Resort Projects in Corpus Christi
Work to Attract Big Spenders

Corpus Christi likes to bill itself as the place Texans go to play. While oil refineries remain a key driver of the area's economy, they have been overshadowed in recent years by its tourism industry, which offers minor league baseball, golf, fishing, boating and beaches to indulge Lone Star State residents' penchant for driving pickups on the sand.

Now, two big resort developments are betting they can help Corpus Christi attract more and bigger-spending visitors -- Texans and non-Texans alike. Both projects are poised to offer luxury in a region traditionally known more for lower-cost tourism and affordable housing. Local officials and developers want to compete with higher-profile destinations -- such as San Antonio, about 150 miles northwest of Corpus Christi, and more costly coastal areas in places like Florida -- by offering more amenities in what some boosters say is one of the nation's last waterfront real-estate bargains.

Newport Beach and Golf, a planned community on 1,400 acres located on Mustang Island, the barrier island just north of the city of Corpus Christi, is already under construction. The project is set to be valued at $4 billion when fully built out, according to the developer. It is slated to include 4,000 residential units -- with condominiums, largely expected to become second homes, starting at around $450,000, and single-family homes as high as $2.5 million -- in addition to as many as four hotels, a marina and two golf courses.

That is a big shift from the many limited-service hotels that dot the region, and steep prices for an area where second-quarter median home prices stood at $138,500, well below the national level of $227,500, according to the National Association of Realtors. Newport Beach and Golf expects to appeal to people from Houston, Austin and San Antonio as well as baby boomers from other areas of the country impressed by the area's mix of natural beauty and comparatively lower prices, says Craig Millard, a Palm Beach, Fla.-based majority partner in Texas Gulf & Harbor Ltd., which is developing the project. "It'll change the dynamics of Corpus Christi significantly," says Mr. Millard.

Corpus Christi got another entertainment venue last year with the opening of Whataburger Field, a minor league baseball park.

Unrelated plans for another resort project on North Padre Island have drawn more attention. Controversy has swirled around the city's decision to ask residents of Corpus Christi next month to vote for an amendment that would be the first step toward closing about a mile and a quarter of beachfront to motorists, which would pave the way for the project. Corpus Christi Mayor Henry Garrett says the move -- which flies in the face of Texas tradition -- is warranted because the development won't move ahead unless it can be assured that four-wheelers aren't part of its four-star beachfront vistas.

The move to pursue more tourism dollars is a conscious effort at diversification that city officials have been pursuing since the region was devastated by the oil bust of the late 1980s. Despite those efforts and higher oil prices, the area's job growth is below the U.S. average, at under 1% in August compared with the year-earlier month, according to the Bureau of Labor Statistics.

Recently, smaller oil-field service companies have helped strengthen the local warehouse market, but the office sector hasn't benefited much, as large oil companies that consolidated white-collar jobs into the Houston area after the last oil downturn never returned, says Chris Adame, commercial appraiser and an associate with Joe Adame & Associates Inc. in Corpus Christi. By contrast, the retail market is expanding as more companies take note of the buying power in the region, home to about 414,000 residents.

One cloud looming on the horizon, particularly for resort projects on the water, is the potential for hurricanes that could threaten the beaches on which Corpus Christi is now pinning its hopes. A spokesman for the Corpus Christi Office of Emergency Management says the region hasn't suffered a severe blow since Hurricane Celia hit in 1970. But that could change, says Jim Lee, an economist with Texas A&M University-Corpus Christi. "We've been lucky," says Mr. Lee.

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