Paul Schexnailder is a major landowner and developer on Upper Padre Island and is a partner in the Schlitterbahn Water Park and Resort. In 1994, Austin-based Schexnailder and the late Bert Williams bought about 1,200 acres on Upper Padre Island with plans to develop the property over the next 10 years.
They purchased the unsold assets of Padre Isles, the Padre Island community of canal-dredged residential and commercial sites. The acquisition included developed and undeveloped lots for single-family houses, multi-family units and businesses.
Schexnailder and his partners have plans to turn Upper Padre Island into the premiere coastal destination in Texas. That destination will include retail stores, restaurants, residential neighborhoods, and multi-family developments. It will also include marinas, hotels and a music pavilion.
Paul Schnexeilder, a developer and major landowner on the Island of Corpus Christi, called Alice and Mike to help him bring an international resort development to Upper Padre Island in the mid-2000s. That project did not take shape but Paul subsequently brought a cutting-edge Schlitterbahn Water Park to Upper Padre Island as part of a master plan for that fast-developing island.
PAUL: Basically, when I look at the Texas coast, there are three areas. There’s the Galveston area, driven by the Houston marketplace. There is the Corpus Christi MSA which is Rockport, Port Aransas, Ingleside, Aransas Pass. And then there’s South Padre. And when I look at those, it’s always interesting. I ask people, name the number one, number two, and number three coastal destinations in the state. And they will, almost without exception, say South Padre Island’s number one. They will say that Galveston’s number two, and then Corpus Christi is number three. When in reality, Galveston gets 40 percent of the total tourist days on the Texas coast. South Padre gets 16 percent and Corpus Christi MSA gets 44 percent, okay? So, it’s always exactly the reverse of what everybody thinks that it really is. Part of that is because when you think of Corpus Christi, you don’t stop to realize that Corpus Christi is made up of Rockport, Aransas Pass, Port Aransas, Ingleside, you know, upper Padre Island and downtown Corpus Christi. Which is if we pushed all those together, we’d be a fairly substantial development by itself. So, our MSA gets a lot more than Galveston does.
Q: That is surprising.
PAUL: Galveston gets a lower percentage of overnight stays, Corpus is the second in terms of length of stay, South Padre Island is the third. It’s first, rather, I’m sorry. The reason for that is when you’re gonna drive all the way to South Padre Island, you’re not gonna drive down there for one overnight stay, you’re not gonna go drive, spend the night, and drive back home the next day. You will do that in Corpus if you’re in San Antonio or Austin, a one day trip is fine, two day trip is fine. Galveston gets a lotta day trips because it’s only 45 minutes from four and a half million people.
Q: That’s fascinating.
PAUL: So, the economics that drive our marketplace are different than, you know, it appears just in your mind’s eye. And a lotta that is because the amount of marketing that South Padre does, that Galveston does.
Q: That makes sense.
PAUL: Yeah, so that’s what takes place.
Q: Where do you get those total tourist days, the CVB?
PAUL: On tourism market?
PAUL: From the state tourists.
Q: It’s in the governor’s office?
PAUL: Right, exactly.
Q: In 99 you approached Jeff about doing a Schlitterbahn, can you tell me how that came about and what your ideas were?
PAUL: Yeah, when we bought the property in 1994, we had economic research associates do a regional tourism study for us to tell us whether or not you could ultimately make a tourist destination out of this area. And of course, they came back and said yes, and gave us the data behind it and all of those things. But what became clear to us was if a beach is all that it takes to create a beach destination, we would already be developed, right? So, it’s real clear that the fact that you have a beach does not make you a destination, it makes you a beach. And so what we learned in that study was let’s say you have to have the things to do that simply didn’t exist in this marketplace. And so we went to Jeff and actually in 97 I guess it was when we first went to him. And the reason that I did was that in my mind, a water park at the beach, though counter-intuitive, was the fact that during the summer when water parks are really opening that there’s a huge ramp up in population of people whose sole purpose is to enjoy the water. Yet we know from studies that they only spend two hours a day at the beach and that they spend most of their time at a swimmin’ pool. So, my conclusion was that why don’t we give them an experience that they’re looking for in freshwater that they like that takes more than two hours a day? But…
Q: He said that they had no plans to expand?
PAUL: Expand it, right.
Q: He said you went to see him all the time.
Q: You kept coming back.
Q: What did you say to him?
PAUL: I told him we need to do this, this works. So anyway, in 1999 what he’s talkin’ about, Corpus Christi or Nueces County commissioner’s court proposed a bond election to open Packery Channel, raise the causeway, and to build what they call a show barn at Robstown, okay? Which is the country fairgrounds, okay? And it was an all or none vote, you either, the thing passed and all three got done or the thing failed and none of them got done. And there was a bias in the city against helping Robstown, so they voted it down, okay? Interestingly enough, after it got voted down, the city workin’ with the state fronted the funds necessary to do raisin’ of the causeway. And then they fronted the bonds necessary for open Packery Channel with the corps of engineers. So, they paid for those two anyway and so the county went ahead and issued certificates of obligation to build a fairgrounds. But instead of buildin’ a 25 million dollar show barn, they build 100 million dollar fairgrounds. [LAUGH] And what’s even more interesting is had they done it the way it was proposed, the refinery’s tax base would have been impacted and the local refiners would have paid 40 percent of the cost of all of it. So [LAUGH] those things played a big… so the fear of that led to Jeff and them goin’ down and takin’ the plans we had developed for here and building South Padre Island. Now, Jeff tells me that it was cause his dad wanted to fish down there and… [LAUGH]
Q: Was there anything you showed him that convinced him? He had a pretty big change of mind.
PAUL: Well, I guess when you’re gonna be real honest with yourself, when somebody comes in and says if you guys will come down here and build this park, you’ll get a third interest ownership and 500 acres.
Q: Is that what he said?
PAUL: That’s what I offered him. I told him I’d put 300 acres in and my ownership in the country club would by the rest of the club and put it in, they would own a third. It’s not often that someone like that gets to ride the real estate values up on the property around them. And they understood that, I mean, they understood it, they know. So, it’s a resort, but in addition, I can’t speak for them, but doesn’t it make sense corporately that if you’ve got the water park in Galveston and you’ve got the water park in South Padre, you probably oughta own the one in Corpus Christi?