Officials to meet today with PGA Tour
Web Posted: 12/02/2004 10:23 PM CST
Rebeca Rodriguez
Express-News Political Writer
Local government and business leaders are meeting with PGA Tour officials today in Florida to hammer out details for a potential world-class Tournament Players Club golf course in Northern Bexar County.

PGA packs up its clubs             
                                                                                  City of San Antonio Scores a Triple Bogey

Web Posted: 05/29/2004 12:00 AM CDT

Greg Jefferson
Express-News Staff Writer

With controversy flaring anew, the Professional Golfers' Association of America pulled out of a planned golf mecca in North Bexar County that has been at the heart of a three-year public battle over water quality and economic development, the project's developer announced late Friday.

Supporters mourned the loss of jobs and tourism dollars that the 2,600-acre PGA Village golf development was expected to generate. For opponents, the PGA's departure marked a milestone in the campaign to protect the city's sole source of drinking water.

The Florida-based PGA terminated a letter of intent with Lumbermen's Investment Corp. to build a golf resort in the Edwards Aquifer recharge zone.

"We are disappointed that the PGA has decided not to continue with the project in San Antonio," John Pierret of Lumbermen's said. The development, he said, "would have been a tremendous asset to San Antonio."

PGA officials didn't return phone calls Friday seeking comment.

"Nobody won today," said Councilman Julián Castro, a longstanding critic of the project. "But I'm glad this division is behind us."

Yet anger over the project's handling since 2001 continued bubbling over after the announcement.

Councilman Carroll Schubert, a staunch PGA Village supporter, called the news a major blow to the Alamo City's development as a golf destination, and he blamed the pullout on environmental and community activists.

"I think it's directly related to a small group of no-growth people," Schubert said. PGA's "attitude has always been that they want to be welcomed with opened arms. They're just not going to participate in something as controversial as this."

A coalition of activists, called Clean Water, Clean Democracy, recently charged the city's non-annexation agreement with Lumbermen's was illegal. The coalition alleged city staffers failed to disclose major contract changes and missed deadlines.

Amy Kastely, a legal adviser to the group, said the PGA's decision didn't come down to Clean Water, Clean Democracy's actions alone.

"We didn't cause this," Kastely said. "PGA was aware from the very beginning that we want to protect our drinking water."

Meanwhile, County Commissioner Lyle Larson, whose precinct includes the site, blamed city leaders for fumbling what he called "a great economic opportunity."

"The city — some in the leadership — did everything they could to deter this," Larson said.

He singled out Mayor Ed Garza as not providing enough leadership, and Castro.

Garza couldn't be reached for comment.

Castro, for his part, rejected the notion that the PGA broke with Lumbermen's because of opposition. Instead, he contended, the cause was probably financial.

The PGA and Lumbermen's signed a letter of intent in October giving the developer until Dec. 31, 2003, to find financing for a resort hotel to anchor the project. But Lumbermen's had yet to deliver or announce a deal.

"It's been clear for quite a while that Lumbermen's couldn't find the financing for the hotel," Castro said. "That caused a strain with the PGA."

In a March report to City Manager Terry Brechtel, the company said it continued to meet would-be financiers and "all discussions to date remain positive."

"We did everything humanly possible to sustain this project," Pierret said Friday.

The question next turns to what Lumbermen's plans to do with the property.

With the PGA out of the picture, along with its planned two golf courses and training center, the developer could opt to build homes on the site, a use many believe would have a worse environmental impact than golf courses.

"They had a master-planned community planned for that site from the get-go," said Trish DeBerry, whose public relations firm represents Lumbermen's. "It might be that."

As part of its contract with the city, Lumbermen's agreed to environmental and open space commitments in exchange for the city's pledge not to annex the site for 15 years. With the PGA Village dead, Larson said those safeguards are off the table; in their place will be higher density housing without the same protections.

But without the PGA Village as an anchor, Kastely questions the viability of a housing development on the site. And Castro said it's premature to talk housing because the city has its non-annexation pact with Lumbermen's, possibly giving it some leverage.

The council will hear from City Attorney Andy Martin next week about the contract's status.

This isn't the first time the PGA backed away. The association ended its participation in August 2002 after a successful petition drive that would have forced the council to rescind its deal with Lumbermen's or send it to voters for approval.

City officials soon went to work on a new agreement with Lumbermen's and set aside the petition, prompting a public outcry and a federal lawsuit waged by Kastely.

Tim McCallum, a spokesman for the grass-roots groups Communities Organized for Public Service and Metro Alliance, said the fight over the PGA Village and the council's attempt to get around the public's demand for a vote on the issue created fissures in the community that are still unhealed.

COPS and Metro Alliance dropped their opposition to the non-annexation deal after Lumbermen's committed to paying employees a higher-than-usual living wage.

Now, other cities are expected to battle for the project. Milton Guess, chairman of the San Antonio Area Tourism Council, said Phoenix and Las Vegas probably will be contenders.

"There's going to be a nice competition between the two of them," he said.

gjefferson@express-news.net

Staff Writer William Pack contributed to this report.

PGA Village foes question new law
Web Posted: 05/04/2004 12:00 AM CDT
Nicole Foy
San Antonio Express-News
A bill that made its way through the Texas Legislature largely unnoticed last year now is raising the ire of many who are opposed to the local PGA Village golf resort project.

The new law makes it legal for cities to negotiate development deals with property owners within their extraterritorial jurisdictions - areas located beyond incorporated city limits, but not under the umbrella of city codes or the scrutiny of its citizens.

And because it was written to apply retroactively, the measure essentially would legitimize what the city of San Antonio has been doing for years in its talks with PGA developer Lumbermen's Investment Corp.

Skeptics are asking the question: Did the city know all along that the PGA deal might be on shaky legal ground?
But Jim Campbell, San Antonio's director of external relations, said the city made no connection between the bill and the PGA development slated for North Bexar County.

The new law was sought because it gives municipalities more flexibility in managing their extraterritorial jurisdictions, he said.

"I don't ever recall this having anything to do with the PGA development agreement," Campbell said.
"We saw this as another positive tool - not just for San Antonio, but for cities in general."
Last spring, several months after the City Council approved a non-annexation development agreement with Lumbermen's, two San Antonio city staffers appeared in support of House Bill 1197 in front of a House committee considering it.

Campbell said support was given simply so legislators would know that the statute would be useful to San Antonio in the future.

Rep. Mike Krusee, R-Round Rock, authored the proposal, and lawmaker Jeff Wentworth, R-San Antonio, sponsored it in the Senate.

It was Wentworth who authored SB 1629, which authorized the original Cibolo Canyon Conservation and Improvement District, also known as PGA Village, during the 77th Legislature in 2001.

He did so in concert with San Antonio city officials.
The new law also gives cities a less-expensive option than full-scale annexation to effectively deal with property located near the city limits, Campbell said.

Activists associated with a revived anti-PGA effort said they are suspicious.
They point out that the initiative was not listed in the city's legislative priorities packet.
State Rep. Mike Villarreal is among San Antonio lawmakers who have said they were never briefed on it.
Attorney Amy Kastely, who is advising the loosely organized coalition that called on City Council last week to repeal the PGA deal, questioned the bill's quiet passage and its potential significance to the project.

"I don't think it's a mistake that it directly applies to this deal," Kastely said, adding that she's not too concerned because she doesn't think the law would stand up to a legal challenge.

"Illegal agreements cannot be retroactively validated," she said.
An Austin developer pursuing a project in Dripping Springs first contacted Krusee about authoring the bill, said Wendy Reilly, the lawmaker's chief of staff.

Before its passage, there was no statutory authorization allowing cities to negotiate with property owners within their extraterritorial jurisdictions, she said.

Whether cities that had approved such an agreement - as in the PGA case - before the bill's passage were acting improperly or illegally, Reilly said she did not know.

"I don't know how legitimate it was ... but there was no statutory authority before this," she said. "I don't know if it was illegal, though."

The fact the law would apply retroactively is not uncommon, Reilly said, adding such language is used "all the time" in legislative dealings.

While Wentworth acknowledged the law would apply to San Antonio's agreement with Lumbermen's, he stressed it was not sought for that reason.

The Austin developer who wanted it passed was interested in making the law "as clear as it ought to be" for his development, Wentworth said.

"This was not an under-the- radar sort of thing to slip anything by anybody," he said.
At the request of several members of the council, city staffers are reviewing a packet of documents released last week by the anti-PGA coalition.

nfoy@express-news.net

Group didn't forget about PGA Village
Web Posted: 05/01/2004 12:13 AM CDT
Nicole Foy
San Antonio Express-News
For several months, they met over coffee in living rooms. When they parted, each would take large stacks of documents home to pore over every printed line.

The core group initially contained about a half-dozen people - activists still energized by the groundswell of community opposition a few years ago to the PGA Village development proposed in North Bexar County. Later, its members were joined by community groups and others.

Unwilling to let the issue fade from public view, the group first obtained each version of the voluminous contract between the city and PGA Village developer Lumbermen's Investment Corp.

With the help of a small legal team, the activists then did a side-by-side analysis of each version, hunting for any change - however slight - from the original agreement.

What they found set them on a course that culminated this week in a presentation to a City Council that was largely unfamiliar with the intricate details behind the deal.

It's a key part of the small coalition's overall strategy: appealing to the seven who joined the council after the October 2002 vote approving the development, a group that campaigned on messages of reform and responsibility.

"This is about people's trust, and the new council has to know that," said María Berriozábal, a former city councilwoman and a main leader in the recharged effort.

But others question the group's tactics, saying they are a way of trying to persuade the council to reconsider a legal and done deal. As planned, the resort development, which hinges on a non-annexation deal between the city and Lumbermen's, would bring two hotels, golf courses and residential developments to the land in the Edwards Aquifer recharge zone.

Bill Kaufman, a lawyer for Lumbermen's, wouldn't comment on the coalition's specific claims because he said he had no evidence they were true. But he stressed that the company and the city have a valid contract.

"(The activists) created a media event so the press would cover it," he said.
Over the next few weeks, city leaders plan to study the bulky packet of information the coalition released during Thursday's council meeting.

Each of the newly elected council members has indicated a preference to see a review of the contract.
Councilman Richard Perez said Friday that he hopes the city proceeds cautiously. If there is evidence that staff erred in its handling of the contract, he pledged: "I'll be the first one to whack that thing."

Councilman Chip Haass said he'd like to see a review.
"I hope this project can go through," he said, "but with a very prudent eye from the city."
A briefing would be appropriate, but any reconsideration of the contract is not, stressed Councilman Carroll Schubert, a holdover from the previous council that voted 10-1 in favor of the development.

"I think the issue is settled," he said.
City Manager Terry Brechtel has said she does not want to answer, point by point, the coalition's allegations until the city does a full investigation. And City Attorney Andy Martin said his office had started studying the documentation, but he would not comment until the review was finished.

Activists allege the overall PGA Village contract is invalid because of a missed contract deadline and city staff's failure to present a full report on the deal that was required to finalize the agreement.

According to lawyer Amy Kastely, who's working with the coalition, the development deal between Lumbermen's and the city was authorized only if a final agreement was reached by Dec. 9, 2002.

But terms of the contract continued to be negotiated through spring 2003 without the council's approval, she alleged.
Key provisions in the deal also have been changed without input from the council or the public, she said. The listing of specific hotel employees who would receive a "living wage" of between $8.75 and $10 an hour has been stripped from the agreement, she alleged.

Grass-roots groups Communities Organized for Public Service and Metro Alliance fought for the living wage concession. They also withdrew their opposition to the deal after the living wage issue was settled.

On Friday, Father Walter D'heedene, a COPS leader, said the group was surprised and disheartened to learn of the coalition's allegations that the living wage measure had been changed.

"We do expect the city and Lumbermen's to abide by the agreement they made with us," he said. "If there is any change, our understanding is that would invalidate the contract."

Other key changes the coalition alleges have taken place since the original agreement include new provisions allowing:
Tax abatements for the project from Bexar County.
Lumbermen's to pay for monitoring of pesticide and other chemical runoff from the property only for 15 years, rather than in perpetuity.

The exemption of PGA golf courses from rules limiting water use during drought periods.

nfoy@express-news.net
Staff Writer William Pack contributed to this report

PGA Village in holding pattern

By William Pack  San Antonio Express-News   19 Jan 2004

 The Professional Golfers' Association of America is still interested in completing a golf resort and training center in San Antonio even though financing for the resort's hotel failed to come together by an initial deadline.

That financial package is not complete more than two weeks past the Dec. 31 deadline the PGA set when it signed a letter of intent to complete and operate two golf courses and a golf training center at the PGA Village development in Northeast Bexar County.

But a spokeswoman for the association said Friday that it was staying in touch with the resort's developer, Lumbermen's Investment Corp., and understood that discussions about the hotel were progressing with Marriott International.

The PGA has not rescinded the letter of intent to participate in the development and will not make a final decision on its involvement until the details of the hotel are finalized, the spokeswoman said.

"We're still interested, and we expect an update on the hotel when these discussions are complete," she said.

The hotel is a critical component of the controversial development, which will bring condos, homes and businesses to a hilly, 2,600-acre tract near the intersection of Evans and Bulverde roads, along with what is touted as a premier golf destination.

City Council approved a non-annexation deal for the resort in October 2002 after more than a year of angry debate over the impact that the resort would have on water quality in the Edwards Aquifer, the city's primary source of drinking water.

A depressed travel industry has kept Lumbermen's from completing a financial package for what it hoped would be the first of two hotels at the resort.

The PGA, which operates only one other golf complex like the one planned in San Antonio, had pulled out of the deal once because an initial development plan was so divisive. It agreed to get involved again when the non-annexation agreement was developed.

Jim Awtrey, CEO of the PGA, has said it must re-examine the economics of the project when the hotel proposal is complete, but has expressed optimism that it will be successful.

Lumbermen's, which has until December 2007 under its agreement with the city to get the resort up and running, expected to have the hotel deal finalized by now.

Trish DeBerry, whose firm is handling public relations for Lumbermen's, said the developer feels "very positive" about the status of negotiations with hotel investors but was not ready to say when a deal would be in place.

"It's like a complicated puzzle," DeBerry said. "It needs fine-tuning until everything is in place, and that takes time."

wpack@express-news.net

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PGA's drive hits fairway

 By Greg Jefferson  Express-News Staff Writer   11/16/2003

 Last year's many fights over the proposed PGA Village golf resort often overlooked this point: Money to build a swanky hotel — the project's centerpiece — wasn't there.

The Sept. 11, 2001, attacks sowed panic and uncertainty. Travelers responded by staying home. And as potential hotel investors watched the tourism industry suffer, they closed their wallets — which bedeviled Lumbermen's Investment Corp. as it looked to clinch the PGA Village's development.

But experts say the money is returning as the economy recovers and hotel occupancy rates climb. And they say that probably puts the PGA Village closer to realization than it's ever been.

"I'm hearing from people who haven't done any (hotel) deals in two years," said John Keeling, senior vice president of Houston-based PKF Consulting. "It's just started in the last month — less than a month, actually. There's an awful lot of capital looking for projects. The problem right now is finding quality projects."

The PGA Village, Keeling said, is one of those projects. And while many investors want to put their money in existing hotel properties, he predicts this development will find backers soon.

The resort hotel would anchor the development's two golf courses, built and operated by the PGA, and a training center. Houses and apartments would border the golf courses.

Jim Awtrey, CEO of Professional Golfers' Association of America, said last week that the PGA had renewed its commitment to develop the 2,600-acre project with Lumbermen's. The caveat: Lumbermen's, the master developer, has until year's end to secure a deal for the first of possibly several hotels.

Meanwhile, the city agreed not to annex the property for 15 years, if the hotel is running by December 2007. If it's not, the city can terminate the deal — which otherwise is expected to save developers and landowners an estimated $44 million in taxes.

The year-old pact came after the city abandoned a plan to let developers fund public improvements with more than $50 million in tax revenue. Raucous debates about development over the Edwards Aquifer and "living wages" punctuated the process.

That also hobbled attempts to win financing, said William Kaufman, Dallas-based Lumbermen's "No one was willing to spend millions of dollars on design work when there was all this uncertainty with the city," he said.

Lumbermen's now is trying to nail down an agreement with Washington-based Marriott International to own and operate the hotel, which under earlier plans was expected to cost as much as $135 million to build. Marriott is looking to secure the financing.

If it succeeds, forecasts have the resort opening in spring 2006.

John Pierret, executive vice president of Lumbermen's, referred questions about the hotel's financing prospects to Marriott. But he noted that "in general, the economy is stronger, the stock market is up, and (hotel) bed tax collections are up. All of those are positive signs."

A Marriott spokesman declined to comment except to say Marriott continues working with PGA and Lumbermen's.

The hotel will have at least 500 rooms, but the final count could go as high as 700.

"I think it needs to be as least 500 rooms to go toe-to-toe with Westin La Cantera and Hyatt Regency Hill Country," Keeling said.

The economy has not been kind to those properties. Both resorts saw revenue fall 7 percent from mid-2002 to mid-2003, according to Source Strategies Inc., a local hotel consulting firm.

Lumbermen's master plan calls for building a Ritz-Carlton hotel or another luxury property in the second phase, followed by a 70- or 80-room boutique hotel.

When the PGA Village is fully developed, Keeling contends, San Antonio will be much closer to the ranks of major golf destinations such as Scottsdale, Ariz.; and Palm Springs, Calif.

Hotel consultants say the PGA name and the steadiness of San Antonio's hotel industry will help in developing PGA Village.

"None of the resorts we've looked at have had an organization this big behind it," said Source Strategies Vice President Todd Walker. "The PGA is the drawing card. Without it, I don't see it working."

Meanwhile, San Antonio showed its resiliency during the slump that followed 9-11. Alamo City hotels, posting a 67 percent occupancy rate and $89 average room rate, outdid their Dallas and Houston rivals in 2002, PKF Consulting said.

Houston recorded an occupancy rate of 64 percent and room rate of $89, while Dallas had 53 percent and $100.

San Antonio's hotel industry, Walker said, has been Texas' most stable over the past five years.

"We're not seeing the horrors that San Francisco or New York are seeing as far as tourism," said Henry Feldman, chairman of the San Antonio Convention & Visitors Commission.

"The better projects, the projects with the stability of San Antonio, will happen," Feldman said. "You're not dealing with just anywhere in the country — you're dealing with San Antonio, and I think that's a huge plus as far as investors."

 gjefferson@express-news.net

S.A. now closer to getting the PGA

 By William Pack  San Antonio Express-News

Foundering in uncertainty for more than a year, a controversial golf resort in northern Bexar County moved a step closer to reality Tuesday with a renewed commitment by the Professional Golfers' Association of America to be part of the deal.

Jim Awtrey, the chief executive officer for the PGA, announced the organization has signed a letter of intent with the project's developer, Lumbermen's Investment Corp., to complete and operate two golf courses and a golf training center in the PGA Village development.

"We've always been optimistic that this is going to come together," Awtrey said on the eve of the PGA's 87th annual meeting, which will be held in San Antonio through Friday. "We have been pleased with the progress that Lumbermen's has made on behalf of this project and will continue our work to make this project a reality."

The letter of intent, signed by the PGA last Friday, isn't a final commitment to take part in the resort project, which would be the association's only training center outside Florida.

Awtrey said Lumbermen's still has to finalize a construction deal for the first of possibly two hotels at the site, and the PGA must conduct studies for a second time showing the business environment is right for the project.

But the letter of intent does constitute the PGA's official declaration that it intends to be part of a development that at one time was expected to be worth $1.3 billion once all the planned homes, condos and businesses were up and running.

Lumbermen's has been given until the end of the year to line up financing on the hotel.

Awtrey said the association would need 30 days after that to study the economics of the deal, meaning a final agreement on the project could be ready for consideration early in 2004. That agreement would need to be approved by the PGA's board of directors.

John Pierret, Lumbermen's executive vice president, said he is working hard to complete a financing plan on the hotel and is "85 percent" certain that will be concluded by the middle of December at the latest.

The hotel, which is expected to be operated by Marriott, initially was expected to have 500 rooms, but that could go up to 700, Pierret said. He agreed that with a letter of intent from the PGA, he now can focus all his attention on the financing plan, improving its chances of being completed.

Pierret said the current timetable forecasts opening of the resort in spring 2006.

News of Tuesday's deal generated conflicting responses from City Council members and community interests, reflecting the continuing discord that has surrounded the project since it was proposed more than two years ago.

Mayor Ed Garza said he was pleased to hear the PGA had signed a letter of intent because that should help Lumbermen's complete financing on the hotel component.

Both he and Councilman Carroll Schubert praised the environmental controls built into the development agreement as the strongest that are available in the Edwards Aquifer recharge zone and a model for how future development in that sensitive area should proceed.

Three new council members — Roger O. Flores, Joel Williams and Patti Radle — however, said they opposed the PGA deal before they were elected and remain concerned about development in the recharge zone, which supplies groundwater to the aquifer, the city's primary source of drinking water.

Seven new council members were elected in May, seven months after the council approved an assistance package for the project in which the city agreed not to annex the property for 15 years. That will provide tax savings to developers and property owners.

María Berriozábal, who was a member of two of the staunchest opponents of the resort — the Smart Growth Coalition and Save Our Aquifer — said the new council members were elected largely because the public felt the old council ignored its demands to kill the resort.

She said the project has energized the environmental community, which she hopes will result in smarter decisions about what will be built in the recharge zone in the future.

The 2,600-acre development sparked heated debate because of the potential hazard it poses to the recharge zone.

Even though the resort would not be as densely developed as a residential subdivision, the project raised concerns with environmentalists because of potential contamination from runoff from herbicides and pesticides that would be used to treat the golf courses.

Lumbermen's, which owns the property where the resort would be built, agreed to implement additional runoff controls at the site and to pay the San Antonio Water System $100,000 a year to monitor water quality.

Developers also agreed to seek commitments from the PGA and the hotel operator for "living wage" salaries of $8.75 an hour for its lowest-paid workers, which satisfied the objections some had about a public subsidy going to an exclusive development.

Activist organizations Communities Organized for Public Service and the Metro Alliance lobbied hard for the wage concessions. Tim McCallum, representing both those groups, said they welcome the PGA to San Antonio, assuming the association honors the agreements made about wages and environmental controls.

In August 2002, the PGA pulled out of an initial development deal proposed by the city after a citizens petition placed the project in jeopardy. The PGA then was wooed by other cities, and Awtrey said some of those offers remain a possibility if the local project falls apart.

But he said the association is excited about the opportunities that exist for golf and its membership in San Antonio.

Local tourism and golf officials agree.

San Antonio already is home to 41 golf courses, but PGA Village will help the city lure golfers accustomed to high-end venues, said Marco Barros, executive director of the San Antonio Area Tourism Council.

Tony Piazzi, chief executive for Golf San Antonio, said many out-of-towners drawn to the PGA resort also will visit the city's other courses.

wpack@express-news.net

Staff Writer Greg Jefferson contributed to this report. 11/12/2003

Roddy Stinson, San Antonio Express-New Columnist:   11/09/2003

GREAT news, San Antonio, PGA Village pact imminent

Good news, San Antonio!

No, better than that.

GREAT news.

Negotiations between Lumbermen's Investment Corp. and the Florida-based Professional Golfers Association of America have progressed swimmingly, and an important announcement about the long-awaited development of the PGA Village resort and residential community in northern Bexar County is imminent.

Sources close to the deal say that a draft agreement between Lumbermen's and the PGA will be signed this week and serve as a highlight of the 87th PGA Annual Meeting, to be held here Nov. 12-14.

The agreement — in the form of a "letter of intent" — is a critical first step toward Lumbermen's objective of developing a world-class golf resort that will attract thousands of visitors, create hundreds of jobs and annually bring millions of dollars in economic impact to the San Antonio area.

Under the pact, the PGA will design, build and operate two "championship quality" golf courses and a 50-acre "learning center" that will be the envy of communities across the nation.

(Marvy aside: The first course will be designed by Pete Dye, one of the world's top golf course architects. Golf Magazine says, "When it comes to creating golf courses, the man is an artist and a genius.")

Another crucial development step — draft agreements on construction and management of a five-story, 500-room resort hotel on the Lumbermen's — is expected to follow the PGA announcement, possibly within days.

(The choice of Marriott International to manage the hotel was announced months ago, but the identify of the hotel-owner group has never been revealed, and I was unable to obtain that information.)

"We had to get a tentative draft agreement with the PGA first," one source privy to the negotiations said. "Then we can do the hotel (draft agreement). After that, we will finalize the golf deal ... then finalize the hotel deal."

Asked if anything could stop the development after the draft agreement with the PGA is signed, the source indicated that only "another severe blow to the tourism industry (such as 9-11)" could seriously delay the project.

Assuming the absence of such a disaster, here is the timeline of the 2,800-acre development:

Summer 2004:

— Completion of three subdivisions and 250 houses, ranging in price from $180,000 to $400,000.

— Groundbreakings for the construction of the golf courses, the learning center and the hotel.

Spring 2006:

— Completion of Phase I construction.

Depending on the success of the initial development, Phase II (featuring a second resort hotel and additional housing) and Phase III (featuring a "boutique" hotel and condos) could follow as early as 2009.

"If we do a good job and the city does a good job, it will be a spectacular place," the source said. "We're still a ways from getting it all completed, but ultimately this will be a great project for San Antonio and the whole area. I'm proud of the way everyone persevered."

Perseverance was required in spades during the long, loud and sometimes rancorous community debate over whether the city should provide tax incentives for the development, which will be built over the Edwards Aquifer recharge zone. (Eventually, the city agreed not to annex and tax the development for 15 years.)

Thanks to the resolve of Lumbermen's officials, City Hall leaders, the San Antonio business community and thousands of average citizens who supported the project, it appears that the jobs-generating, economy-boosting development will soon be a reality.

(Marvy aside II: During interviews for this column, I learned that PGA of America is a major backer and financial supporter of First Tee, a program designed to provide young people of all backgrounds opportunities to develop through golf and character education.

"The PGA will work with the parks department and golf pros to come up with programs for the city and surrounding counties that will get kids from all economic groups involved in the game," one source assured me, then added in an understatement:

"That could be one of the best things that comes from this project.")

The latest on the PGA in San Antonio

Hotel plan isn't chip shot for PGA Village courtesy San Antonio Business Journal
Developers hope project financing is lined up soon                                                                       July 2003
by W. Scott Bailey

San Antonio Business Journal  http://dc.bizjournals.com
     After years of delays, controversies and compromises, developers of a planned PGA Village in Northern Bexar County say they are inching closer to finally breaking ground. But significant sand traps still stand in the way of the 2,800-acre development that, if built, promises to put the Alamo City on par with other major golf destinations.
     One of those is the need to secure $125 million in private financing for an anchor hotel that would be operated by Marriott -- which officials say is essential to the deal.
     Lumbermen's Investment Corp. (LIC) owns the land where the PGA Village would be built. Plans call for a 500-room Marriott Hotel, at least two PGA-sanctioned 18-hole golf courses and more than 2,000 homes.
LIC officials believe all the parties involved remain on course and that ground could be broken as soon as early next year. That would mean the PGA Village could open in early 2006.
     There are still possible deal-breakers, however. Topping the list is financing for the hotel. From coast to coast, developers have struggled to find money for their respective hotel projects in a post-Sept. 11 economy where room revenues and occupancies have fallen along with convention bookings. "Financing is very complicated," explains Marriott spokesman Matt Carroll. "These are challenging times. But we have made significant progress on the
project."
     Project officials say the PGA won't sign on without the hotel. And any additional lengthy delays could push a completion date dangerously close to a 2007 deadline.  Under its agreement with the city of San Antonio, LIC must deliver a
completed hotel and two golf courses by October 2007 or the city's agreement to not annex the property expires.
     The non-annexation agreement is essential, as LIC's representative Bill Kaufman says it is basically all developers were left with in the way of incentives after failing to get approval for a special tax district that would have helped fund the project.
In addition to the $125 million price tag for the hotel, Kaufman says the golf courses will cost $25 million to $29 million.
He says those figures do not include the roughly $20 million worth of real estate that LIC is donating to Marriott and the PGA or another $10 million in road construction and other improvements necessary to get visitors to the site.
     LIC is working now with officials from Marriott and the PGA to hammer out development agreements so that construction can begin. Neither Marriott nor the PGA, according to Kaufman, will commit to the project without the other guaranteeing their participation. Kaufman says that places the project at a "chicken and egg" crossroads.  "The hotel isn't coming without the PGA Village. And PGA Village isn't coming without the hotel," says Kaufman. "They're both looking to each other to see who will go first."
     Kaufman, a noted local attorney and tough lobbyist, says because of the construction timeline, the hotel needs to break ground first. He says Marriott has identified some partners who are interested in financing the hotel. He also believes the PGA remains excited about the project. "I think they're ready," says Kaufman about the players involved in ongoing negotiations. "But we still need a signed deal. People don't agree to spend this kind of money casually."  "Hopefully, it will all come together," says LIC Executive Vice President John Pierret. "The difficult part is the financing for the hotel. It's tough. You have to have something unique to make it work, to get the financing."  He believes the combination of San Antonio, Marriott and the PGA represents a uniqueness by which potential financiers will ultimately be captivated enough to make a deal.
Delayed reaction
The possibility of further delays exists. LIC and the other parties involved need only look back at how this proposed project has progressed to be reminded of that. Pierret says LIC began discussing a proposed San Antonio PGA Village back in August of 1999. Originally, the developer was seeking the ability to create a special taxing district to help fund the privately financed development. But talks about such incentives, as well as environmental issues, led to a mobilization of some dissenters who threatened to kill off the project by forcing a public vote on the plans. The delay erupting from that opposition was further complicated by a shift in leadership at City Hall, according to Pierret. He says it took developers well over half a year just to get their first meeting with Mayor Ed Garza about the project.
     "We were left out there to get beat up on," contends Kaufman. Why did it take Garza so long to meet with LIC about the proposed PGA Village? "I have no idea," Pierret responds. Asked the same question, Kaufman says, "No comment. " Then he adds, "At the end, he did get behind it." Garza was not available for comment at press time.
     Bexar County Judge Nelson Wolff has been credited with helping to keep the project alive. "He's been very vocal, letting people know how important this is for the city," explains Kaufman. "He has really embraced this." But the delays have been costly. Kaufman says they may have sealed the fate of a Ritz Carlton hotel that could have been part of the development.
"They were very interested at one time," he says. Remaining hurdles The delays have also cost developers precious time.
"Because of the controversies," says Pierret, "(Marriott and the PGA) were not willing to spend any time negotiating to make this happen. They felt it would be a waste of time and money." Despite the costly delays, LIC officials are confident the PGA Village will get built. Kaufman says developers hope all the appropriate agreements are signed off on in the next few months.
Developers say it will take up to two years to build the anchor hotel and roughly 18 months to construct the two golf courses.
"We need to have these agreements inked by the end of this year," says Pierret. "We've tried to move this thing along. We feel like we're finally getting there." Getting there has been anything but easy. "It's been like a Rubik's Cube," says Pierret. "You get all the greens lined up and the yellows are out of whack. You get the yellows lined up and the reds are out of order. It's been a real challenge and it has taken a lot of patience."  He adds, "We have really reasonable people involved who all know what they want and need and have been willing to work to get it done. The hard part is tying down all the variables that you have with four groups trying to get what they all need worked out. "Things are progressing. We're working hard on this and we're getting closer to the next phase of the marathon."
     PGA officials were unavailable for comment. But Marriott's Carroll says confidence in the project is building. "It's certainly moved beyond where it was," he says about the planned project. "You go through the process and hope you get to the end."
If that doesn't happen? "We can put a lot of houses out there," Pierret explains. Kaufman says if the PGA Village does not happen, LIC can put an estimated 9,000 residential units on the 2,800 acres, meaning the drop in the amount of green space would be as dramatic as the rise in the density of homes. "The right thing to do environmentally and for San Antonio is to put the PGA out there. We still intend for that to happen," says Pierret. He does say LIC learned a lesson in all of this. "In retrospect, if we had walked in and said five cities were vying for the PGA Village and San Antonio was one of them, it would have taken a different course. We should have done it like Toyota. They packaged it perfectly. Instead, we've lost all that time and no one ended up with what they could have had. None of this is as good as it would have been."

PGA foes back out of lawsuit Courtesy of the San Antonio Express-News

By Maro Robbins - San Antonio Express-News 03/07/2003

Saying it ran out of money but not resolve, an environmental group abandoned its courtroom fight against plans to develop a resort atop a precious stretch of the city's underground water source.

Save Our Aquifer lacked the funds to continue its 9-month-old federal lawsuit, the coalition of environmentalists and other critics of the resort said in a motion approved Thursday by U.S. District Judge Fred Biery.

The decision dismantled a potential roadblock for the project in North Bexar County, which last year stoked months of fierce public debate over economic incentives and environmental protection.

But, in closing one battlefront, Save Our Aquifer members said they would devote themselves to others, including a letter-writing campaign aimed at the resort's potential sponsor, the Professional Golfers' Association.

"We feel we can accomplish our goals without this lawsuit," said Joleen Garcia, a Save Our Aquifer executive committee member.

Other options under discussion include raising funds to file a state lawsuit that would use different arguments to seek the same remedy as that sought in the federal case: A public vote on the economic incentives offered by city officials to the resort's developers, Lumbermen's Investment Corp.

Lawyers for the city and other observers cast Save Our Aquifer's decision to jettison the lawsuit as a graceful way of backing away from a confrontation that likely would have ended with its defeat.

They said the group's loss was foreshadowed three months ago when the judge refused to order the city to hold an election on the PGA Village proposal.

Among other ways in which Save Our Aquifer's claims fell short, Biery said, was that the group could not show it was likely to win at trial.

Mayor Ed Garza said he was pleased that Save Our Aquifer's decision would save taxpayers from having to fund the city's defense of the lawsuit.

Meanwhile, officials said the federal lawsuit has not stymied the resort plan from going forward.

Lumbermen's lobbyist Bill Kaufman said negotiations between the developer and PGA are occurring on a weekly basis.

A PGA spokeswoman added that her organization remains interested "if a deal can be worked out with Lumbermen's."

Save Our Aquifer leaves behind part of the lawsuit that has consequences for city policy, but not the resort plan.

The League of United Latin American Citizens, District 15, is still pressing a claim that, initially filed alongside Save Our Aquifer, spilled out of last year's petition drive against the PGA project.

LULAC has argued that city officials inappropriately disqualified petition signatures, particularly Hispanics, who wanted the city's support for the project put to a public vote.

The lawsuit demands that the city improve its procedures for reviewing petitions and then submit the revisions for approval by the Justice Department.

No hearing date has been set for LULAC's claim.

mrobbins@express-news.net

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