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HSB: Historical Accounts & Thoughts on Its Future Growth. 8) HSB’s NEW MOMENTUM – Part 2: 9/7/06. 12) RELOOKING AT THE SEDONA-HSB COMPARISON: 10/5/06. 14) CRUDE OIL PRICE WATCH: 12/14/06. 16) BASED ON FORTUNE’S FINDINGS, HSB AIN’T SEEN NOTHING YET! 12/28/06. 17) LOOKING BACK TO 1/1/86: HSB Ranked with America’s Most Elite. 1/4/07. 18) WHY HSB’s SETTING IS ESPECIALLY SPECIAL: A Perfect Collection of Extraordinary 19) ESCONDIDO: A MAGNIFICENT ADDITION TO HSB! 1/18/07. 20) OIL PRICES DROP BELOW $50 PER BARREL. What’s Up? 1/25/07. 22) HSB FACTS EVERYONE SHOULD KNOW - (Part 1). 3/22/07. 23) HSB FACTS EVERYONE SHOULD KNOW - (Part 2). 3/29/07. 24) WON’T YOU HE’P ME? – 5/3/07. 25) HSB RESORT SIGNS #1 PICK: G. Michael Thomas. 5/10-07. 26) MARBLE FALLS’ MAIN STREET – from lemon to Lemonade! 5/17/07. 7) HSB’s NEW MOMETUM – Part 1. Last week, we paused to reflect. We stopped to look in detail at Lake LBJ, America’s largest constant-level lake, HSB’s most irreplaceable and therefore most important asset. We examined why it and the Resort compliment one another so wonderfully, creating a one-of-a-kind combination that makes HSB truly unmatchable. The prior week, we reviewed HSB’s 1996 to 2006 rebound from the pain of the depression that prevailed in HSB and everywhere else in the oil-patch during the 1986-1996 decade. We also observed that Doug Jaffe Jr. acquired the Resort from Norman Hurd in 1996. With the new hotel space taking shape for all to see, and with Marriott lined up, Wayne Hurd fed off these great leads. He showed Brady Oman, Escondido’s General Partner, how HSB was on its way back and sold him his Dillon Ranch property in May of 2004. The Marriott and Escondido projects have proved the most important of the $2+ billion of commitments announced for the area HSB area since the stock market crash began in March of 2000. In September, 2004, four months after Wayne brought in Escondido, Doug followed up by injecting HSB with additional new life. He brought in Centex Destination Properties, Centex’s high-end development unit, to build lakefront condominiums in the Yacht Club area. And that’s how HSB has accumulated its new momentum, one new project feeding off an earlier one - to the betterment of all. Let’s now pick up where we left off when we paused last week to review the importance of Lake LBJ. With this additional background, we can examine HSB’s new momentum from a more informed basis. As impossible as it may seem, considering HSB’s unimaginable rise during the 1971 through 1985 period, we find that HSB’s current momentum may exceed anything in its past. Of course, with the wind of what now amounts to a strong, decade-long rebound at HSB’s back, and with all of the national exposure HSB has been getting, today’s momentum may not be too surprising. When the Hurds were getting HSB up and running in 1971, they began from a standing, where’s HSB start. Whereas the momentum of that earlier period was almost entirely self-generated by the Hurds, Jaffe’s move to bring in nationally known big hitters like the Marriott and Centex has put HSB squarely on the Resort world’s map. The effort has borne fruit. Amenity usage is on the increase. Yet those who might think the Resort’s amenities and facilities could be overwhelmed with a In that regard, the Resort has several exciting projects in the making, involving a lot of renovation and new construction designed to enhance HSB’s appeal and accommodate more members. The Resort and the City are currently working closely together on all this. Preliminary plans will be announced soon. We’ll get into all this in later discussions. HSB’s other developer, indefatigable Wayne Hurd, has continued active in his usual behind the scenes manner. He remains ably assisted by Sam Tarbet, another HSB institution who has helped Wayne accomplish his business plan for the past 30+ years. Wayne was similarly instrumental in making Lago Escondido possible, again holding the key acreage in inventory for the likes of Oman. Lago Escondido will occupy the 28-acre Granite Rock located on Lake LBJ just upstream from Applehead Island. It will be Escondido’s sister development, with Lago’s lot owners entitled with all rights to Escondido’s amenities. During the previous 12 months, between September 2004 and September 2005, only 205 interior lots sold for $100,000 or less. Of these, 10% went for between $40,001 and $100,000, 15% for between $15,001 and $40,000, 10% for between $10,001 and $15,000, and 65% for less than $10,000. Furthermore, before NRP’s arrival, more than 100 interior lots were listed for sale for less than $6,000, most of which were mobile home lots and some of which could be bought for as little as $1,000. Today, there are not only none available for less than $6,000, there are actually none available for less than $10,000. NRP is far and away largely responsible for this seven-fold increase in sales of interior lots and the accompanying sizeable increase in their prices. In turn, NRP has been highly successful with its reselling program, which began this past April 28th. Since then, it has been closing sales at the average rate of $1,000,000 per week. NRP flies in prospects from around the country at its expense for a quick look see, and has been closing with about 2/3rds of those that came to look. Likewise, Centex has been highly successful with its high-rise project. Although it did not acquire its multi-family lakefront holdings until last September 19th, and although its national marketing campaign has accordingly been short lived, it is off to a tremendous start. Centex plans to build 340 lakeside condominiums, plus a new 101-marina. It has already pre-sold about a 1/3rd of these, Centex’s Phase 1, which will be completed by year end. Construction on Phase 2 will start in the next six weeks. As one might guess, the Resort has plans for a huge upgrade of its amenities in this core area. Although the success of NRP and Centex is phenomenal, the success of Escondido is out-of-this-world. Remember, Escondido didn’t buy the Dillon Ranch from Wayne until May, 2004. Here we are a mere 27 months later and Escondido has its Tom Fazio Signature golf course already opened for play and the development’s Grand Opening is set for this coming November 11th. It also has all of its streets, sewer and water in, save for its Phase 4. This Phase 4, where Escondido’s last 40 Estate lots are located, will be completed this fall. There are 350 total lots in Escondido – 223 Estate lots, 65 Casita lots and 62 Villa lots. It has sold about 150 of the 223 Estate lots, meaning it has sold about 82% of the 183 currently available. The forty Phase 4 Estate lots are not yet on the market. It has also sold all but five of its 62 Villa lots. The 65 Casita lots will not be sold as undeveloped lots and therefore are also not on the market. They will be packaged with a Casita and sell for $1,000,000 or so. Work on the first package of Casitas began late last month. Escondido has been getting up to $675,000 for Estate lots on the golf course and up to $1,000,000 for those on its waterfront. Its golf course lots, which are bigger than those on the Resort’s three courses, are going for three to five times more. Lago Escondido, the 27-acre “granite knob” located off Apache Tears immediately upstream from Applehead Island is also doing well. It has 38 lots, 25 located on the lake and 13 lake view lots. Twelve of the lakefront lots are already under contract - for an average price of $1,720,000. Lago’s lot owners will have full membership privileges at Escondido, which means Escondido will end up with about 400 full members. Another important HSB development is The Trails of Lake LBJ, under the leadership of Mike Walsh and his Lavaca Financial Corp. Its Phase 1 contains 53 Estate lots and 21 Villa lots. Lots in Phases 2 and 3 are currently held in inventory. Eight of its Phase 1 lots are at water’s edge and another six to eight will be available in Phase 3. The development features huge green belts and has several miles of separate hiking and horseback riding trails. The Trails continues HSB’s long tradition whereby its many subdivisions all seem to offer something different and unique. And lastly, the Marriott is performing on schedule. Occupancy is averaging 60 or so percent in just its second season. In this manner, HSB’s has rebuilt its appeal, which is being promoted far and wide across the country. The message is being well received. For the first time in HSB’s history, America is learning what HSB and the surrounding Hill Country have to offer. For example, Business Week and Southern Living magazines, along with The New York Times, have featured HSB nationally this summer. America likes what it is learning. HSB’s favorable national reception and an ever-strengthening Texas economy led by a vibrant oil industry foreshadow a bright future. For all of the many reasons enumerated, professional investors are in HSB and surrounding territory today like never before - and they’re here with several times more investment dollars. Next week, we’ll continuing examining the $2+ billion of new commitments made to the HSB area since March, 2000. 8) HSB’s NEW MOMETUM - Part 2. Last week, we saw how important Marriott and the Resort’s new Hotel and Conference Center have been to HSB’s renewal. We also observed how Doug Jaffe capitalized on that improvement. It enabled him to bring in Centex’s high-end development group to build 340 lakeside condos in HSB Proper. And we learned Wayne Hurd remains a very active player. Like Jaffe, he too was able to capitalize on Marriott and the new hotel/conference facilities by bringing in Brady Oman, who took the undeveloped Dillon Ranch to the highest possible level with his Escondido and its Tom Fazio Signature Course. Wayne capitalized on that by convincing Oman to take on the undeveloped 27-acre Granite Knob, off Apache Tears just upstream from Applehead Island, believing it had huge up-side potential. Oman paid around $12.75 million – $472,000 per acre - for the block of granite. But don’t think for a second that Oman got duped, as many of us lesser visionaries might think. He ain’t making tombstones! It was another win-win deal, as you’ll see later, several paragraphs below. Noting HSB’s potential and how it was picking up renewed strength, National Recreational Properties of Irvine, California came to town, checked us out, and committed $30 million dollars to purchase 1,400 undeveloped off-water HSB lots. Wayne Hurd was once again involved in the process, selling NRP his inventory of some 200+ undeveloped lots. Now, picking up where we left off, let’s begin by interjecting here that there are 10,630 lots (parcels) within HSB’s city limits. Remember, both Escondido and The Trails are inside HSB’s newly incorporated city limits. The City of HSB reports that only about 3,300, or 31%, of the 10,630 lots are developed. The 10,630 lots fall within five principal categories: 1) Golf Course lots, of which there are about 1,530; 2) Lakefront lots, of which there are about 817; 3) Interior lots, of which there are about 7,439, 4) Mobile Home Lots, of which there are 818, and 5) Bay Country’s five to 10 acre lots, of which there are 26. The 817 waterfront lots are split up into five subdivisions, as follows: HSB Proper = 447; HSB West = 303; Escondido = 25; Lago Escondido = 22; and The Trails = 20. The Trails has 20 waterfront lots, all located on the Sandy Creek arm. It is sold out and no re-sales are available. Its last re-sales went for $338,000. Escondido has sold 17 of its 22 waterfront lots, all located on the Pecan Creek arm, for an average of $725,000. Lago Escondido, which didn’t put its 22 lakefront lots on the market until this Memorial Day weekend, has sold 12 for an average price of $1,680,000. Only one of HSB Proper’s 447 lakefront lots is available, a resale priced at $995,000. Seven of HSB West’s 303 lots are available as re-sales, priced at an average of $1,072,000 per lot. In summary, only 23 of HSB’s 817 lakefront are available for sale. That is a tight market, which explains the sharply escalating prices for undeveloped HSB lakefront lots, faced as they are with such strong demand! However, there are another 35 or so that remain undeveloped. But, these are held for future development by various spec home builders. Collectively, all but about 58 of HSB’s 817 lakefront lots, being 93%, are developed. Let’s look now at where HSB’s homes are located. Using gas meter hook-ups as a measure, about 35% of HSB’s homes are located on HSB’s lakefront. This grouping of homes, totaling 932, includes single family, townhouses and condos. The definition of interior lots as used herein is exceptionally broad. It ranges from valuable hillside lots with a view of the lake and/or distant horizon, which are in relatively short supply. From this high-end, the definition drops down in value to include a variety of lots with no distant views, most of which remain in huge oversupply. For the past 12 months, since September 2005, an estimated 1,700 interior lots have sold or gone under contract in HSB for $100,000 or less. More than half went for less than $15,000; another 35% went for between $15,001 and $40,000. During the prior 12-month period, between September 2004 and September 2005, only 205 interior lots sold for $100,000 or less. Of these, 10% went for between $40,001 and $100,000, 15% for between $15,001 and $40,000, 10% for between $10,001 and $15,000, and 65% for less than $10,000. Furthermore, before NRP arrived, more than 100 interior lots were listed for sale for less than $6,000, most of which were mobile home lots, some of which could be bought for as little as $1,000. Today, there are not only no undeveloped lots available for less than $6,000, there are actually not any available for less than $10,000. NRP is far and away largely responsible for this seven-fold increase in sales of interior lots and the accompanying sizeable increase in their prices. In turn, NRP has been highly successful with its reselling program, which began this past April 28th. Since then, it has been closing sales at the average rate of $1,000,000 per week. NRP advertises nationally throughout the country, has an effective process of checking out those interested in buying a HSB lot, flies in those that qualify at its own expense for a quick look see, and has been closing with about 2/3rds of them. Likewise, Centex has been highly successful with its high-rise project. Although it did not acquire its multi-family lakefront holdings until September 19, 2005, and although its national marketing campaign has accordingly been short lived, it is off to a tremendous start. Centex plans to build 340 lakeside condominiums, plus a new 101-slip marina. It has already pre-sold about a 1/3rd of these units. These units make up Centex’s Phase 1, which will be completed by year end. Construction on Phase 2 will start in October. As one might guess, the Resort has plans for a huge upgrade of its amenities in this core area. Although the success of NRP and Centex is phenomenal, Escondido’s success is out-of-this-world. Remember, Escondido didn’t buy the Dillon Ranch from Wayne until May, 2004. Here we are a mere 27 months later and Escondido has its Tom Fazio Signature golf course open for play and the development’s Grand Opening is set for this coming November 11th. It also has all of its streets, sewer and water in, save for its Phase 4. Phase 4, where Escondido’s last 40 Estate lots are located, will be completed this fall. There are 350 lots in Escondido – 223 Estate lots, 65 Casita lots and 62 Villa lots. As of September 4th, it had sold about 150 of the 223 Estate lots, meaning it‘s sold about 82% of the 183 currently available. The forty Phase 4 Estate lots are not yet on the market. It had also sold all but four of its 62 Villa lots. The 65 Casita lots will not be sold as undeveloped lots. Instead, they will be packaged with a Casita and sold for somewhere between $1,050,000 and $1,250,000. Work on the first 12 Casitas began in late July. Phase 1, consisting of these 12, went on the market Labor Day weekend and five sold – one at the low end and four at the high end. Escondido has been getting up to $675,000 for Estate lots on the golf course and up to $1,000,000 for those on its waterfront. Escondido has 25 waterfront lots, all located along Pecan Creek. Seventeen have sold for an average of $725,000 per lot Its golf course lots, which are bigger than those on the Resort’s three courses, are going for three to five times more than those on Slickrock, Applerock and Ram Rock. Lago Escondido, the 27-acre “granite knob” located off Apache Tears immediately upstream from Applehead Island is also doing well. It has 36 lots, 22 located on the lake and 16 lake view lots. One lake view lot, priced at $810,000, and twelve lakefront lots are already under contract. The lakefront lots have sold for an average of about $1,680,000, with the best lot going for $2,200,000. Lago’s lot owners have full membership privileges at Escondido, which means Escondido will end up with between 475 and 500 members, the far majority of which live elsewhere. Another important HSB development is The Trails of Lake LBJ, under the leadership of Mike Walsh. Its Phase 1 contains 53 Estate lots and 21 Villa lots. Lots in Phases 2 and 3 are currently held in inventory, but a partial release is imminent. The Trails contains sixteen lakefront lots, all located with a far-distant view. The developer sold out all of its waterfront lots relatively quickly. Two of these recently resold for twice their original price. The development features huge green belts with several miles of separate hiking and horseback riding trails. The Trails continues HSB’s long tradition, where its many subdivisions are designed to offer something different and unique. And lastly, the Marriott is performing on schedule. Occupancy is averaging 60 or so percent in just its second season. Jaffe plans for HSB are first class and of the highest order. He is so optimistic about HSB’s future that his long-range plans include another major hotel. Preliminary plans for it are on the drawing board and its future 20-acre location is set aside in Bayplace. In this manner, HSB’s has rebuilt its appeal. It is being promoted far and wide across the country by several different well-respected players in the business. As just outlined, the message is being exceptionally well received. For the first time in HSB’s history, the entire country is learning what HSB, the nearby Highland Lakes, and the surrounding Texas Hill Country offer. For example, Business Week and Southern Living magazines, along with The New York Times, have published favorable features on HSB this summer. HSB’s broad national exposure and decidedly favorable national reception, together with an ever-strengthening Texas economy led by a vibrant oil industry, point to a bright future for our community. For all of the many reasons enumerated herein, HSB is attracting investors today like never before. The investors are proven professionals and they have deep pockets, filled to the brim with record amounts of funds. Next week, we’ll continue examining HSB’s new momentum. We’ll do so taking a closer, more detailed look at the $2+ billion of new commitments made to the immediate HSB area, the HSB triangle, since March, 2000. 9) THE HSB TRIANGLE: $2+ Billion of Planned Growth Since 2000 (Part 1). We’ve been examining HSB’s new momentum for the past two weeks and have seen that it’s been fueled largely by/for seven principal happenings/reasons, as follows: Once the Resort’s hotel and conference center began to take physical shape, once Marriott was signed up to operate it, and once the Escondido deal got done and off to such a great start, HSB was once again on its way. The effort attracted the attention of major players, who found the uniquely unmatchable, one-of-a-kind HSB-Lake LBJ combination especially attractive. They followed the lead, which explains the record activity announced for the immediate HSB area since the stock market crash began in March 2000, amounting to $2+ billion of investments when fully built out. Investors playing the immediate HSB area believe it offers relatively safe, low-risk opportunity with good up-side potential. They are here favoring the local opportunity over what they believe our country’s stock market offers. They see today’s oil prices - apparently destined to stay high, if not go higher - and they think déjà vu. In this sense, HSB’s renewed appeal since March 2000 is indeed tied to déjà vu. The investors chasing HSB today may be to a degree late because today’s 1973-1986 rerun actually began in 1999 – seven years ago. However, the difference between the 1973-86 run and today’s 1999-20?? run is marked. Today’s run is founded on supply-demand factors. The earlier run wasn’t. The prior run was based totally on the Terrorist factor (1973’s Arab Embargo and 1979’s Iranian Revolution, which produced a 10-fold increase in oil prices in just six years. As before, today’s run contains that same Terrorist Factor, but which has been largely unexercised to date. The run up is supported by favorable Supply-Demand factors and by a dollar that is in strong decline, factors which didn’t exist before that indicate today’s run may continue for a much longer period. They feel the momentum and like what they see - the same things the Hurds saw almost 40 years ago: a) a wonderfully attractive area; b) a one-of-a-kind lake; c) a geological paradise; d) an exceptionally appealing laid-back and friendly life style; e) a great location, physically and strategically; f) a low crime rate; g) good people; h) a favorable labor pool, i) great deer hunting ( ;-); and last but not least, j) outstanding prospects for growth. And they like the fact that real pros in the service providing market - Wal-Mart, Home Depot, Walgreen’s, Office Depot, Sutherland’s, Chili’s, Sherwin Williams, Blockbuster and the like – began targeting the area largely around the same point in time, confirming their thinking. They even like knowing we are safe from hurricanes, earthquakes, wildfires and terrorism. Other than the prospects for overbuilding, which is always a problem, they see little downside. The huge commitments made since March 2000 - more than during any comparable period in HSB's 35-year history - speaks volumes about the appeal of the immediate HSB area. One thing is for certain. Whereas most areas practically beg for investment, access to investment dollars is not a problem for HSB. Mayor Lambert, ably assisted by an especially talented, experienced, caring and capable city council, is providing outstanding, well-balanced leadership in this regard, both in recognizing all this and the fact that our community can not thrive without an exceptionally healthy Resort. We all know that what’s coming will not make for a more attractive HSB unless we also preserve our quality of life and friendly, laid-back lifestyle. The council, in office now for ten months, has clearly demonstrated it understands the issues and will act accordingly for the betterment of us all. HSB is currently growing beyond its corporate limits. Although most of the initial, major projects like the Marriott, Escondido, and Centex are within the city limits, most of the incoming growth falls just beyond. The area where HSB-related growth is principally occurring, referred to hereunder as the “immediate HSB area,” encompasses a triangular-shaped area formed by US Highway 281, Texas Highway 71, Sandy Creek, Walnut Creek and the south shore of Lake LBJ, less the Blue Lake - Deer Haven portion. This area is referred to herein as the HSB Triangle. Next week, we’ll look more closely at the $2+ billion of commitments and examine what has been built, begun, planned or proposed since March 2000 within the HSB Triangle. To illustrate the variety of the new projects, which number about 100, they will be categorized under seven headings, as follows: Public Infrastructure, HSB Resort’s Improvements, Major Developments, Basic Services, Medical Facilities, Golf Facilities, and Real Estate Developments. 10) THE HSB TRIANGLE: $2+ Billion of Planned Growth Since 2000 (Part 2). Last week, we began looking closely at forces driving the growth that has been announced since March 2000 for the immediate HSB area. For purposes hereunder, we are calling this area - bounded by Highway 281, Highway 71, the Colorado River, Sandy Creek and Walnut Creek - the HSB Triangle. The investments planned total in the $2+ billion range, once the projects are completely built out. Public Infrastructures: 1) HSB’s new Post Office. 2) HSB West’s one million gallon/day water treatment plant and HSB Proper's four million gallon/day water treatment plant, costing $15,000,000. 3) HSB’s new Fire Station in HSB West. 4) Lake LBJ's Wirtz Dam’s new floodgates and rebuilt foundation. 5) New rerouted entrance to Island Drive. 6) The Resort’s new HSB Boulevard Entrance. 7) HSB POA’s renovation of Quail Point. 8) TxDOT’s 3 to 5 lane widening and guttering of RR 2147 thru HSB. 9) Renovation of Highway 281 Bridge over Colorado River. 10) New Road Connecting RR 2147 with Highway 71 between the Flatrock Springs and Crossroads Medical developments. 11) New Major Entrance to HSB off Highway 71, connecting with RR 2147 at Space Center. 12) Widening RR 2147 from HSB through Cottonwood. 13) Reworking all HSB streets and adding Ribbon Curbs at a cost of approximately $15 million. 14) New Bridge across the Colorado connecting RR 2147 and RR 1431 below Wirtz Dam, costing $7.5 to $10 million. 15) HSB’s enlarged and remodeled City Government Bldg. 16) La Ventana’s new Baptist Church on 22 acres atop the development. Basic Services. 1) Lake LBJ Yacht Club & Marina/Water Park. 2) HSB’s Marketplace on RR 2147. 3) The Village at Bayplace across from the Space Center on RR 2147. 4) Moe's (Cup-Z) Restaurant on 2147. 5) Renovation of Tall Texan Building on 2147. 6) Mini-Storage Project at Highway 71 and RR 2831. 7) Cabinet Shop/Office across from the Mini-Storage. 8) West Oak Plaza on 2147. 9) Bay Pharmacy on 2147. 10) Monster Rides Auto Repair on 2147. 11) New building next to Monster Rides. 12) Taste of Thyme Restaurant on 2147. 13) La Ventura’s on 2147. 14) BGS’ Utility & Golf Carts on 281. 15) Outback Patio Furniture on 281. 16) La Ventana’s 74-suite La Quinta Hotel. 17) West Oak Plaza Office Building off 2147. Golf Facilities. 1) Escondido’s Tom Fazio Signature Course. 2) Flatrock Spring’s Bechtol-Russell Course. 3) Jack Nicklaus Signature Course, to be located at Bayplace, immediately south of the Space Center. 4) The Bruce Devlin Golf Academy, accompanied by a nine-hole Executive Course, both open to the public, located along Highway 71. Real Estate Developments. 1) The Trails of Lake LBJ (Phase 1), 53 lots plus its Clubhouse, Marina and Equestrian Center. 2) La Ventana, a 237-acre, up-scale, “oldworld," multi-purpose development. 3) Escondido – 288 Estate and Villa lots with Clubhouse, Hacienda, Guard House, Comfort Stations, Marina, and perimeter Rock Wall. 4) Centex Destination Property’s 340 lakeside condominiums and 101-slip marina near the Yacht Club. 5) The gated "Villas of Siena Creek," a 50-home community with clubhouse and swimming pool off RR 2147. 6) National Recreational Property’s acquisition of approximately 1,400 interior HSB lots. 7) Thanksgiving Mountain. 8) Applehead Island’s $1,250,000 face lift. 9) $35+ million of spec homes built/remodels led by the likes of Hudson Homes, Mike Kelley, Brad Baccus, David Mitchell, Clifford Grubbs, and Bob Rowan. 10) LBJ Lakefront Inc's $6,250,000 spec home on Matern Island. 11) Matern Island’s improvements: lined w/ 90 large Live Oaks; gated; with newly rebuilt street, sewer and water lines. 12) The 66-acre platted tract with utilities on Hwy 71 just west of Bay Country. 13) National Recreational Properties’ planned resale of its 1,400 interior lots, occurring at the rate of $1,000,000 per week. 14) NRP’s Real Estate Marketing Office. 15) Waterside, a gated community of 26 high-end townhouses located on RR 2147 at Lake Marble Falls, downhill from La Ventana. 16) Escondido’s 60 Casitas, being built by Max Horton. 17) Krumm Ranch, a 416-acre tract located across from Cottonwood, calling for 350 half-acre home sites placed in groupings separated by large green spaces, with the frontage on RR 2147 reserved for commercial and multi-family. 18) Lago Escondido, Lake LBJ’s most high-end development, with 25 lakefront lots priced up to $2.2 million per lot, and 13 view lots. 19) Marley Porter’s Castle Rock (Phase 1) condominium project, featuring 52 condos, 3 - 6 stories tall. 20) Castle Rock’s Phase 2 and 3. 21) New "L"-shaped Strip Mall, anchored by a restaurant, located on RR 2147 immediately east of the Space Center. 22) Terramark Development's 26 high-end condos, located off RR 2147 on Lake Marble Falls, to be priced between $350,000 ad $500,000. 23) Villa Del Lago, a 64-unit condo development located at Rocky Road and RR 2147 on Lake Marble Falls, to be priced up to $300,000. 24) Five new Spec Homes overlooking Lake LBJ from beneath the HSB Chapel. 25) Conversion of Granite-gravel Pit located off RR 2147 just east of Bayplace. 26) HSB’s second most expensive spec home, planned for Applehead Island Lot 61, by Clifford Grubbs. 27) The Grey Horse Group’s acquisition of about 200 interior HSB lots at a cost of about $5,500,000. 28) Grey Horse’s plans to build $300,000 to $500,000 spec homes on its 200 lots. 28) Doug Jaffe Jr.’s plan to build a new home and guest house on the unnamed island immediately north of Matern Island. 29) Hudson Home’s plan to build six lakeside spec homes off Cove East. 30) A 1,617-acre Sam Martin/Armand Biglari development that will occupy all but about 114 acres of the space situated west of HSB Proper that is confined between Hwy 71 and RR 2147. 31) A 6.1 acre, 48-unit, multi-family development to be known as The Enclave at HSB, located near the corner of HSB West Boulevard and RR 2147. To illustrate how conservative the $2+ billion number may prove to be, developers of the adjoining Flatrock Springs and Crossroads Medical projects at the northwest corner of 281 and 71 have calculated the build out of just its two developments, collectively comprising 1,173 acres, will cost $850,000,000. Furthermore, in addition to the projects already announced for our immediate HSB area, fresh faces continue targeting the HSB Triangle, circling, looking for deals. Collectively, these independent parties have another billion dollars to add to $2+ billion worth of investments already announced since March 2000. Also, did you notice that plans currently announced for the HSB Triangle are light on basic services. This may indicate that HSB will continue to be a resort-oriented community dependant on Marble Falls for business-oriented services and the big-boxes. Next week, we’ll continue with a Part 3, regrouping the 100 or so entries into eight different categories, based on their state of completion. 11) THE HSB TRIANGLE: $2+ Billion of Planned Growth Since 2000 (Part 3). Last week, we examined investment commitments made since March 2000 to the HSB Triangle. Remember, for purposes hereunder, the Triangle is defined to include the area encompassed by Highways 281 and 71, Sandy and Walnut Creeks, and the Colorado River. We grouped the $2+ billion of commitments into seven categories based on the nature of the commitment. This week we have regrouped the entries to offer a different perspective, categorizing them based on their state of completion, as set out below. Just Underway. 1) La Ventana’s new Baptist Church on 22 acres atop the development. 2) Escondido’s 60 Casitas, being built by Max Horton. 3) Lago Escondido, Lake LBJ’s most high-end development, with 25 lakefront lots priced up to $2.2 million per lot, and 13 view lots. 4) Waterside, a gated community of 26 high-end townhouses located on RR 2147 at Lake Marble Falls, downhill from La Ventana. Scheduled to Start in One to Six Months. 1) La Ventana’s 74-suite La Quinta Hotel. 2) A 6.1 acre, 48-unit, multi-family development to be known as The Enclave at HSB, located near the corner of HSB West Boulevard and RR 2147. 3) Marley Porter’s Castle Rock (Phase 1) condominium project, featuring 52 condos, 3 - 6 stories tall. 4) HSB’s second most expensive spec home, planned for Applehead Island Lot 61, by Clifford Grubbs. 5) Five new Spec Homes overlooking Lake LBJ from beneath the HSB Chapel. 6) Villa Del Lago, a 64-unit condo development located at Rocky Road and RR 2147 on Lake Marble Falls, to be priced up to $300,000. Scheduled to Start in Six to 12 Months. 1) Renovation of Highway 281 Bridge over Colorado River. 2) Flatrock Springs. 3) Major Shopping Center fronting on Highways 281 and 71 at Flatrock Springs, being developed by the same party that is completing Bee Cave's new Shopping Center. 4) Converting HSB's Airport into a first class Jet Center. 5) Jack Nicklaus Signature Course, to be located at Bayplace, immediately south of the Space Center. 6) Crossroads’ 116-acre Regional Medical Campus at corner of Highways 281 and 71. 7) Lake of the Hills Medical Center and Regional 80-bed Hospital, to be located at Crossroads. 8) A 1,617-acre Sam Martin/Armand Biglari development that will occupy all but about 114 acres of the space situated west of HSB Proper that is confined between Hwy 71 and RR 2147. 9) Jack Nicklaus Signature Course, to be located at Bayplace, immediately south of the Space Center. 10) Terramark Development's 26 high-end condos, located off RR 2147 on Lake Marble Falls, to be priced between $350,000 ad $500,000. 11) Flatrock Spring’s Bechtol-Russell Golf Course. 12) Bob Weed’s plans for commercial development on the RR 2147/Wirtz Dam Road intersection’s northwest corner. Planned. 1) New Road Connecting RR 2147 with Texas Highway 71at Flatrock Springs’ Development. 2) New Major Entrance to HSB off Highway 71, connecting with RR 2147 at Space Center. 3) Marble Falls' Riverwalk Project, located on Lake Marble Falls at Highway 281. 4) Caprock’s renovation and redevelopment. 5) Development of Corridor along HSB Blvd. 6) The new Airport Fly-in Business Park. 7) Renovation of Airport Terminal, additional parking, new access. 8) Renewed attention to HSB’s relatively unique “Hanger-home subdivision.” 9) Widening RR 2147 from HSB through Cottonwood. 10) A 1,617-acre development located between Highway 71 and RR 2147, west of HSB’s city limit. 11) Krumm Ranch, a 416-acre tract located across from Cottonwood, calling for 350 half-acre home sites placed in groupings separated by large green spaces, with the frontage on RR 2147 reserved for commercial and multi-family. 12) The Bruce Devlin Golf Academy, accompanied by a nine-hole Executive Course, both open to the public, located along Highway 71. 13) Grey Horse’s plans to build $300,000 to $500,000 spec homes on its 200 interior HSB lots. 14) Plans to revive the 66-acre platted tract with utilities on Hwy 71 just west of Bay Country. 15) New "L"-shaped Strip Mall, anchored by a restaurant, located on RR 2147 immediately east of the Space Center. 16) Castle Rock’s Phase 2 and 3. Proposed. 1) Reworking all HSB streets and adding Ribbon Curbs at a cost of approximately $15 million. 2) New Bridge across the Colorado connecting RR 2147 and RR 1431 below Wirtz Dam, costing $7.5 to $10 million. 3) HSB’s Marketplace on RR 2147. 4) The Village at Bayplace across from the Space Center on RR 2147. 5) Doug Jaffe Jr.’s plan to build a new home and guest house on the unnamed island immediately north of Matern Island. 6) Thanksgiving Mountain. 7) Hudson Home’s plan to build six lakeside spec homes off Cove East. 8) Conversion of Glen Salem’s granite-gravel Pit located off RR 2147 just east of Bayplace. 12) RELOOKING AT THE SEDONA-HSB COMPARISON. When we started this series, we picked Sedona to represent charming American artistic centers the likes of Jackson Hole; Santa Fe; Scottsdale; and Carmel, California. We wanted to promote thought and laid out the captioned question (SEDONA + H2O = HSB in 2020?) to challenge you as we reviewed HSB’s beginning, where it has been and where it might be going. We were motivated to do so largely by the thinking of Marley Porter, the nationally recognized architect who moved here in 2002. He came here because he identified with the wonderful vision Norman and Wayne Hurd had for HSB. He saw what they had seen, that HSB, complemented as it is by Marble Falls, had the potential to be so uniquely special that it could rank among the most attractive places to live and play in the nation. Since coming here, he has become involved with many of the area’s best projects – La Ventana, Marble Falls’ Riverwalk, Waterford, and Siena Creek. A graduate of Arizona State University, Marley had spent the first twenty years of his career working Tempe, Pheonix, Scottsdale, Mesa, Sedona and Santa Fe. Much of his work was in Sedona, where he did a downtown redevelopment plan for the city in the 1970s and followed by designing three of the city’s best known resort and commercial facilities. He also was Tribal Architect for the Navajo Nation for several years and still does special projects for the Navajo. Marley sees Sedona is a vortex of eternal natural beauty - a unique blend of stone,sky and a trickle of water in Oak Creek Canyon where monumental sandstone monoliths reach skyward in multi-colored compositions that have kept and will always keep artists entranced. HSB, with much natural beauty of its own and being even more of a geological paradise, has much of this same natural charm. It also has more than a trickle of water. But there are two types of charm, both absolutely essential if a community wants to be attractive on a world-class scale. He singles out Sedona and Santa Fe as being unique cities because they have both types of charm. He believes HSB-Marble Falls must work such intimate architectural charm into its future growth if it expects to realize its exceptional potential. Sedona and Santa Fe have the added charm that arises from their profoundly warm, balanced and intimate architecture, as opposed to cold, spacious, disharmonious and insensitive architecture. Intimate architectural charm has made both communities havens for artists, galleries, writers, musicians and the like. The presence of these artisans multiplies the intimate charm of the two cities. And guess what, the self-complimenting charm arising from the intimate architectural seed attracts the public. In turn, the draw of the public supports the cities’ world class spas, resorts, restaurants and hotels – all done in the same intimate architecture that initially kicked off what became a self-perpetuating cycle. Although Marley got here 31 years after the Hurds began their wonderful work, he saw the HSB-Marble Falls area as still having more undeveloped potential than practically anywhere else in the country. And contrary to places like Sedona, it had plenty of choice space in which to grow and four-lane highways like 281 and 71 already in place to move the added traffic. In addition to having a wonderfully laid back and friendly lifestyle and a charming countryside, the location was practically unmatchable in today’s world for many other reasons. HSB-Marble Falls - a dynamic, symbiotic package - is nestled in what is by far the sweetest spot of three of our country’s most attractive areas – The Texas Hill Country, The Highland Lakes and The Llano Uplift. Our combined, self-sustaining HSB-Marble Falls community is the only one in all of central Texas that falls within each of these three choice areas. The Texas Hill Country has long been recognized as one of our country’s most appealing locales – esthetically, environmentally, architecturally, culturally, historically. The Highland Lakes offer fresh water recreational attractions that few areas of the country can match. The Llano Uplift is a geological paradise of world-class proportions that is best seen in the HSB area. Better yet, sitting as it does on the shore of Lake LBJ, HSB is not only located on one the best of the Highland Lakes, its on America’s lake of choice for those who know - the largest constant level lake in America, if not the world (see Google for “constant level lake”). No larger lake is maintained at such a constant level and nowhere can one live so intimately, yet so safely, with such a large water body. It is an unmatchable, one-of-a-kind lake, which makes HSB even more unique and special than it would otherwise be. Furthermore, blessed as it is to occupy such a uniquely attractive setting, HSB is also blessed in being located within 3½ hours driving time of five of America’s 19 largest cities - Houston #4, San Antonio #7, Dallas #9, Austin #16 and Fort Worth #19. Sedona and Scottsdale differ in being 3½ hours driving time from only one – #6 Phoenix, which is two hours distant from Sedona and ten minutes from Scottsdale. Santa Fe and Jackson Hole are within 3½ hours driving time from none of these cities. In addition, Marley notes that our little Hill Country jewel is inexorably connected to Austin, one of the hottest artistic places in the world, and to historic, multi-cultural, world renowned San Antonio to a somewhat lesser extent. Both cities are of course within a relatively easy commute. This gives our community something Sedona will never have - a synergistic relationship with major commercial locales that have great artistic and cultural ties. Sedona differs today in having become an important Western art and movie producing center. HSB/Marble Falls has cultural aspirations of its own. It is already recognized as having the Hill Country’s best theatrical stage, best music venue, and is its live-music capital. Our immediate area is loaded with exceptional artists and musicians. Our local area is actually home to many of the musicians that make Austin the World’s Live Music Capital. Sedona has fine shopping and interesting night life. HSB-Marble Falls has comparative little of each, but like in other supply-demand situations, that is being dealt with. We will have more than our fair share of both real soon. Many investors/retailers are maneuvering to fill the gap and the likes of Russell Buster, Mark Seriff, John Kemper, and Grant Dean are moving downtown Marble Falls toward becoming an attractive, integrated daytime shopping district and night time entertainment center – one that will have an abundance of live music and attractive places for listening and dancing to go with an already nice selection of fine restaurants. Sedona‘s is noted for its southwestern architecture, and is in remarkable harmony with its setting. HSB’s architecture needs updating and direction. The Resort is well aware of the situation and is working with HSB’s new City Council on this - hand-in-hand in priority fashion. They are working very well together toward a common goal of making HSB the best it can be. And even though HSB’s golf is already among the country’s very best, with its three Robert Trent Jones Sr. courses representing the largest Jones Sr. complex in the country and the three courses ranking among the country’s best, HSB will soon have more world-class golf. Escondido’s Tom Fazio Signature Course holds its Grand Opening this November. That huge new boost will be followed by a Jack Nicklaus Signature Course, to be operated by the Resort. This long-delayed course is now a certainty for a late 2008 or early 2009 opening. The Resort, its wonderful amenities, and the exceptional people attracted by what the Resort offers comprise a huge asset that is also missing at Sedona. In addition to what it already has, the Resort is well along toward coming up with a plan that reinvents itself as 5-star in every aspect, with practically all new infrastructure, all of which would be in place within a half dozen or so years. Look for a detailed announcement on this later this fall. In addition, look for similar announcements that the Resort will be upgrading the HSB airport, restoring it back to among the top private airports in the nation. Don’t be surprised if several tens of millions of dollars are involved in this upgrade. The Resort upgrade is in addition to the $2+ billion dollars that have been committed to the HSB Triangle since March 2000, as previously reported. And this $2+ billion does not include the hundreds of millions that have been committed during that same time span to the main portion of Marble Falls, which is located north of the Colorado River. So having gone through the exercise over the past dozen or so issues of comparing HSB-Marble Falls with the likes of Sedona, Santa Fe, Scottsdale, Jackson Hole or Carmel, what do you think? Is HSB-Marble Falls + Lake LBJ + The Highland Lakes + The Llano Uplift + The Texas Hill Country on its way to being the equal of or possibly significantly better than the likes of these communities and their immediate surroundings? And if so, within what time period - the next half dozen years, a dozen years, or not until 2020? From the perspective I have, one can become readily convinced we’ll compare favorably with the best of these five areas within a period of eight to ten years, not in size but in the quality of our offering, conditioned on five points: 1) that the price of crude oil does not fall below $40 per barrel, 2) that it averages at least $55 in today’s dollars during the period, 3) that the militant Islamic’s are contained, 4) that the Resort’s upgrade happens on the scale contemplated, and 5) that an ample portion of the other $2+ billion already committed to the HSB Triangle encompasses architecture that adds the additional charm for which the likes of Sedona and Santa Fe are noted – being profoundly warm, balanced and intimate architecture. What’s not taken into account here that remains a sizable plus is the additional $1 billion dollars floating around, still looking for a home in our immediate area. RETURN TO HSB BEACON ARTICLES INDEX
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