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Lumbermen's Investment Corp. and Marriott International Inc. Advance
 Plans with San Antonio  to Develop a 1,000-room Hotel
 and Two 18-hole Golf Courses 

By Elizabeth Allen, San Antonio Express-News
Knight Ridder/Tribune Business News

Aug. 12, 2005 - Lumbermen's Investment Corp. and Marriott International Inc. have made it official, just in time for Bexar County to move ahead in creating the taxing district they want for a golf resort in the northern part of the county.

The land developer and the hotelier sent county officials a certificate late Thursday afternoon guaranteeing the two groups have entered into a formal agreement to develop a 1,000-room hotel, two 18-hole golf courses and a golf learning center in partnership with PGA Tour Inc.

"It's going to be significant in terms of tax returns to the school district, the county, the college district and the hospital district," said Bexar County Judge Nelson Wolff.

The certificate, which says county officials can review a complete copy of the agreement to confirm the promise, was signed by John Pierret, Lumbermen's executive vice president, and Stephen Joyce, Marriott vice president.

"Obviously, this is a giant step forward as far as the project is concerned," Pierret said, adding that the timing of the agreement allows construction on the northern Bexar County resort and golf courses to begin early next year. The developer already has begun building the residential part of the project.

The special taxing district for the proposed resort, which has drawn fire because it lies over the sensitive Edwards Aquifer Recharge Zone, would have a seven-member, county-appointed board.

The board could assess taxes, including hotel taxes, on resort residents and guests. It could issue bonds for public improvements, such as water and drainage projects.

The revenues also would help pay for building the golf courses and marketing the resort.

The petition proposes a tax of 57.8 cents per $100 valuation, a sales and use tax of 2 cents per taxable sale and a 9 percent hotel tax for the 2,847-acre tract.

The 2,847-acre district was made possible by an agreement that Lumbermen's struck with the city, in which the city agreed not to annex the property for 29 years, thereby giving up its taxes during that time.

The county wouldn't forego its property taxes, but instead anticipates collecting tens of millions more in revenues that it otherwise would lose.

While developers had estimated the project's value at about $800 million, that estimate has grown to $1 billion as developers upgraded their hotel plans.

A clause in the agreement allowed Lumbermen's to ask the county for the taxing district, but the county had to take it to the Legislature, and fought a bruising late-session campaign to pass the controversial bill. Environmentalists opposed it, as well as earlier Lumbermen's attempts to develop a golf resort, because of its location over the recharge zone.

But without the resort, Lumbermen's has threatened the fallback option of dense residential development, covering up more of the recharge zone than a resort would.

County officials still are hoping Lumbermen's will pitch in, along with other developers in the areas, to help pay for road upgrades that will handle growing traffic on Bulverde and other area roads.

Pierret took issue with the county's contention that a PGA Tour resort would increase traffic in the area.

"We're actually reducing traffic and water consumption," Pierret said. That is, "compared to our development strategy that we have grandfathered rights to do," which could mean building as many as 9,000 houses and apartments.

Developers and the county have been trying to find the sweet spot of timing for their different interests: for Wolff, it's important that the election part of the district's creation process go on November's fairly limited ballot, and before that can happen, the county must accept the petition and hold a public hearing.

But Wolff also insisted on seeing a real agreement between the two entities before putting their petition on next week's Commissioners Court agenda, so all parties have been working late in recent days to nail down details.

In its agreement with the city, Lumbermen's promised to have a hotel completed by 2009, and lots of details go into the planning of that, said Pierret. In fact, the whole complex agreement is something of a Rubik's Cube, with one change effecting many others and slowing the process down. Even planting grass, Pierret said, needs to be done in the spring, and that's affected by the timing of the district.


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