$400M project springs up in Hays

Austin Business Journal
by A.J. Mistretta
ABJ Staff

Greg Rich sees tremendous untapped promise in the quiet Hays County community of Dripping Springs.

To hear him tell it, the town straddling U.S. Highway 290 is set to boom in coming years as the regional population expands and more people look there for quality living opportunities nearer to Austin.

So after lying dormant for six years following the last real estate bust, Rich and his Dallas-based Siepiela Development Corp. are forging ahead with Caliterra -- a high-end resort community that will bring up to 450 homes, a luxury hotel and golf course to a 600-acre tract near the intersection of U.S. 290 and RR 12. A groundbreaking on the $400 million project is slated for the fourth quarter.

"We were moving along very quickly and literally had plans to start the development in September 2001 when 9/11 hit," says Rich. "It was an active decision to put everything on hold and wait for the right time."

He believes the time has come. Through the years, the plans for Caliterra have been refined. Gone are components to attract regional businesses, such as a conference center. In their place is a heightened focus on luxury with a golf course designed by D.A. Weibring/Golf Resources and a 275-room resort hotel. Siepiela is currently in talks with two hotel chains about putting a property on the site -- that component alone could bring an investment of $70 million, Rich says. In addition to up to 400 single-family homes priced from $400,000 to more than $2 million, there will be as many as 50 smaller, villa-style homes lining the golf course and priced around $300,000.

Rich says with only 450 homes clustered around the 246-acre golf course, the project is well within the area's strict impervious-cover guidelines.

The site plan for the project was completed by Dallas-based Mesa Design Group in conjunction with PBS&J in Austin. CMA Engineering, also in Austin, was tapped to handle the engineering component. Rich says Siepiela has yet to select builders for Caliterra, but several companies have expressed interest.

Michelle Fischer, city administrator of Dripping Springs, says Siepiela has not yet filed a new plat with the city indicating how the project will be divided. Preliminary plats filed previously have expired, so the city will need to revisit the project.

Though it will be in Dripping Springs' extraterritorial jurisdiction, the project would still have a significant economic impact on the city from dollars spent by residents as well as visitors to the hotel, Fischer says.

Though less than 2,000 people currently reside within Dripping Springs, the city's extraterritorial jurisdiction -- one of the largest, geographically, in Texas -- includes another 20,000 residents, and new building permits continue to escalate.

Rich says beyond creating an amenity for Caliterra itself, the golf component would be a plus for all of Dripping Springs since there are no plans to develop another one in the near future.

"The land suits itself for a nice community, and the idea has always been that the resort would service not just Austin but the Hill Country region from North San Antonio west to Fredericksburg," he says.

Caliterra was originally approved as a development district by the Texas Legislature in conjunction with the city of Dripping Springs and Hays County.

Development districts are designed to operate like municipalities, lowering the cost of planned communities and advancing area infrastructure through the sale of bonds. In time, however, it's possible that Caliterra will be annexed by Dripping Springs.

With much development centered in the region around Cedar Park and Leander to the northwest of Austin, Rich says Dripping Springs is still a slightly easier commute for people traveling the roughly 20 miles into downtown.

Fischer says several other high-end subdivisions are currently in the works around Dripping Springs, though she isn't certain if any will have homes reaching the $2 million mark.

In city surveys, she says, the No. 1 reason new residents cited for moving to the area was the school district, which is considered one of the region's best. That's a double-edged sword.

Right now, the district is looking at how to increase capacity to keep up what could become a very strained school system in coming years if the population grows as anticipated. Meanwhile, commercial infrastructure is also getting a boost.

A Home Depot store is currently being reviewed as part of a 400,000-square-foot planned development district that's also supposed to include an H.E. Butt Grocery Co. store.

Fischer says with big retail moving in -- along with the golf course and hotel at Caliterra -- the city is on its way toward getting plenty of new jobs.

But to make Dripping Springs a viable option for the estimated 500 people that HEB alone will employ, the city needs to ensure there will be a wide variety of living options available to people in all income brackets, she says.

amistretta@bizjournals.com | (512) 494-2519