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HSB's PAST, PRESENT & FUTURE.  

HSB:  Historical Accounts & Thoughts on Its Future Growth.
By Ken G. Martin

HSB got its first newspaper, The Beacon, during the fall of 2005.  This series began running in the paper’s issue of July 13, 2007.  The subtitles of the articles, their dates of publication, followed by the actual article are listed below in chronological order.


1) WHERE IS
HORSESHOE BAY (“HSB”) HEADED?  7/13/06.
                    
2) COMPARING HSB AND SEDONA:  7/20/06.

3) HSB’s UNIMAGINABLE RISE, 1971 – 1985:   7/27/06.

4) HSB’s EVEN MORE UNIMAGIABLE FALL, 1986 – 1996:  8/10/06.

5) HSB’s REBOUND – 1996 to 2006:  8/17/06.

6) HSB + LAKE LBJ = ONE OF A KIND!  8/24/06.

7) HSB’s NEW MOMENTUM – Part 1:  8/31/06.

8) HSB’s NEW MOMENTUM – Part 2:  9/7/06.

9) THE HSB TRIANGLE:  $2+ Billion of Planned Growth Since 2000.  Part 1:  9/14/06.

10) THE HSB TRIANGLE:  $2+ Billion of Planned Growth Since 2000.  Part 2:  9/21/06.

11) THE HSB TRIANGLE: $2+ Billion of Planned Growth Since 2000.  Part 3:  9/28/06.

12) RELOOKING AT THE SEDONA-HSB COMPARISON:  10/5/06.

13) OUR AREA RANKED #3 IN U.S.’ TOP-18 EMERGING GOLF RETIREMENT REGIONS:
  12/7/06.

14) CRUDE OIL PRICE WATCH:  12/14/06.

15) HOW HSB’s GOLF RANKS – STATEWIDE & NATIONALLY:
  12/21/06.

16) BASED ON FORTUNE’S FINDINGS, HSB AIN’T SEEN NOTHING YET!  12/28/06.

17) LOOKING BACK TO 1/1/86:  HSB Ranked with America’s Most Elite.  1/4/07.

18) WHY HSB’s SETTING IS ESPECIALLY SPECIAL:  A Perfect Collection of Extraordinary 
       Features!  1/11/07.   

19) ESCONDIDO:  A MAGNIFICENT ADDITION TO HSB!  1/18/07.

20) OIL PRICES DROP BELOW $50 PER BARREL.  What’s Up?  1/25/07.

21) HSB:  GOING FROM THE BEST IN TEXAS TO THE BEST IN AMERICA.  2/22/07.

22) HSB FACTS EVERYONE SHOULD KNOW - (Part 1).  3/22/07.

23) HSB FACTS EVERYONE SHOULD KNOW - (Part 2). 3/29/07.

24) WON’T YOU HE’P ME? – 5/3/07.

25) HSB RESORT SIGNS #1 PICK:  G. Michael Thomas.  5/10-07.

26) MARBLE FALLS’ MAIN STREET – from lemon to Lemonade!  5/17/07.


1) WHERE IS HORSESHOE BAY (“HSB”) HEADED?

After the stock market crash began in March of 2000, investors left the market in droves in search of “better” investments.   Several very strong investors have found their way to HSB and consider it exceptionally attractive.  Projects either planned, underway or completed since March of 2000 involve expenditures totaling more than $2,000,000,000, assuming all are eventually completely built out.

The Beacon, aware of the situation,has arranged for a Series focused on exploring the question of where HSB is headed.   For purposes of discussion, the HSB area will include lands within the“triangle” formed by Texas 71, US 281, the Colorado River and Sandy Creek.The Series will be run under the captioned heading, as some important experts think we may end up being most like Sedona.   We’ll take a look at Sedona next week.

By and large, the investors as a group believe HSB is primed to attain the next level in the not too distant future.  They are in here with hundreds of millions of investment dollars, looking for opportunities to help lift HSB’s offerings to match if not in some instances exceed those of America’s other world class communities.

We’ll look into why more people are now seeing what Norman and Wayne Hurd recognized 35 years ago – that HSB.is truly capable of being a world-class music-art-cultural-recreational destination.  And we’ll examine the development plans designed to get us there while exploring what HSB’s profile might look like by 2020.

Whatever HSB’s destiny may be – whether the likes of a Sedona, Jackson Hole, Santa Fe/Taos, Scottsdale/Carefree, Aspen/Vail, Carmel, Palm Springs, et cetera, or some mix thereof - we’ll examine all possibilities and where they may take us – hand-in-hand with Marble Falls.

The two communities, connected as they are at the hip, will hopefully always walk hand-in-hand.  We need each other to become the focal point of a truly world class area – “for a Weekend or a Lifetime.”

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2) COMPARING HSB AND SEDONA.

Sedona is one of Arizona’s most appealing and upscale communities.   It is located in the heart of Red Rock country - 120 miles north of Phoenix, 30 miles south of Flagstaff.  Oak Creek, an intermittent stream, including its beautifully picturesque red-walled sandstone canyon, with spiritual appeal dating back to pre-historic Indians, is Sedona’s principal attraction.

Sedona, a charming early stagecoach stop, got its first Post Office and took the name Sedona in 1902.  It grew slowly but steadily thereafter as a rural ranching community.  A visionary named Husberg started a gallery there in the early1970s, featuring some of America’s best Western artists. 

His gallery became the initial driving force behind today’s nationwide interest in Western art.  The Cowboy Artists of America organization, to which all Western artists seem to aspire and which has its national museum in Kerrville, was founded at his gallery.  Husberg left an indelible impact on Sedona. 

As late as 1980, Sedona remained a relatively sleepy town, confined largely by the canyon’s 10-12 square mile area.  The main road thru town at the time still had no stop lights and was a mere two lanes – like HSB today.

Sedona incorporated in 1988, 17 years before HSB.  By the time HSB incorporated in 2005, Sedona had secured its position on the world map - a uniquely defined, world-class destination with 10,400 residents, four times more than HSB. 

Like Sedona, HSB also grew from a rural ranching area, and like Sedona, has its own red rocks.  Whereas Sedona’s were flat-lying, tectonically undisturbed sandstones; HSB’s were heavily folded, tectonically disturbed granites.

The white man got an earlier start in HSB.  But unlike Sedona, it did not grow steadily.  In fact, what is now HSB hardly grew at all - for a century or more, until the Hurds broke ground in 1971. 

HSB did get its first Post Office in 1878 - 24 years before Sedona did and 15 years before the founding of Marble Falls.  The post office was located at Tiger Mill, on Tiger Creek in what is now HSB South. The mill is better known by HSB history buffs as the home site of Conrad Fuchs, the first postmaster. 

Fuchs’ home - still standing on what is now Stagecoach Drive - together with Fuchs’ long gone adjacent mill, was a stage stop between Willow City and Burnet.  Marble Falls, favored by being on the Colorado River,proved to the more enduring location.

HSB and Sedona have so much in common.  Both areas have similar fauna and foliage, though of slightly differing varieties, and both have loads of charm.  Both areas were also considered spiritual – and heavily favored by the Indians.

Both are situated in extraordinarily appealing Sunbelt settings and both are known today as resort, retirement and recreational meccas - playgrounds for archaeology, geology, history, and recreational enthusiasts.  Both have major recreational attractions nearby and both are located in unique geological areas.   However, whereas HSB’s geology is very complex and covers a period of some 1,670 million years, Sedona’s geology is exceptional simple, exposing only about 50 million years of geologic history.

Sedona has its expansive Coconino National Forest for hiking, horseback riding, and cycling.  Unfortunately, much of Sedona’s breathtaking Oak Creek Canyon, it premier natural attraction, was engulfed and badly damaged by the recent major wildfire that came out of the forest.

HSB has its incomparable Lake LBJ, America’s largest constant-level lake, and is the wonderful Texas Hill Country’s brightest jewel.  HSB is ideal for fishing and water sports, and the immediate area is a big draw for cycling.  

Sedona differs today principally in having become an important Western art and movie producing center.  HSB/Marble Falls has cultural aspirations of its own.  It is already recognized as having the Hill Country’s best theatrical stage, best music stage, and is its live-music capital.  Our immediate area is
loaded with exceptional talent, and home to true believers.  Expect much more. 

Sedona‘s is noted for its southwestern architecture, and it is in remarkable harmony with its setting.  HSB’s architecture needs updating and direction.  The Resort and HSB’s new City Council are currently working together on this - hand-in-hand in priority fashion.

Sedona has fine shopping and interesting night life.  HSB/Marble Falls has comparative little of each, but like in other supply-demand situations, that is being dealt with.  We will have more than our fair share of both real soon.  Many investors/retailers are maneuvering to fill the gap.
                                                                                                                                                                         
HSB has three huge plusses going for it – Lake LBJ, its Robert Trent Jones Sr. golf complex, the country’s largest, and its central Texas location.  Whereas HSB differs in being situated along the shore of America’s lake of choice, Sedona thirsts for water.  Whereas HSB has its three Jones Sr. courses, Sedona has one - built jointly by Sr. and his son, Jr.

Whereas HSB is within 3½ hours driving time of five of America’s 19 largest cities, Sedona differs in being 3½ hours driving time from only one – Phoenix, two hours distant.  The six referenced cities are: Houston #4, Phoenix #6, San Antonio #7, Dallas #9, Austin #16 and Fort Worth #19.

And even though HSB’s golf is already among the country’s very best, HSB will soon have more world-class golf.  Escondido’s Tom Fazio Signature Course holds its Grand Opening over the upcoming Labor Day weekend.  That huge new boost when will be followed by another - a Jack Nicklaus Signature Course at HSB’s Bayplace.  This long-delayed course is now a certainty for a late 2008 or early 2009 opening.

As you will continue to see, HSB stacks up exceptionally well against Sedona and the likes, if not much better in several aspects.  As we get on with examining where HSB stands on the stage of world-class destinations, and where it is heading, next week we’ll explore the possibility that HSB and Lake LBJ collectively amount to a truly unmatchable, one-of-a-kind combination.  We’ll also look at the possibility that the Hurds had HSB at world-class levels upon the completion of its Applerock Golf Course in 1986 - just as the crash of the late 1980s began to overwhelm HSB, and before the rest of the world had a chance to know HSB was possibly that great.

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3) HSB’s UNIMAGINABLE RISE, 1971 – 1985.

Differing from Sedona, HSB’s raw natural beauty was not magnificently concentrated in a 10-mile long canyon cut into Arizona’s high Mogollon Plateau.  HSB’s ultimate location, along a flood-prone river at the northern rock-strewn edge of the Texas Hill County, had almost no chance of being a world class destination without unimaginable help.  While relatively appealing, it was nothing special, considering there were many hundreds of miles of similar terrain in central Texas.

The help came through a series of fortuitous breaks, as follows:  1) America’s lake of choice, Lake LBJ, completed in 1958; 2)  the 3,000 acre Coke Ranch, located on the best portion of Lake LBJ; 3) the Coke Ranch not being sold off piecemeal to Tom, Dick and Harry; 4) the Hurds acquisition of the whole ranch in 1971, after eight years of negotiations; 5) the Hurds having such wonderful vision; 6) the Hurds having the “smarts” to make it happen; and 7) the Arab (i.e., Islamic militants’) Embargo, which precipitated an “oil boom” lasting from 1973 through 1985. 

This prior up-cycle in the price of oil and natural gas was the industry’s last before the present one began in 2003.  Whereas the current up-cycle has grown slowly from a 1999 bottom, the prior one began abruptly with the Arab Embargo, which occurred in late 1973, just as HSB was coming out of the ground. 

By the end of 1974, oil prices had quadrupled.  It gave HSB a jump-start.  Flush with cash, Texas’ oilmen were descending on the exciting new development in droves.

Whereas HSB was “goat pasture” in 1971, Sedona had grown on its own natural merit to being recognized as a potentially world class destination.  By 1974, after a mere three years of work, the Hurds had served notice of their capabilities, making every effort to put HSB on the map – and with
great success. 

They had gained a lot of ground on Sedona and the likes.  And they had made up an amazing amount of time, considering they were a century behind when they broke ground in 1971.

As 1986 began, fifteen years into their project, the Hurds had HSB fully primed.  HSB now had three Robert Trent Jones Sr. golf courses.  Ramrock, which remains today as the state’s most “respected” course, had been completed in 1981.  Applerock had just opened in 1985.  Golf Digest ranked Applerock the country’s Best New Resort Course for that year.

Robert Trent Jones Sr, was widely recognized as the world’s best golf course architect.  HSB was basking in glory - being home to Jones’ finest golfing complex in the country.  HSB’s fabulously charming Inns; Yacht Club and Conference Center; Swimming/Diving Pool with one-of-a-kind, hot tub-whirl pool spa; Beach; Marina; Equestrian Center; Tennis Center; and Oriental Gardens had come together as a practically unmatchable first class package. 

On top of that, HSB was located on the shore of Lake LBJ, America’s lake of choice, and had the finest private airport in the nation, capable of landing practically any passenger plane flying.  Those who visited HSB departed knowing they had experienced something exceptional and extraordinary! 

It was more than a match for San Diego’s LA Costa, home to the PGA tour’s leading money winner’s Player’s Championship, put on annually by MONY – Mutual of New York.  It had far more to offer than the rugged scenery of quaint Jackson Hole, then a mere arts and crafts center built around a town square, basically open for only four months each year.- mid-May to mid-September.  And it had marched past Sedona, which like most other popular areas, had stood still through the run up in oil prices that set back the rest of the country for so long.

The Hurds’ vision had been proven absolutely, positively correct and they had executed their plan to perfection.  HSB was becoming the talk of the Texas, with word beginning to spill out across the country.

And what an appealing location!  It was in central Texas, in the Hill Country, on the Highland Lakes, an easy drive from several of the country’s biggest cities – Austin, Dallas, Fort Worth, Houston, Midland/Odessa (big in importance), and San Antonio.

In a mere 15-year period, the Hurds had built HSB to the ranks of world-class recognition.  HSB had arrived.  Absolutely amazing - positively! 

It was there – for the moment.   Just as HSB reached the top rung of the ladder, world oil prices collapsed, abruptly.  HSB would fall from the top perch before many people even knew it got there! 

HSB’s fate, and practically everything else in the oil patch, turned downward on a dime in 1986. Unimaginably, it was on its way into a deep, ugly, decade-long depression.  For the country’s oil-patch states - Texas, Oklahoma and Louisiana - it was to be the twentieth century’s second worst.

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4) HSB’s EVEN MORE UNIMAGIABLE FALL - 1986 to 1996.

Last week, we discussed HSB's unimaginable rise from its 1971 beginning through 1985.  Beginning in 1973 and lasting until1986, a large portion of the exceptional growth and prosperity experienced throughout the country’s “oil-patch states” – Texas, Oklahoma and Louisiana – came at the expense of the rest of the country.  The country’s economy had been heavily damaged by the high prices paid for oil and natural gas coming out of these three states during the 13-year period.  While HSB was growing wildly during the period, assisted by this rising tide, the likes of Sedona, Jackson Hole and practically everywhere else outside the oil patch were growing far slower, if at all, burdened by a falling tide.

But the militant-Islamic induced oil boom collapsed in 1986, which we now know in hind site should not have been a surprise.  It was contrived - never supported by supply-demand factors, as today’s oil boom is.  The bottom finally fell out in 1986 as supply overwhelmed demand.  The falling tide would take HSB down.

The price of free-market crude oil dropped 75% from the boom’s peak.  The price of free-market natural gas fell even more - as much as 90%. 

Economies of the country’s principle oil patch states collapsed in tandem.  Drilling came to an abrupt end and development activity in HSB and elsewhere across the oil patch ground to a halt.  What had gone around had come around!

The economies of these states were so tied to the price of oil that their citizens soon found out they were all in the oil business – like it or not.  Jobs evaporated.  Bills didn’t get paid.  In short, lay offs hit all sectors.  People and businesses went broke in record numbers.

Doctors, lawyers, builders, realtors, developers, car dealers, retailers, hospitals, clinics, office building and apartment owners, big banks, small banks, savings and loans, and the like were all seriously affected.  Everyone got hurt - BADLY HURT!

There was every reason for people to move from the oil patch!  There was no reason for people to move in!!!

Housing prices crashed in every city throughout the three-state area, dropping 50% across the board as a laid-off populace, unable to find new work, moved out, looking elsewhere for survival.  Thousands of other homes were abandoned, with ownership reverting back to the lenders, most all of whom would soon fail as well, weighed down by the defaults.   

By 1990, people coming in to HSB from Marble Falls remember being greeted along RR 2147 by boarded up, half-completed lakefront projects.  Whether they were single-family homes or multi-family condos/townhouses made no difference.  There were takers for neither.  Little if anything good was happening.  Vehicular traffic on RR 2147 was a mere tenth of what it is today, if that much.  And very few of the vehicles were late-models. 

HSB’s developers were fighting for their lives – all looking at possible bankruptcy, with many soon to be mired deeply in it.  HSB recreational, resort-oriented real estate, being largely second homes and therefore relatively expendable, was available at fire-sale prices.  Instead of selling for 50% discounts that prevailed across the oil-patch for primary homes, HSB’s second homes and undeveloped waterfront lots, for which there was hardly any demand, could be bought as late as early 1994 for as little as five to 10% of today’s values.

HSB had lost its momentum.  It had fallen from the national scene and was being forgotten - rapidly.  HSB Resort’s golf bag-tags took on the slogan:  “Horseshoe Bay - Texas’ Best Kept Secret!”

Helping HSB absorb its late1980s crash – HSB’s first and most serious crisis - was a man from San Antonio who had become intensely infatuated with HSB some 30 years ago.  He demonstrated his early love for HSB by building his home on Applehead Island in 1985, being the first to build on the island. 

He had made a nice early fortune outfitting and trading jet planes and has been instrumental in helping HSB regain its footing on every occasion since then.  He continues today as a big-time name in the business of outfitting and trading jet planes.

Fortunately for HSB, Douglas Jaffe, Jr’s belief in HSB has been Hurdian-like as well.  That belief led him to begin acquiring some of HSB’s choice properties that became available during HSB’s bottoming period and eventually led him to become the Resort’s owner when he bought out Norman Hurd’s interest in 1996.

Next week, we’ll learn that although HSB had bottomed, enduring the oil-patch states’ second worst depression of the 20th century, two additional much lesser but nevertheless painful 21st century downturns were heading its way.  In spite of still being in a weakened state, HSB obviously absorbed all three setbacks – rebounding from the oil crash while surviving the two additional hits that were forthcoming and doing very well today, thank you.

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5) HSB’s REBOUND – 1996 to 2006.

Last week, we discussed HSB’s unimaginable fall, beginning in 1986, after having just achieved the ranks of world class.  The fall came on the heels of a collapse in world oil prices, which produced a painful depression throughout America’s oil patch, dominated by the states of Texas, Oklahoma and Louisiana.  The 1986 to1996 period was a decade where HSB focused on survival.

We also learned how HSB was fortunate that Douglas Jaffe, Jr’s belief in HSB was Hurdian-like.  We examined how that belief caused him to be the first to build on Applehead Island and led him to begin acquiring some of HSB’s choice properties during HSB’s bottoming period.  It eventually led him to top, becoming the Resort’s owner in 1996, when he bought out Norman Hurd’s interest.

In addition to being of major importance in seeing HSB through the depression brought on by the oil industry’s crash, Doug Jaffe would take on HSB’s crises of 2000 and 2001 practically by himself, with the able assistance of Ron Mitchell. 

For the past 30 or so years, Mitchell has been a major factor in assisting Norman Hurd and later Jaffe implement their basically similar world-class visions for the Resort, being its President for most of the period.  Doug has him working today, hand in hand with the HSB City Council, on major additions to the Resort’s core amenities at Caprock and along the HSB Boulevard corridor between RR 2147 to the Yacht Club, including major changes to the existing Marina.

In addition, Ron has worked endlessly to help build a strong positive relationship between HSB and Marble Falls.  Leaders in the two communities work well together and are very much in step.  His success is made apparent by the great appreciation bestowed on him by the city of Marble Falls, which over the years has given him practically every Outstanding Citizen Award it offers.

HSB’s second crisis was the least damaging of the three.  The steady rise in values coming off the 1990 bottom ended in late 2000, prompted by the stock market’s crash beginning that March.  The rise in values between 1990 and 2000 occurred largely without help from the oil business, which remained in a cyclical bottom throughout the period.  The oil guys were in no position to contribute.  However, high-end tech players, who had gotten flush during the stock market’s huge rise of the late 1990s, provided important support.    

The tech guys had been riding high exercising stock options, but their wealth evaporated quickly as their stock holdings crashed.  They pulled out of HSB as their wealth fell from “X” to a mere fraction of “X”.  

Once again, times had changed.  With them out of the picture and the oil business still struggling to get off bottom, HSB’s real estate prices peaked in October 2000 in the face of substantially reduced demand. 

HSB’s third crisis - its second depression – began to negatively impact HSB mere seconds after the World Trade Towers went down on 9/11.  The Islamic militants, who struck us with a quadrupling of oil prices during their Arab Oil Embargo of 1973 and hit us again with another doubling of prices following overthrow of the Shaw during their Iranian Revolution in 1979, had gotten to America again.  That infamous day, 9/11/2001, sent the resort and travel business into a deep tailspin - worldwide. 

HSB’s Conference Center and Corporate Outings business screeched to a halt.  The Resort hunkered down like never before.  Practically nothing was getting done or happening in the country in the exceptionally depressed resort and travel business, except retrenchment.

Worse yet, HSB Resort’s much needed new project - the Marriott Hotel, which was about to get underway, was forced to go on hold.  It would not restart for another 18 months.  Getting it restarted so quickly, as Jaffe did late in the second quarter of 2003 while the resort ad travel business was so hung-over, doing nothing new, was practically a miracle – proof positive of Jaffe’s capability.  Besides demonstrating this great strength, completing it just as the depression was ending demonstrated great timing.

With HSB already stressed by the stock market’s crash, 9/11 sent HSB’s real estate into a depression.  Though local real estate values stayed depressed through most of 2004, the depression proved much milder and much shorter than the one that began in 1986.  9/11 magnified the decline in values that began a year earlier and became the driving force behind a marked slowdown that overhung HSB until the Marriott opened in early October 2004.

Putting big deals together, which HSB will need to remain viable, as learned during the 1986 to 1996 downturn,  comes with great risk, requiring a mix of great talent, planning and good fortune – nothing less.  Building a successful major hotel in such a depressed period as Jaffe did was a rare and significant accomplishment – a major boost of the highest order for HSB’s future well being! 

Other developers were not as successful.  HSB’s Bayplace, also scheduled to get underway around this time, failed like most other similar projects planned for the period, in spite of being in the hands and under the direction of wealthy and well-connected Austin developer James Schneider - Dell’s Chief Financial Officer. 

Using HSB’s full-size, undeveloped lakefront lot sales as a measure of the falloff, sales of these lots, for which demand is traditionally the strongest and where supply is far and away the tightest among HSB’s various categories of real estate, dropped perceptibly.   During 2000, there were around 40 sales of undeveloped lakefront lots - twice HSB’s historical average of 20 per year.  However, sales dropped to a mere 11 in 2001, and remained at 11 sales per year during 2002 and 2003. 

Lakefront lot sales increased to 24 in 2004, but the increase was not accompanied by a corresponding rise in price.  It was more an exercise of moving lots from weak hands to strong hands at depressed prices.   For example, the average sale price of a full-size HSB lakefront lot was $292,400 in 2002, $266,300 in 2003 and $283,100 in 2004. 

When sales picked up to 34 in 2005, prices rose as well, with the average price finally showing an increase - to $428,000 per lot.  Sales grew even stronger during the first half of 2006, running at a pace of about one sale per week.  As supply continued to diminish, lot prices continued to increased, averaging $678,000 per sale during the past six-month period.  Texas oilmen, benefiting from strengthening oil and natural gas prices, have been the principal buyers during the upturn, which began once their operations turned profitable.

However, as strong as these HSB Proper and HSB West prices may seem, they pale in comparison to what’s happening at Lago Escondido, the 27-acre granite knob located just upstream from Applehead Island, reachable off Apache Tears.  This new development, a sister of Brady Oman’s Escondido’s, with equal privileges, is getting prices almost three times higher, averaging around $1,900,000 for its full-size lakefront lots.  Once again, the buyers were mainly Texas oilmen.

Going forward, there are only nine full-size undeveloped lots available for sale without extraneous conditions on the HSB Proper and HSB West lakefronts – only two of these is located in Proper.  Their average asking price is $1,021,000 per lot.

Going into more detail, six lakefront homes were sold/contracted for in the $2,000,000+ price range during the first half of 2006, more than during the entire prior 35-year history of HSB.  And who were the principal buyers?  You guessed it – Texas oilmen!

There are now six others on the HSB market, priced from $2,150,000 to $6,250,000, averaging $4.43 million.  This average asking price is $430,000 more than the highest price paid to date for a HSB lakefront home. 

The price per square foot of living area for the six offerings ranges from a low of $600 to a high of $1,165, averaging $890.  One of the homes is new; the other five average being 7.6 years old.

Going to the larger picture, there are probably 100 or so homes on today’s HSB lakefront that would sell for more than $2,000,000.  It was less than four years ago, in December 2002, that HSB’s first lakefront home sale broke through the $2,000,000 ceiling. 

By contrast, there has never been a HSB home located off the lakefront sell for more than $2 million.  The highest price paid for an off water home to date is $1,400,000.

Examining HSB’s recent rebound by looking at sales from another angle, combined sales of all lakefront sales (homes and lots) totaled $2,396,600 during 2003, $6,795,000 during 2004 and $15,405,650 during 2005.  The value of total sales closed on HSB’s lakefront during 2005 was 6.43 times greater than those consummated in 2003.

And looking at the issue from a third angle, we see that while total sales on the lakefront were booming, golf course sales were in a depression.  During that same three-year period, 2003 through 2005, as total lakefront sales volume increased 543 percent, HSB’s golf course lot sales volume actually decreased 3.5 percent. 

For example, total golf course lots sales went from $1,292,650 in 2003 to $804,000 in 2004, then back up only to $1,249,250 in 2005 – a $43,400 decline in annual sales over the three-year period.  The disparity, when compared with HSB’s lakefront sales, is a direct function of supply-demand differences.  HSB’s supply of golf course lots, while now beginning to tighten, remained healthy at the time, whereas HSB’s supply of lakefront lots was already tight. 

In summary, HSB residents can take comfort and pride in having its Resort in the hands of leadership strong enough to survive and overcome three major financial debacles of outside origin.  They were serious hurdles, strong enough to take many of America’s lesser developments all the way down – to bankruptcy. 

Having such strong and healthy leadership is imperative to the well-being of a Resort community like ours.  Similarly, it is wonderful that both the community and Resort have apparently similar goals of moving HSB ahead as a classy, upscale, multi-dimensional cultural and recreational center, featuring the best quality of life possible anywhere – great music, theater, art, shopping, health care and the like – while retaining our local heritage, and its laid back and friendly life style.  

Next week, we’ll look at HSB’s new momentum, which exceeds anything in its past history, save possibly for when the Hurds were focused on getting the Resort up and running, and on its unimaginably swift trip to world-class stature, which the Resort attained briefly in the mid-1980s – before the Oil Crash.

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6) HSB + LAKE LBJ = ONE OF A KIND!

Last week, we talked about HSB’s decade of rebound, from 1996 to 2006, which followed a decade of pain that began with the collapse of the oil industry in 1986.  We also got into some of the major commitments among the $2+ billion made in the HSB triangle since the stock market crash began in March of 2000.  Before getting further into that, and where the new momentum may be taking us, which we’ll get back into next week, let’s pause to reflect on the single most important element of all.

Few people realize the HSB-Lake LBJ combination is so unique that it is truly unmatchable!  Although HSB is probably best known for its three fabulous Robert Trent Jones Sr. golf courses, the country’s largest Jones’ complex, and the Resort’s other exceptional amenities, most people don't realize HSB’s lakefront is world class as well, being so unmatchable in its lower portion where HSB is located, that it serves to separate HSB from all competitors.
And how could that be?  Hell, there are six lakes here on the Colorado River alone, and two are larger than Lake LBJ.  The country is full of made-made lakes.  You wouldn’t pull a guy’s leg, would you?

Well, it’s like this.  Although Lake LBJ might at first glance look no different, it is actually singularly unique and extraordinarily special.  The 21-mile-long lake, more than two miles wide at HSB, is America’s largest constant level lake - an incomparable, one-of-a-kind body of fresh water.
This is made possible because it is bounded and protected by major flood-control lakes - Lake Buchanan upstream and Lake Travis downstream.  Lake LBJ’s constant level can be maintained during dry periods by letting water flow in from Lake Buchanan.  During wet periods, its constant level can be maintained by dumping excess water downstream into Lake Travis.

It is also made possible for another lesser understood fact.  Those who have traveled America's major rivers learn that the Corps of Engineers operate practically all lakes on our country’s principal rivers and that the United States Congress mandates that Corps-managed lakes be operated as flood control lakes to reduce possibilities of damaging floods. 

To minimizing river flooding, the Corps drops winter-time lake levels substantially to catch spring runoffs.  Corps-operated lakes are therefore not constant-level lakes.
Lake LBJ, completed in 1952, is one of six man-made lakes built on Texas’ Colorado River.  This chain of lakes is known as the Highland Lakes of central Texas.  The Highland Lakes are operated by the Lower Colorado River Authority (www.lcra.org), not the Corps of Engineers. 

Lake LBJ differs in being simply a "pass-through" lake - passing water from Lake Buchanan downstream to Lake Travis.  Lake LBJ is in this manner replenished daily by the ever-flowing Colorado River and, accordingly, holds some of the cleanest and freshest waters among our nation's lakes. 
By utilizing these large adjoining lakes for balancing purposes, LCRA maintains HSB's lakefront at an 825' pool level.  Accordingly, during the worst of times, such as FEMA's anticipated 100-year flood, HSB's lakefront is projected to rise only 2.9 feet.  

Since no larger lakefront is reportedly maintained at such a constant level anywhere in the world (confirm by searching www.google.com for "constant level lake"), now you know the rest of the story.  HSB's waterfront is America’s - if not the world’s - Premier Lakefront!  Add to this the Resort's world-class golf and other amenities, and the Texas Hill Country's incomparable charm, and viola . . . you have The Ultimate in Waterfront Living!!! 

Sizable constant level lakes are rare because large lakes are more difficult to maintain at constant levels, requiring ever larger up and down-stream lakes for balancing purposes.  Most constant level lakes are therefore small and pond-like, and lack the attractive recreational components large lakes offer.  Lake LBJ offers the best of both.

In the early 1970s, LCRA saw potential commercial benefits from Lake LBJ’s constant level and built the Ferguson natural-gas fueled power plant on the lake at HSB.  It positioned the facility at lake's edge so LBJ's waters could cool the facility's generators.  The plant is now one of LCRA's important revenue sources and it can’t operate unless the lake is closely maintained at its normal 825’ level.

Today, LCRA's Ferguson Power Plant and several thousand upscale lakeside homes built subsequent thereto on the constant-level portion of Lake LBJ represent investments collectively valued at over a billion dollars.  Consequently, it doesn’t take rocket-scientist smarts to realize LCRA must take every step possible to maintain the lake at its 825' pool level. 

And LCRA seems determined to do so by constantly improving its capability to maintain the pool at the 825’ level.  In recent years, it has substantially hardened and strengthened Wirtz Dam’s foundations, it has greatly enhanced its flood gate lift capabilities, reducing the time needed to fully open the flood gates by nine-fold. 
LCRA has also established its Hydro-met system.  It consists of 200 monitoring gauges deployed at key locations throughout the river basin, which gives Lake LBJ’s flood-gate operators advanced notice of basin rainfall, including the amount and timing of runoff heading to the lake. 

These and other improvements have increased LCRA’s capacity to maintain Lake LBJ at the 825' level since the projected 2.9 foot rise per 100-year flood was established, suggesting that an even lesser rise might be likely today.  However, the narrow, upper reaches of Lake LBJ – many miles upstream of HSB, where the channel/flood plain is much narrower, with less capacity to hold rising water - are still predicted to rise several more feet than HSB’s long-established projected 100-year-flood rise of 2.9 feet.

Therefore, unlike other large lakes with fluctuating levels, Lake LBJ lets us get especially up-close and personal with it.  HSB's fashionable lakefront homes are accordingly nestled against its shoreline in Venice-like fashion.  We build our homes as close as four feet above the tranquil Lake's constant level, directly on or hanging out over its shoreline, and enjoy having our boat houses and docks under this same roof, enabling unparalleled lakeside treats. 

This intimate lakeside setting provides:  1) recreational fishing, ski or pleasure jaunts on your readily accessible, dockside  boat and/or personal watercraft at the slightest whim;  2) impromptu tournament-quality fishing in delightfully breezy shade from this same dock;  3) boating to your choice of five nearby lakeside restaurants;  4) swimming in the Lake's pristine waters on a moment's notice;  5) having your own, personal lakeside beach;  6) helping your kids/grandkids "master" their water trampoline and other water toys anchored immediately dockside under your watchful eye;  7) an up-close look at nature, such as mothering your own, year-round personal family of native Mallard ducks from your lakeside porch/deck; and  8) wholesome, mesmerizing relaxation as you relish: a) the sound of Lake LBJ's gentle waves breaking softly against the shoreline; b) our prevailing and pleasantly dry lakeside breeze; and c) our enchanting, mosquito-free evenings - all from your dockside porch/deck swing. 

Now you understand why Lake LBJ is America’s lake of choice for those who know.  Where else can all this be had in such up-close and personal fashion - free from the danger of hurricanes?  Nowhere, if Google’s search engine is as good as represented.  Considering there is seemingly no other lake like LBJ - not just in America, but in the world – and considering that HSB has the finest golfing complex ever built by Robert Trent Jones Sr., one of America’s most acclaimed golf course architects, then it clearly follows that:  HSB + Lake LBJ = one-of-a-kind, a truly unmatchable combination.

Next week, we’ll get back to examining HSB’s new momentum and where the multitude of new plans, which amount to $2,000,000,000+ worth of new projects when fully built out,may take HSB by 2020.

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