by: Nicole Barrios / Round Rock Leader
Kalahari Resorts and Conventions has formalized its handshake agreement with the city by approving a memorandum of understanding, an agreement slightly stronger but still not legally binding.
The Round Rock City Council approved the memo with KR Acquisitions LLC, a Delaware limited liability company representing Kalahari during a June 24 meeting. Two weeks ago, the resort company made announced its plans to build an African-themed resort on 355 acres across from Dell Diamond. Kalahari Resorts owner Todd Nelson said earlier this month that the resort will include a 990-room hotel, 200,000-square-foot indoor water park and 150,000-square-foot convention center.
The project will add millions of dollars to the city’s property tax base, generate millions of dollars in new sales tax and hotel occupancy tax revenues and add approximately 700 new jobs to the Round Rock economy, according to the agreement. Kalahari is expected to invest a minimum of $250 million into the project, making the resort company the largest property tax entity in Round Rock and Williamson County, said Ben White, Round Rock Chamber vice president of economic development.
“This is the next big thing that we’ve been talking about for some time,” White said.
The memo outlines incentives for the resort company is set to receive incentives from the city if the company meets requirements outlined in the memo. According to the agreement, the city will loan the company approximately $11 million to purchase a 155-acre portion of the property.
The city will issue bonds in an amount to be determined in order to provide funds for the construction of the convention center and related infrastructure, the document states. The city will own the convention center, but will lease it to Kalahari for $1 per year for a term to be determined. But Kalahari will be responsible for operation and maintenance costs, according to the memo.
When the debt associated with the bond is paid, the city will convey the convention center to the resort company at no cost, the document says.
The city will also issue bonds in an amount yet to be determined to provide funds for the construction of public roadway improvements, public utility extensions and other public infrastructure for the project, according to the memo.
The Chapter 380 Economic Development Agreement between the city and Kalahari provides performance-based payments partially based on the amount of tax revenue the city receives from the project, the document says. Site and construction permit fees, water and wastewater impact fees and road impact fees will be waived by the city, according to the memo.
The city also intends to work with Williamson County to provide one or more economic development incentive agreements to Kalahari in exchange for the resort choosing to build in Round Rock, according to the document. The memo does not go into details on those agreements.
White said the memo sets the stage for the formal incentives agreement, which will be drafted in the coming months.
Kalahari expects to begin construction on the new resort within three years, according to the memo.
“This project is really a game changer for this community,” White said. “It will bring in a convention center that is much needed for this area.”
White said officials expect the convention center to be the second largest in Central Texas, and the hotel will be the second largest in the area. The project is expected to be the largest combined hotel and convention center in Central Texas as well, he said.
Mayor Alan McGraw said most people find it hard to believe the project began with a cold call from White to Kalahari representatives telling them about Round Rock.
“That started the two-year process,” McGraw said. “When we talk about economic development, it’s not sitting back and waiting for it to happen. It really is a proactive approach.”