GOLF RESORT PROJECT

For a printable PDF version of the assignment, click here.
For a printable PDF version of background information, click here.

OVERVIEW: This project uses the environmental issues associated with the management of water resources in a role-playing setting.

PROJECT OBJECTIVES: The primary objective for this project is to negotiate a resolution to a conflict over golf course and resort development project.

1. San Antonio City Council
2. SAWS - San Antonio Water Supply
3. EAA - Edwards Aquifer Authority
4. Lumbermen's / Marriott / PGA - developers
5. Smart Growth Coalition - coalition of several environmental and social justice groups who oppose PGA Village

PROJECT SCENARIO:
PROPOSED DEVELOPMENT
Lumbermen's Investment Corporation owns 2,855 acres just north of San Antonio's city limits. It plans to develop that land within the next several years. In 2000, Texas Legislature approved a bill that would deem that land Cibolo Canyon Conservation and Improvement District No. 1, a special taxing district belonging to Lumbermen's. In order for this taxing district to actually come into being, Lumbermen's would have to negotiate an acceptable development plan with the city of San Antonio (or more specifically, it's City Council).

The bill was written largely by Lumbermen's lawyers and lobbyists and was passed with almost no modifications. (The only significant modification came after legislators realized that the company was being given powers of eminent domain for up to three miles beyond its property-whoops.)

If approved by the City Council, the developer basically gains all the powers of a city, including the power to sell tax-free, discount-rate bonds (usually reserved for cities) to finance the "public" infrastructure, and to levy property, sales and occupancy taxes and fees to repay those bonds. It is important to note that the infrastructure costs of any resort development are most frequently paid by the developer.

The district would be "governed" by a board. The first board members have been chosen by Lumbermen's, since there are currently no residents on the land to elect members. This temporary board will remain for four years, after which time, board members will be elected for four-year terms by residents.

After a certain number of agreed-upon years (which throughout negotiations has ranged from 15 to 20 to 13 and back to 15 years) the city of San Antonio would have the right to annex this district, and would then begin collecting the taxes that were previously going to the developer's governing board. If annexation occurs at 13 years, the developers will have recouped $51.7 million. At 15 years, that number becomes $57 million, and at 20 years, a whopping $82.8 million. These numbers are exceptionally higher than corporate tax abatements given by that city in the past.

The city council has made it clear that it will only accept the terms of the taxing district if the development includes (as originally proposed) a world-class golf resort, built by Lumbermen's, Marriott International, and the Professional Golfers' Association. For the first phase of development, these companies plan to build at least two golf courses, a 500-room hotel resort, a residential community composed of 4,000 homes, condos and apartments, and 100,000 square feet of commercial office space.

The San Antonio Economic Development Foundation released a study projecting that the economic impact of the first phase of the project would be more than $311 million.

The proposed development is said to bring between 600-800 full time jobs. Part of the current agreement calls for a living wage, meaning all jobs start at least at $8.50 an hour. However, people are concerned that, because the resort and surrounding areas will be developed almost exclusively with upscale housing, there won't be any housing for employees working low-paying jobs.

La Cantera, a similar golf and hotel resort in the area, is also far away from neighborhoods where the low-wage workers live. This resort found that workers wouldn't ride the bus hours daily from the city's South Side for $7 an hour, and as a result, hired dozens of low-wage workers from Jamaica. Through various tax-breaks to the company, taxpayers subsidized the creation of these jobs, which were subsequently filled with out-of-town (indeed, out-of-country) workers

EDWARDS AQUIFER
The 2,855 acres of the proposed development are situated in the Edwards Aquifer recharge zone. This is the area that contributes to replenishing the Edwards Aquifer, a 175-mile long limestone aquifer that is the primary source for drinking water for San Antonio and surrounding rural areas (providing for about 1.5 million people). Water enters the Edwards Aquifer through the porous limestone, as well as through cracks and caverns in the limestone. Limestone aquifers do not filter water like sand aquifers do, and are thus highly sensitive to contamination in their recharge zone.

Obviously, a development of this sort in the Edwards Aquifer recharge zone is a sensitive issue for two main reasons. The first is water contamination, and the second is water availability. Golf courses are notorious users of both excessive amounts of water for irrigation, and tremendous amounts of chemicals for fertilizers, pesticides, herbicides, etc. Both of these concerns are discussed below.

LAND DONATION
As part of the original agreement, Lumbermen's was going to turn over 1,100 acres of open space to the tax financing district (and thereby to San Antonio, after annexation) for a park and permanent green space. It would then reimburse itself up to $20 million for that land from the tax revenue of the district. However, San Antonio's mayor, Ed Garza, decided that because much of the 1,100 acres in question was restricted and couldn't be intensely developed anyway, and wasn't as environmentally sensitive as other land in the district, it wouldn't be in the city's best interest to buy it.

The company then came up with a second plan. Rather than selling the land to the tax district (and in turn, the city of San Antonio), they'd donate it to a nonprofit organization for preservation. They would then get a federal income tax deduction for the value of that land -- a deduction that has been estimated at around $5.25 million.

Instead, they would sell the tax district 865 acres which has been set aside for the resort's PGA golf courses. Under the first plan, Lumbermen's was going to donate that land to the PGA. Under this plan, after paying Lumbermen's fair market value for the land, the district would donate it to the PGA. Further, because this land has fewer applicable restrictions than the 1,100 acres originally offered, it will actually have a higher value. Lumbermen's will be able to reimburse itself a projected amount of between $17.3 million and $26 million.

CONTAMINANT MITIGATION
Studies show there is a strong relationship between location of golf courses and contamination of groundwater.

There are certain regulations written into the agreement about the kinds and quantities of chemicals the resort will be allowed to use. The agreement also prohibits the use of fertilizers on the golf courses if the probability of rain exceeds 30 percent that day, 35 percent the next day or 45 percent the day after that because rainfall runoff can easily carry pollutants to the aquifer.

Part of the agreement is that Lumbermen's set aside $1 million for mitigation in case contamination does appear in the aquifer. Most experts agree that $1 million set aside for groundwater cleanup is not nearly enough. They also feel that there are too few aquifer monitoring wells, and are wary because no groundwater cleanup levels have been specified as part of the negotiations. When it comes to water quality, they say, the agreements leave too many loopholes for Lumbermen's to exploit down the road.

ENDANGERED SPECIES
This land is also possible nesting ground for an endangered bird species, the golden-cheeked warbler. The golden-cheeked warbler is a small migratory song bird that spends several spring and summer months in Central Texas, where it nests and raises its young. They leave Texas in July to spend the winter in Mexico and Central America. The warbler is believed to be endangered because much of its nesting area -- tall juniper and oak woodlands -- have been cleared for agricultural or residential development.

U.S. Fish and Wildlife Service surveys show the precise locations where warblers were found during four spring breeding seasons in the late 1990s on a 1,812-acre tract owned by Lumbermen's. Most of the proposed resort would be built on this parcel. A comparison of those warbler location maps with Lumbermen's latest PGA Village site development map on file with the city indicates seven of 19 places where the birds have been documented could be lost to resort development. Experts believe that the resort likely would cause the birds to abandon territories where they have been documented because they would "find themselves on the edges of development, and from all documented evidence golden-cheeked warblers will not tolerate that."

Lumbermen's says that they have no plans to make improvements on one edge of their property where at most two golden-cheeked warblers have been observed over the past five years. They also contend that no nesting warblers ever have been observed at the site and the area where the two birds were seen was graded as "very marginal" habitat at best, the Lumbermen's statement said. They still say, however, that said they will comply with the demands of the Endangered Species Act. (from S.A. Express News)

WATER USE
Water experts say that the typical 18-hole golf course consumes approximately 400 acre-feet of water each year, about the same amount of water as 800 typical families of four. There are 325,851 gallons in an acre-foot.

Water use for the proposed development should not exceed 293 million gallons a year, but as part of the agreement, Lumbermen's has to agree to purchase water rights of twice that amount - 586 million gallons. The remainder (what they don't use) will be left in the aquifer for use and distribution by SAWS. This "extra" water "ensures that they're not putting a strain on the water supply for the rest of the community" (whatever that means) according to a SAWS spokesman. It also ensures, according to the agreement, that the golf courses will be exempt from any water use restrictions in times of drought.

The proposed golf courses would apparently use several high tech devices to ensure that water "waste" is kept to a minimum. The watering systems for the golf courses use underground monitors that check the moisture content of the soil, to help prevent unnecessary irrigation. The grounds will also be equipped with a Doppler weather radar when to irrigate and when to fertilize.

ALTERNATIVE SCENARIO I
Although the city passed a law in 1995 regulating the development of any land in the recharge zone, Lumbermen's has "grandfathered" rights to develop their land outside of those newer regulations. The 1995 legislation says that all development in the recharge zone must be limited to 15% impervious cover. However, because Lumbermen's filed a preliminary residential development plan before that time, they are exempt from following those regulations.

Lumbermen's has threatened that if this tax district is not approved, they will proceed to develop their land as intensely as possible. They say they can build as many as 9,060 homes, although later reports show they only have sewer rights to about half as many homes. In any case, they could still arrange for sewer service from a private contractor, or build their own waste management facility.

Lumbermen's has made it clear that it feels the resort development is the most ecologically friendly development option. One heavily regulated resort, it implies, is better for the environment than 9,000 individual homeowners putting whatever sorts of bug and weed killer on their lawns and using as much water as they'd like.

Many San Antonio citizens are outraged by this threat, especially because it comes from a company who claims to place high priority on environmental stewardship

ALTERNATIVE SCENARIO II
Many San Antonio citizens feel that the city should purchase the proposed resort area from Lumbermen's, and turn it into a park. They feel this is the only way to ensure that this land is not developed and that the aquifer is protected.

In May 2000, before the PGA Village was proposed, San Antonio voters approved a 1/8-cent sales tax increase to raise $65 million for protection of the Edwards Aquifer, including $45 million for aquifer land purchases. As of 2001, the city had spent $20 million to buy 2,700 acres, and it has about $16 million left for such purchases. The city hadn't purchased any land in the highly sensitive area east near the proposed development.

The remaining $16 million is not enough to buy the PGA Village property. Lumbermen's places a high value on the land (estimated at $20,000 an acre), because of the leverage it holds with the threat of intense development allowed by its grandfathered development rights.

Some city officials and several environmental groups have proposed extending the sales tax past it's original 2004 deadline to raise the additional money for this purchase. Others feel that Lumbermen's should be allowed to develop, but still support extending this tax for other land purchases in the area. Something to be considered, however, is what a world-class golf resort will do to property values and the likelihood of development in that area.

Purchasing Lumbermen's land is a possible outcome of this debate, but comes to the city with one of the highest financial price tags of all the options.

ASSIGNMENT: Each group will develop a river basin management system for the region that includes specific policy considerations for the Council. Each recommendation from a stakeholder group must include the combination of proposed strategies, the overall costs and benefits of the program (qualitatively), and a justification of why this is the best plan. On the scheduled date, each group will have 5 minutes each to present its plan to the Regional Planning Council. The Regional Planning Council will have a total of 10 minutes to ask the groups questions. The Council may allow some questions from the rest of the audience. The Council will then incorporate these comments into their pre-prepared plan and announce the final decision. Each of the groups must also turn in a 3-page written position piece outlining its rationale - this means the plan and justification for why it should be adopted. The written deliverable must include a concept map highlighting the issues and a decision matrix to decide between alternatives (these can be in addition to the 3 pages).

You are free to research this as much as you want. Your grade will depend on the extent of substantiated points. Cite all references used. Be careful to both use reliable sources and to adopt the role of the stakeholder you represent. Besides the internet (especially newspaper articles), the following books have substantial relevant information: Compass and Gyroscope by Kai Lee, Island Press, 1993; and Upstream, National Research Council, 1996.

HOW TO PREPARE: As you are researching ask yourself these questions:

• What is the problem that must be solved? Why is it complicated? What are the issues?
  
  
• Characterize the case with tools we are using (e.g. concept map, the decision matrix)
  
  
• Who are the main stakeholder groups? What are their objectives? Are they conflicting?
  
  
• What are the alternative solutions to the problem?
  
  
• What criteria can be used to evaluate the options?

GRADING:

SOURCE: San Antonio Express-News