Boom may bar many from island
But influx of wealth would build tax base
By Amanda Nelson Caller-Times
November 18, 2004
Terry Quiroga and his wife bought their waterfront lot on Padre Island for $53,000 in 1993.
"We were lucky; we bought when everything was low," said Quiroga, an architect.
But, Quiroga said, they don't feel so lucky anymore.
He said he'd like to keep his waterfront home on the island forever, but he's not sure he can afford to retire and hold onto it. Quiroga said his property taxes have gone from $5,000 to $12,000 per year since he's been there. And, with rising property values, the homeowner said selling for a large profit is appealing. The lot next door to the couple sold about six months ago for about $265,000, he said.
A changing waterfront: A look ahead (last in a five day series)
Sunday
Last Stronghold: There’s not much coast left to develop in the United States, and people are scrambling to get a piece of Padre and Mustang islands.
Monday
Waiting Game: The future of Padre and Mustang Islands rests in the hands of three large developers.
Tuesday
Newport, Texas: A 1,400-acre planned development hopes to lure baby boomers dreaming of a resort lifestyle with upscale housing, golf courses, restaurants and marinas.
Wednesday
Vista Del Mar: A Padre Island landowner works to get a federal label, which makes development difficult, removed from his property
Today
A Look Ahead: The demographics of those living on the islands will change along with development.
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While they could make a good profit, homeowners who do sell now might find it too expensive to come back.
"Once they leave the water they know they can't come back to it unless they pay," Quiroga said.
Current development on Mustang and Padre islands is already having an effect on property values and taxes. Future development could cause prices and taxes to go up even more, causing changes to the area's demographics.
"Are we going to end up with an island full of rich people?" said Corpus Christi City Councilman Mark Scott, whose district includes Padre Island and part of Mustang Island. "I don't know."
Scott said the city is not actively involved in trying to run out current residents, instead they're trying to improve the quality of life with projects such as Packery Channel and the JFK Causeway.
Jeff Frahm, president of the Padre Island Business Association, said Padre Islanders are ready for quality and the high price that comes with it, if it means alleviating some of the tax burden they're feeling.
"With the affluence and the rising property prices, (Padre Islanders) want this to be a resort class community," Frahm said. "That will provide huge marketing power to the City of Corpus Christi and the island. It helps the whole property tax burden that the island feels."
Paul Schexnailder, owner of Asset Development Corp. and a partner in Gulf Shores Joint Venture, is planning a 1,200-acre development on Padre Island. Schexnailder, who has done extensive research on home and lot sales, said most local residents would not be able to afford the rising cost of property. However, people who are used to buying more expensive property in other areas of the country will.
Schexnailder would not say how much property in his development would go for.
Craig Millard and Sunny Castor have said prices of homes and condominiums in their 2,000-acre Mustang Island development will start at $350,000 and go up to $2 million. The developers said they hope to lure baby boomer Texans to the planned development on Mustang Island who live within 400 miles of the Coastal Bend - not local residents.
"Our surveys have stated that most of the people would come from within that 400 miles but not necessarily within the Corpus Christi area," Castor said.
Most developers and other island residents won't make predictions as to how the demographics of the island might change, but some other coastal areas of the country, which have already seen similar developments, may provide an indication.
Hilton Head Island, S.C., began to see planned communities in the 1950s and 1960s, said Randy Nicholson, comprehensive planning manager for the Town of Hilton Head. Those planned communities have not changed the makeup of the island's population because people bought property as vacation homes. Nicholson said it's likely the changes will happen when property owners make their vacation homes permanent residences.
In other areas of the country where coastal planned developments have taken place, demographics have changed and done so quickly.
The Seaside community of Walton County, Florida, which provided the set for the 1998 movie "The Truman Show," starring Jim Carrey, demonstrates how things change when land values go up 26 percent in a year.
Founded in 1981, the town was designed by Duany Plater-Zyberk & Company, the same land planners who are designing Castor and Millard's Newport development on Mustang Island.
"Seaside was originally envisioned as place where people would live year round, not as a tourist destination," said Tom Powell, executive director for the Walton County Economic Development Council, Inc. in Walton County Florida. "But it quickly became so popular that ordinary people couldn't afford to live there."
As a result of increasing land values, Powell said property in his area has become less appealing to those seeking a permanent home and more appealing to those seeking an investment in rental property.
In 1992, Powell said, Walton County was a rural, economically distressed area with no appreciable industry. Then the little rural county on the Gulf of Mexico had what Powell called a growth spurt that began with some planned developments, similar to those proposed in the Coastal Bend.
"The end result of this process is, you end up with a place that is expensive, that only the affluent visitors can afford to rent," Powell said.
But it's not just residents who may have trouble affording the rising costs.
Stan Starrett was in the right place at the right time when he bought a few large tracts of land on Mustang Island in 1996.
His colorful residential developments called Beachwalk I and Beachwalk II, which Starrett said were the first major residential projects to go up in about 10 years on Mustang Island, have won several design awards.
But Starrett said his development days on Mustang Island may be over.
"As I understand it, the prices have gone up about 10-fold since I bought those lots," he said. "That's why I can't come back and duplicate what I did in Beachwalk. The price of the land has just gone through the ceiling."
Scott, of the City Council, said rising valuations are not necessarily a bad thing.
"I've said for years that if we can grow at adequate rates, we can reduce the tax, and we did that this year," he said. "If people move to the island and we're stimulating development, then theoretically we should be able to reduce the overall tax burden because of the growth."
Contact Amanda Nelson at 886-3678 or nelsona@caller.com
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