Sailing Without Anchors

It's been more than two months since Bee Cave officials signed a controversial deal with the developers of a large-scale shopping center project, but peace has hardly returned to the valley in this semi-rural community.

Sailing Without Anchors
Illustration By Doug Potter

It's been more than two months since Bee Cave officials signed a controversial deal with the developers of a large-scale shopping center project, but peace has hardly returned to the valley in this semi-rural community. If anything, the prospects of more growth -- and mounting opposition to it -- seem to have only intensified. Area residents and the Save Our Springs Alliance have stepped up their campaigns against the Hill Country Galleria, a $250 million project planned on 114 acres in the Barton Springs Watershed. So far, they're claiming success in their efforts to dissuade prospective anchor tenants from signing on with the mall.

Bee Cave officials are dangling a $30 million carrot as an incentive to developer Chris Milam and partner Lincoln Property Co. to create a mall with upscale anchor tenants. Milam will benefit from the $30 million over 20 years if he can lock in at least two tony department stores from a specific list of five: Neiman Marcus, Saks Fifth Avenue, Lord & Taylor, Bloomingdale's, and Macy's. The village council will kick in an extra $5 million if Milam can nail a Neiman Marcus, which has yet to lay stylish stakes in Austin despite its deep Texas roots.

In an optimistic e-mail response to the Chronicle, Milam said he is almost a year ahead of schedule in locking in prospective tenants and has letters of intent from two unspecified national department stores. He also expects to obtain two more "intendeds" by the end of the year, he says. Meanwhile, officials at most of the sought-after stores would not comment on their future plans. Only Saks spokeswoman Julia Bentley made it clear: "We have no plans to go to that mall." But at least two mall opponents say well-placed officials at four of the five stores personally told them they would not be locating in the Galleria. One opponent received an e-mail reply from Saks chairman and CEO Brad Martin, who assured the writer that Saks wouldn't be coming. "It is not necessary for me to receive more e-mails on this," Martin added.

Mall detractors are cheered by the responses they've received from stores, but one pro-Galleria source pooh-poohed their enthusiasm. Anchor tenants face these kinds of campaigns all the time, he said. "They are not about to let a write-in or e-mail campaign sway their opinion on where to invest hundreds of millions of dollars ... Wal-Mart is opposed on every site they do."

Bee Cave officials have made it clear to Milam that they don't want big-box retailers on the property, which lies at the confluence of three key roadways -- State Highway 71, RM 620, and RM 2244, or Bee Caves Road. Yet, if by 2004 Milam concedes he can't make the Galleria happen, the land could revert to landowner Robert Baldwin, who had originally sought to put a Wal-Mart on the site -- a matter that turned litigious when the village council objected to the plans. Baldwin agreed to drop a lawsuit against the village if its leaders approved the Galleria deal.

Even with Bee Cave's blessing, there's still no guarantee that the Galleria will fly. Plenty of folks doubt that a mall -- at least the kind Milam has in mind -- will reach fruition in such a tiny community. While the location along major roadways may be ideally suited for retail, some observers note, a 1.35 million square-foot mall could be out of reach, since major department stores generally enter more populous markets. As one local broker observed, tongue in cheek: "All somebody would have to do is take an aerial photo of the rooftops out there and send it off to Neiman with a message that says, 'What, are you kidding me?'"

Milam is undeterred by skeptics. Rather, he is looking to snap up as much surrounding property as he can, and has his eye on some prime residential and commercial property across Highway 71. The partially developed land, called Spanish Oaks, is owned by Daniel Porter, with several pieces of the 1,000-plus acreage owned by Cypress Realty. Milam says he doesn't have a contract on the property, "and could not make a guess as to whether or when that may occur." Cypress President Steve Clark said he has discussed the property with Milam, "but he's not the only fellow who has approached us about the land." In general, Clark added, "now is not a good time to sell real estate in Austin."

Milam doesn't deny his hunger to control large chunks of Bee Cave property, but he insists his reasons are magnanimous. "We have a big stake in Bee Cave, and we don't want adjacent properties developed in a parasitic way. In business, everything good comes from growth -- but it must be planned and managed. The more of the surrounding properties we control, the more able we are to do just that."

One area resident and mall opponent says she doesn't relish the idea of a single developer wanting to own so much of Bee Cave. "This has gone from a nightmare to a bad horror flick," she said. Meanwhile, SOS is encouraging its members to e-mail the executives at Saks, Neiman Marcus, and other "intendeds" to express opposition to the Galleria project.

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