Residents weigh in on zoning issues for Kalahari project

Kalahari's Bill Otto, center, listens as a resident asks a question at the May 18 open house.
Kalahari's Bill Otto responds to a resident's question at May 18 meeting.
Senior Planner Clyde von Rosenberg points to the tree line along Brushy Creek along the southern portion of the project.
City Councilmember Writ Baese talks to a couple at the May 18 meeting.
Transportation Director Gary Hudder listens to traffic concerns from a resident.
Residents talk among themselves at a map that shows the boundary of the 351-acre site at the May 9 meeting.
Residents talk with City staff and Kalahari officials at the May 9 meeting.
Steve Pine, Kalahari Director of Development, converses with residents at a map that shows the proposed layout of the project.

More than 140 people attended open houses held May 9 and May 18 at Ridgeview Middle School to provide their input on the Kalahari Resort project. We really appreciate the feedback received from folks. It will help inform the Planned Unit Development (PUD) zoning for the 351-acre site.

Attendees were able to ask questions and offer comments to City planners, transportation staff, public safety officials and Assistant City Manager Brooks Bennett, as well as Bill Otto, Executive Vice President, and Steve Pine, Director of Development, for Kalahari. Members of the Round Rock City Council attended as well.

Here’s a full recap of what we heard, and our responses, at the two meetings.

A lot of the concerns we heard dealt with traffic and impact to property values. The most important feedback we were looking for dealt with the various uses Kalahari has proposed for the project. That’s goes to the heart of the zoning change that will be considered later this summer by the Planning and Zoning Commission and City Council.

Here are the written comments we received about potential future land uses:

  • Concerned about petting zoo in Phase 2 and height of potential high tech golfing range.
  • I don’t want to see, hear or smell this from my home.
  • No golf driving range
  • No theme park
  • No petting zoo
  • No aquarium
  • High level of concern over amplified noise from “small venue amphitheater/outdoor music
  • No connectivity of Kalahari to Brushy Creek Trail system +1
  • No outdoor water park
  • Absolutely no outdoor (or indoor) music venue
  • No rec. lake
  • Just no
  • Employee housing means a direct non-guest impact to trails and neighbors ignored by everyone to whom we’ve spoken
  • No screaming children outside
  • No fireworks please
  • Please offer a resident discount. I live a mile away
  • I like the trails and creek. Please don’t ruin them with this.

One thing Kalahari’s Bill Otto told the many residents who sat down to talk to him at the meetings is that Kalahari is a family resort, and many of the concerns — noise, lighting — are issues they focus on for the comfort and enjoyment of their guests.

This graphic shows the process for the zoning change.

 

Top 5 deal points in the Kalahari agreements

Mayor Alan McGraw, right, and Kalahari owner Todd Nelson sign agreements after the Dec. 15 City Council Meeting.

Mayor Alan McGraw, right, and Kalahari owner Todd Nelson sign agreements after the Dec. 15 City Council Meeting.

The City Council took another step forward to bringing the Kalahari Resorts project to Round Rock when it approved a series of 10 agreements on Thursday, Dec. 15. Click here to watch the presentation to the City Council about the agreements, which includes comments from Kalahari owner Todd Nelson.

There are more than 1,000 pages total in those agreements, so we thought we’d break it down to a handful of highlights.

  1. Kalahari will invest at least $350 million and employ a minimum of 700 for the resort, convention center and indoor-outdoor water park.
  2. All revenue sharing and public debt related the project will be paid using select State and City tax revenues generated solely by the project.
  3. While the City is purchasing and will own the 351 acres across U.S. 79 from the Dell Diamond and Old Settlers Park where Kalahari will be built, it will be repaid the approximately $27.5 million purchase price in two lease payments: the first $17 million lease payment will be made before the property closes on Dec. 20, and the second payment will be for $10.5 million, plus interest, in eight years.
  4. Thanks to great work by State Rep. Larry Gonzales, the City is able to utilize a state law designed to encourage these types of tourism-generating developments to leverage State tax revenues as part of the deal. That means the State hotel occupancy tax, sales tax and mixed beverage tax generated by the resort will stay right here in Round Rock to help pay for the project’s public debt and revenue sharing.
  5. Specifically not included in the agreements are the City’s half-cent sales tax for property tax reduction, half-cent sales tax for economic development and roads, and 2-percent hotel occupancy venue tax. The City will retain 100 percent of those revenues generated by the project.

Why the Kalahari Resorts project is a Big Deal

The Convention Center at the Poconos resort offers 65,000 square feet of flexible space including 25,000 and 9,000 square foot ballrooms, 18 meeting rooms and multiple hospitality suites. Current plans are for a 150,000 square foot facility in Round Rock.
Offering a variety of versatile venues, catering services and state-of-the-art features, Kalahari's Convention Centers are used by groups both large and small.
Kalahari Resorts and Conventions in the Poconos features a lake at its entry, something being considered for its Round Rock property.
The lobby of Kalahari Resort in Sandusky, Ohio, gives guests the first taste of the resort's authentic African theming.
Overview of the 100,000 sqare foot waterpark at Kalahari Resorts in the Poconos.

A lot of the news media coverage and some of the social media comments about the Kalahari Resorts announcement June 15 focused on the indoor/outdoor water park that’s a major element of the project. We understand why, but the project is so much more than that.

Here’s why: As currently proposed, the 1,000-room hotel and 150,000 square foot convention center would be the second largest in Central Texas.

That’s B-I-G big.

How big? Here’s how they would compare (according to the Austin Business Journal):

Largest hotels in Austin metro area

  1. JW Marriott, 1,012 rooms
  2. Hilton Austin, 801 rooms
  3. Renaissance Austin, 492 rooms

Largest indoor meeting spaces in Austin metro area

  1. Austin Convention Center, 369,000 square feet
  2. Hyatt Regency Lost Pines Resort and Spa, 60,000 square feet
  3. The Expo Center, 55,000 square feet

That’s why we characterize this proposal as a game-changer for Round Rock. It puts us in the hospitality and conference business in a big way. By way of comparison, the Marriott in La Frontera has 12,900 square feet of meeting space. The United Heritage Center at Dell Diamond has 5,400 square feet. They’re both great spots for a meeting, but nowhere close to the scale Kalahari is planning.

Kalahari is unlike any hotel/convention property in Central Texas. It’s a family resort destination that will draw approximately 1 million visitors annually. That’s 1 million folks coming to town, having a great family vacation or unique conference/convention experience, spending their dollars here and then heading back home. The project will generate millions of dollars a year in local and state government revenue. We can’t estimate just how much yet, because there aren’t enough details worked out in the development proposal.

A minimum of $250 million invested in property and capital, along with at least 700 jobs, is why we are negotiating an incentive package with Kalahari. We are working on a deal that will benefit both sides. The memorandum of understanding approved June 23 by the City Council lays out some of the parameters of the still-being-negotiated agreement. (In case you’re wondering what an MOU is, visit this FAQ.)

Here are 5 key points of the MOU:

  1. The City intends to loan Kalahari $11 million to purchase 155 acres of the 350 acres or so it has under contract. The loan will be in the form of a real estate lien note, with a reasonable rate of interest, secured by a first lien deed of trust. So what’s a real estate lien note and first lien deed of trust? Real estate lien note means the City will hold the land as collateral on the loan, which we anticipate funding from City cash reserves. First lien deed of trust means that any private financing Kalahari gets for project will be “second in line” as collateral on the 155 acres.
  2. The City plans to borrow money for the Convention Center and related infrastructure. The City would own the Convention Center until it is paid off. This will allow us to take advantage of favorable financing options (see point 5 below). We anticipate Convention Center debt will be backed by local hotel occupancy tax (HOT) funds and Type B sales tax funds. However, we plan to make the actual debt payments from the tax revenues generated from the project.
  3. The City intends to issue debt, likely Certificates of Obligation (COs), to pay for road improvements and other public infrastructure necessary to the project. COs are backed by property taxes, but, again, we plan to make the actual debt payments from the tax revenues generated by the project.
  4. The MOU lays out the types of revenue the City intends to share on the project. They include the local 7 percent HOT tax, 1 percent general local sales tax, local mixed beverage tax, City property tax and any eligible state taxes. What’s not included is the 2 percent local venue tax that helps pay for the Round Rock Sports Center; the half-cent sales tax that reduces property taxes and the half-cent Type B sales tax that pays for transportation improvements and economic development activities.
  5. We plan to use a recently-amended state law that allows the City to use state hotel occupancy tax revenue and state sales tax revenue to pay for a number of eligible uses related to the hotel and convention center. The key to the law is the City has to own the Convention Center. Using local HOT funds and local sales tax funds are the norm for major projects like this one. Leveraging the state’s 6 percent HOT tax and the state’s 6.25 percent sales tax is, ahem, a B-I-G part of this proposal.

Splash. Play. Meet: Kalahari Chooses Round Rock!

What do expansive meeting space, splashing good times, world class accommodations and the City of Round Rock have in common? Plenty, thanks to today’s announcement by Kalahari Resorts that they’ve officially selected our community as the location for their next big project!

A family-owned business, Kalahari is dedicated to providing guests with what they refer to as a “beyond expectations” experience. This morning, we were transported to that reality via the announcement event that took place at Centennial Plaza right here in Round Rock.

Kalahari collage 1

Todd Nelson, owner of the family of resorts, spoke about his organization’s commitment to guest experience, their employees and the communities where they operate. It was immediately clear that this isn’t going to be just another project, but instead, a huge win for Round Rock that will bring substantial economic development, jobs and a resort overflowing with a family-friendly atmosphere that you just don’t get everywhere you go.

“Texas gets it; I think the entire state gets it,” Todd Nelson, owner of the Kalahari Resorts group, said. “And Round Rock absolutely gets it – we could not be any happier to be here!”

So what can you expect from the new resort?

Definitely not just another waterpark, Kalahari’s next project is going to be a game-changer! From a convention center designed to accommodate sizable group meetings and other events, to excitement-inducing resort amenities, this place looks like it’s going to be filled to the brim with this-is-so-cool-we-never-want-to-leave-style fun! And while design plans aren’t fully fleshed out yet, video shown at the announcement allowed us to go inside Kalahari’s vision for creating a “world-away” resort that brings business, family and fun together in an unexpected atmosphere centered around connecting with those around you.

Here’s a quick glimpse of one of their resorts currently located in Sandusky, Ohio:

Excited? So are we. In fact: We. Can’t. Wait! But with so much work still to be done, it’s time we get back to it. Stay tuned here for more details about the project!