Round Rock Expects Kalahari to Spend $350 Million, Create 700 Jobs

by: Joe Warner / Community Impact Newspaper

Round Rock expects Kalahari to spend $350 million, create 700 jobs
6 critical questions about the development agreements that go before council Dec. 15

Kalahari location in Round Rock

Kalahari will open across from the Dell Diamond on Highway 79 in Round Rock.

Round Rock city leaders call the new Kalahari Resorts & Conventions development a “game changer” as the city seeks to diversify its economic base.

“It’s going to be a huge impact on Round Rock,” Mayor Alan McGraw said. “Dell [Inc.] is a great asset to our community, but we need to have a more diversified economy, and that is what we have been working on for years.”

Several agreements will go before Round Rock City Council members for a Dec. 15 vote that would bring Kalahari to West Palm Valley Road across from Dell Diamond.

The agreements provide for Kalahari to:

  • Employ 700 people
  • Invest at least $350 million
  • Build a minimum 975-room hotel with a 200,000-square-foot indoor/outdoor water park and 150,000-square-foot convention center.

When Kalahari announced they would come to Round Rock in June, the initial investment was estimated at $250 million.

“There have been a few changes, and they’re win-win for the city of Round Rock,” Assistant City Manager Brooks Bennett said. “This will add a whole new sector to our tourism economy.”

Kalahari’s leaders said they are happy to make such an investment in Texas, their first major investment in the south.

“The Round Rock area is one of the fastest-growing tourist destinations in the country,” Kalahari Executive Vice President Bill Otto said. “With something for everyone, the diverse area attracts a wide variety of visitors of all ages. We are excited at the prospect of joining the city of Round Rock and being here in such great company.”

Otto said his company’s other resorts, with locations in Sandusky, Ohio, Wisconsin Dells, Wis., and the Pocono Mountains in Pennsylvania, are in established tourist destinations within a three-hour drive of a large population center. When considering a new location, he said other factors include the area’s topography, employment pool and future growth opportunities.

The park will be consistent with other Kalahari properties with its authentically African theme, but other plans are still in the works.

“We cannot confirm everything that will be included at this time,” Otto said. “What we can share is the project will host up to 1,000 rooms, an indoor-outdoor waterpark, restaurants, spas, a family-entertainment center and a convention center.”

Round Rock’s commitment includes the issuance of approximately $40 million in bonds to construct the city-owned convention center, $30 million in bonds to construct improvements to the Hwy. 79 intersections, and road and utility improvements on the site. The city will also waive an estimated $4 million in development fees.

The city of Round Rock will own the 351 acres, which will be leased to Kalahari for up to 99 years. Kalahari will make an $17 million lease payment to the city and then an additional $10.5 million lease payment in eight years.

The bond debt will be repaid through select state and city tax revenues generated by the project. The $30 million in public improvement bonds will be backed by city property tax revenues. The $40 million in convention center debt will be paid by local hotel occupancy tax revenues and Type B sales tax revenues.

After the debt and performance-based incentive payments are made, the city will receive $4.7 million per year in new tax revenue, according to city estimates.

Such a steady revenue source complements other Round Rock-based companies, according to the mayor.

“They are two different industries, but Dell is a technology company and it is constantly changing,” McGraw said. “The revenue that we are talking about from Kalahari is people coming in, staying in hotels, enjoying themselves—the things people do on vacation. It is not an ever-changing technology.”

Mayor Pro Tem Craig Morgan said Dell put Round Rock on the map, but the diversity in tax revenue will benefit the city as it continues to grow. The convention component, he said, makes the resort a strong partner in the community.

“This will be a huge tourism draw,” Morgan said. “It opens us to be able to compete with convention space. You will have people coming in from all over the country to conferences at this convention center.”

The wheels on the project started rolling, according to McGraw, after a cold call was made by Ben White, the Round Rock Chamber vice president of economic development.

“They knew they wanted to come to Texas and did an exhaustive search from the Dallas Metroplex to San Antonion looking for exactly the right spot,” McGraw said. “Knowing you want to go to Texas is one thing, finding the exact spot is something totally different.”

In the June announcement, White said bringing the project was a collaboration among many city departments and entities.

If completed today, the Round Rock Kalahari Resort & Conventions development would be the second-largest hotel and the second-largest convention center in metro Austin, trailing only the JW Marriott and the Austin Convention Center, respectively.

The proximity to the city of Austin, Austin-Bergstrom International Airport and highways to San Antonio, Dallas and Houston have city officials excited about the Kalahari development.

“We are sitting in the state with millions of people, and it is easy to get to,” Morgan said. “You can fly into ABIA and get on [SH] 130, and you’re in Round Rock in 30 minutes. Tourists are going to have great access to the resort, so I do think it is going to have a great impact on our economy.”

The City Council meeting will begin at 5 p.m.—instead of the usual 7 p.m.—Dec. 15. After the agreements are approved, zoning changes would next need to be requested for the 351-acre property. The city said the public will have multiple opportunities to provide input during the process, which will begin in the spring.

For more details on the agreements and background on the project, visit www.roundrocktexas.gov/kalahari.

Round Rock City Council meeting 

Thursday, Dec. 15 at 5 p.m.
City Council Chambers, 221 East Main St., Round Rock