Little Hotel on the Prairie

Should Austin Put Development on 'Underutilized' Parkland?

Prairie Grass : a 400-acre site on city parkland : is the proposed tract for a 250-room hotel and corporate conference center surrounded by a golf course.
Developers envision proposed subdivisions nearby, such as Heritage Crossing, would meet a range of housing needs for employees of high-tech companies like Applied Materials, Samsung, Motorola, and, further north, Dell Computer Corp.
Prairie Grass : a 400-acre site on city parkland : is the proposed tract for a 250-room hotel and corporate conference center surrounded by a golf course. Developers envision proposed subdivisions nearby, such as Heritage Crossing, would meet a range of housing needs for employees of high-tech companies like Applied Materials, Samsung, Motorola, and, further north, Dell Computer Corp.

Around the Central Texas landscape, where there is water, there is power. Electric power, that is. Because the Hill Country needed electricity, among other reasons, we have the Highland Lakes. Because the Holly Power Plant needed a cooling pond, we have Town Lake. And because the Decker Power Plant likewise needed a bathtub, we have Decker Lake, now Lake Walter E. Long. But despite their utilitarian beginnings, our lakes have caught the fancy of Austinites who are eager to throw lots of money into view homes and sports boats to enjoy them. Except for Lake Long, lying way out there in persistently unfashionable eastern Travis County, visited by few and loved by fewer. But that may change.

A local developer, two out-of-town partners, and their powerful allies and advisors envision Lake Long as the home of a first-class golf resort and conference center, a Lakeway or Barton Creek of the east. But the land they desire for their Prairie Grass project is dedicated city of Austin parkland. But it's land that's been undeveloped and, indeed, fenced off for 30 years. But the Parks and Recreation Department has, for all that time, wanted to build its own public and low-cost golf course there. But the city has never rounded up the money to do that. But ...

What's a city to do? Presumably, what its citizens want, and if Prairie Grass is to go forward you'll have your chance to voice your choice, since a vote of the people is required to "alienate" dedicated parkland for other uses. Even though most Austinites couldn't give you directions to Lake Walter E. Long, we tend to view parkland as sacred until proven otherwise. Should Prairie Grass be viewed as a clear exception, or as the beginning of a trend to convert "underutilized" parkland to private luxury and, maybe, a return on the public's dollar?

If that were the only question, the city would probably have already told the Prairie Grass team to go find another prairie. But there's another question: What will it take to make the Desired Development Zone desirable? Do we need development engines like Prairie Grass, or do we need a destination park like Lake Long? We know we don't need vacant land fenced off for 30 years, so now that this has become an issue, we'll likely see something happen on the shores of Lake Long, be it Prairie Grass or something else. What at first seemed like a simple developer pipe dream may turn out to be Smart Growth in the test tube.


Blueprint for Luxury

The prairie in question is a 400-acre parcel on the northeast corner of Lake Long, just north of the dam that forms the lake and connecting to FM 973. The lead developer, Pierre Gagne of New York, is proposing a 250-room hotel (tentatively a Marriott Renaissance) with restaurant, lounge, corporate conference center, and the usual first-class amenities, located right on the lakeshore and equipped with boat docks and the like.

Surrounding this would be two golf courses, at least one of which would be designed by Jack Nicklaus, who has already worked with Gagne on his current buzz project, a golf resort at Ferry Point Park in the Bronx, the site of a former landfill. Gagne and his partners, San Francisco investor Mark Levy and Austinite Larry Beard, would invest $65 million in this deal, on top of the $1 million a year they propose to pay the city to lease the Lake Long property for 99 years, and on top of Prairie Grass property and sales tax bills, which Gagne and company propose the city could use to build additional public courses at the site. (The total revenue to the city, from both lease payments and tax revenue, would be $4.6million a year, the developers estimate.)

The land has been city property since 1969, and for almost that whole time the Parks and Recreation Dept. has contemplated using it for a golf course. The Prairie Grass project was spawned when the University of Texas eyed the Lake Long site as the potential new home of its golf programs; it was UT that first got the attention of Beard, who actually lives out by Lake Long, and it was Beard who connected with Gagne. "But UT decided not to go forward with the deal," says lawyer Jay Hailey of Locke Liddell and Sapp, who's working with the developers, "because they wanted exclusive use of the property, without the course being available to the public." After UT bailed, Beard and Gagne hooked up with Levy and decided to press forward on their own.

Aerial view of the 400-acre hotel site on the northeast corner of Lake Walter E. Long …
Aerial view of the 400-acre hotel site on the northeast corner of Lake Walter E. Long …

According to Hailey, Beard is developing a subdivision, Heritage Crossing, just east of the Prairie Grass site -- one of three in-the-pipeline housing developments bordering the city's Lake Long land. So, despite what the few of you who've actually been to Lake Long and did not find luxury there might be thinking, this Prairie Grass gig just might work. "What's propelled this project along are the other things the city has done with Smart Growth," Hailey says. "When it converged with ideas about Desired Development Zone and infrastructure, it got propelled into the public realm. It's not just a golf course anymore; it's a catalyst for development in the area."

To wit: Right now, eastern Travis County, far more than East Austin itself, is the very bottom end of the local real-estate market. Without some sort of stimulus project, Beard and other landowners in the area have no real reason to change that, and though growth in the area is inevitable as Austin bursts its buttons, the current market would put in vast fields of mobile homes and very little else. "What this project will do is maybe to uplift the quality of housing -- not to make it all high-end, but to make a more balanced set of housing opportunities at all levels," says veteran public-relations consultant Howard Falkenberg, representing the Prairie Grass team. "And it [can] change the way people think about the area; with coming roadway infrastructure and the access to the airport, it will change its cachet."

That "coming roadway infrastructure" includes the long-awaited, long-debated State Highway 130, which in either of its two possible routes would run right by Prairie Grass, and would link the incipient golf-course community around Lake Long to major employers both north and south. Indeed, Gagne's prospectus describes Prairie Grass as a "catalyst for attracting major employers to the area."

"For companies like Applied Materials, or Samsung, or Motorola, that have facilities in the area, [the city] wants a housing mix that reflects the employment base of those companies -- where everyone from an assembly-line worker to the CEO could find a house and live and work in the same area," says Hailey. "If this project doesn't go in there, what you'd see instead is more of what exists today. And we need very low-end housing, but we don't need it all in this one place."


From Fast Track to Screeching Halt

When the Prairie Grass deal first popped into public view about six weeks ago, it was on a fast track, so that the City Council could vote on March 9 (its last scheduled meeting before the March 22 ballot cutoff date) on whether to put the proposal before the voters in May. But the nearly irresistible project crashed into the nearly immovable force of Council Member Beverly Griffith, and what the council instead adopted on March 9 was a resolution directing city staff to do a more detailed analysis of the project. (Punting the Prairie Grass vote, if there indeed is one, onto a later ballot in August or November was supposedly a deal-killer, but Hailey and Falkenberg say their team is comfortable with the council's chosen course of action.)

Griffith's concerns about the deal are many, but basically boil down to three. One is the question of precedent -- in the words of a talking-points memo prepared by her office, "We should be careful that our actions do not trigger a raft of developer bidding on various underutilized parks around the city." Griffith notes that back in 1969, "the city thought it was so important to have those parcels for conservation and public recreation that they actually condemned the land and moved people off."

The "conservation" part refers to the existence of actual prairie remnants around Lake Long, though it's not clear how much real prairie grass lies within the Prairie Grass boundaries. "You really don't want to put this on the prairie, which is a unique and special ecosystem," notes Griffith. While prairie remnants are not protected by federal law the way, say, wetlands are, they've become an emerging enviro cause, and even the Prairie Grass prospectus discusses "preserving the adjacent hardwood forests and prairie grasses" at the site. (It also talks about linking the project to a citywide greenbelt system.)

Another of Griffith's concerns is that commercial development would foreclose options for public use in the future. She has often pointed to Zilker Park, where land was acquired and dedicated years before it was developed as a real "park," to support her program of investing in land -- such as the "destination parks" funded by the 1998 bond package, not all that far from Lake Long -- for the Zilkers of tomorrow. "The golf course would be compatible, but [we] need to look at why this particular land was chosen for parkland, and what's the long-range plan for it? If you had commercial use of it, you would forever forgo those plans. And development will get there at some point."

And Griffith's third, and perhaps biggest, worry is that the Prairie Grass deal might not be such a good one for the city. What city staff is now preparing, in response to the council resolution, is an "all-funds analysis" -- i.e., how much it would cost the city to build roads, provide water and wastewater service, relocate the high-tension Austin Energy lines that cross the property, and so on, and thus whether it would really make money from Prairie Grass. "Not to do our due diligence would be a dereliction of our duty, because protecting the assets that our taxpayers have invested in through the years is extremely important in terms of our responsibility," Griffith says. "We don't want to make a long-range mistake with the taxpayers' assets."

… and a view of the lakeshore from the proposed hotel site.
… and a view of the lakeshore from the proposed hotel site.

Though supposedly all minds on the council are still open, Griffith sounds like she's pretty much ruled out supporting the Prairie Grass proposal as it currently exists. "These parcels aren't ones we want to turn over to commercial development, because of the reasons they were chosen," she says. "But there is private land that adjoins this land, and certainly a public golf course" -- i.e., not a Golden Bear luxury spread -- "could be an appropriate use.

"There's private land very close to the lake," Griffith continues, "and if the all-funds analysis comes out positive, then the commercial part of the development could be on private land. And then you wouldn't have to pass a referendum and hold a campaign, which would be a money-saving angle for the developer. Because convincing our voters to give up [parkland] could be very hard, expensive, and unnecessary. And if commercial development on the parkland would spur economic development, the same development one foot away will provide the same benefit."

Were there not a fence around this land right now, Griffith's reservations would likely be shared by enough of her colleagues to put Prairie Grass out to pasture indefinitely. But two seats away from Griffith on the dais sits Willie Lewis, who is up for re-election and is not shy about calling the city on its 30 years of hemming, hawing, and neglecting East Austin infrastructure.

"If you're talking about Zilker or Town Lake, it's a different story," he says. "I don't think we should take any land that's being actively used by Austin citizens. But if the parkland has a fence around it, and nobody's used it for 31 years, then what good is it? Is it really parkland? Right now, we're in the process of purchasing another couple of thousand acres [in East Austin] for parkland, and are we going to let them sit for 31 years as well?"


Precedent Already Set

It should be noted that the precedent Griffith and others fear has arguably already been set. Gagne's Ferry Point project in New York is one of many examples of public/private parkland development nationwide, and Austin has not completely eschewed the practice. The Travis County Exposition and Heritage Center, home to the Ice Bats -- a for-profit enterprise -- and the newly christened Star of Texas Rodeo, was built on Lake Long parkland leased to the county in 1983. Two years thereafter, the city leased another chunk to the Austin Aqua Festival, which, if it ever comes back from its current hiatus, is supposed to relocate permanently from Auditorium Shores to the Lake Long site.

"It is telling ... that perhaps the only two examples of this type of arrangement in the city of Austin involve Lake Walter E. Long," notes the Prairie Grass prospectus. "The two previous leases ... were intended to attract attention and stimulate additional public use of the park" -- attention and use that the city conceded Lake Long sorely needs. (Another example in Austin, of course, is the ARTS/Center Stage project to convert Palmer Auditorium, which sits on dedicated parkland, into the Long Center for the Performing Arts, which required, and got, voter approval in 1998.)

Says Lewis, "When you get right down to it, from either an economic or an ethical standpoint, the city hasn't really done what they should have done with the land since they acquired it. We're in the second or third boom since we've owned that land; it's not like the city hasn't ever had the money, or couldn't pass a bond, to do something there. They could have. But they chose not to. Which means we should be open to other options. If not now, when?"

Having said this, though, Lewis isn't as convinced of Prairie Grass's virtues as Griffith seems to be of its shortcomings. "I'm not sure it's what people want, and we won't know until we ask them" by putting it on the ballot, he says. "I'm not so much set on using the city's park property for projects with private partners. But if I'm re-elected, if this project doesn't go through, one of my priorities will be to make sure the city gets some funds, from someplace, to do something useful with this land, rather than let it sit for another few decades."

Indeed, on the more visceral level at which many Austinites are likely to oppose Prairie Grass -- as gentrification in excelsis -- Lewis seems to agree with the progressive line. "A lot of what would make this project work depends on where they put SH 130," he says. "I think SH 130 will end up putting people of color between two major divides, in the space between far West Austin and far East Austin. If they can keep Lake Long out of the area where people of color are" -- by building SH 130 west of the lake, which the city officially opposes -- "it'll be easier to develop the land there the way they've done at Lake Austin and Lake Travis, with the hotel, the luxury golf courses, the other amenities.

"But I think [Prairie Grass] is better than another solid waste dump or maintenance facility -- the things that nobody else wants -- in East Austin," Lewis continues. "Now we have somebody proposing to build something that some people want, and that might bring people to East Austin, and we're hearing that it can't be built on city land. We let CSC and ARTS/Center Stage use city land, and CSC [will be] on land that [the city] hadn't used for 30 years, either. But this project isn't getting the same support from the council. So I think we should just put it out there and let the citizens decide if this is what we, as a city, want. But if at least some of us on the council didn't think this was a good idea, we wouldn't be talking about it at all." end story

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KEYWORDS FOR THIS STORY

Prairie Grass, hotel, parkland, Beverly Griffith, Willie Lewis, SH 130, Jay Hailey, City Council, Lake Walter E. Long, CSC, East Austin

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