This study focuses on the social construction of abstract space in the city of Mercedes (Uruguay), which implies social relations of production, representations of space, and spatial practices and their physical manifestations. Through elements of Lefebvre’s triad (1991), this study explores spatial changes and challenges of Mercedes related to the development of industrial agriculture, and the growth of informal settlements. Secondary data and resulting analytical maps are utilized to understand recent changes produced in the urban-rural space of Mercedes. Informal conversations with local and national government staff discussed regional and local plans and policies. Interactions between plans, policies, and foreign investments related to industrial agriculture and social mobility have transformed public spaces and existing neighborhoods. Despite economic growth, the social-spatial fragmentation has increased between the inner city and the periphery and/or informal settlements.