDC Executive Director Pedro Salazar. "Conditions have been right for additional retail expansion for awhile. This is a signal saying, nationally, retailers are more confident willing to expand in a sensible market. For the last two years, they weren't expanding period. It's not just an indicator of things locally, but rather nationally."

The current expansion is Phase II out of IV for the only master planned retail shopping center in the Valley, according to Salazar.

Located on the northwest corner of U.S. 281 and Trenton Road, groundbreaking for the Shoppes originally took place in Aug. 2007, with a forecasted 1.1 million square feet of retail, entertainment and hotel space upon completion.

"The positive thing is that there is activity there," Salazar said. "There is incredible potential and the fact that they are getting started, and signing leases is a great indicator that activity is coming. Things are back on track."

Touting "historic highs" in retail sales activity for the first few months of the year, Edinburg's retail economy generated $1.3 million in local sales taxes in Jan. 2011, more than double what it produced over the same period in 2010, according to the EDC.

Commercial construction activity in the city, which for the first two months of 2011 were more than double the level set during the same period last year from almost $19.6 million through February 2010 to almost $41 million through February 2011.

December sales tax collection was the highest single month of sales tax collection in the city's history, $1.7 million, according to the EDC.

"When you have jobs and activity and growth in sales tax. Those are all things they use to sell the shopping center. Building it is one thing, but anyone can build a shopping center. You still have to fill it," Salazar said. "It's a combination of things coming together, and I think it's a good sign for the Shoppes, for retail in Edinburg and the city is a whole."