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No Company is an Island American General Insurance Corp. Pushes a Padre Island Development BY SCOTT HENSON Raymondville, Austin DRIVING SOUTH on U.S. Highway 77 into Raymondville in Willacy County, you’d never know, except for the occasional imported palm tree, that you were nearing the Texas coast. For nearly 60 miles the road winds between the fences through the cattle and oil wells on the King Ranch. Most beach-goers travel another 60 miles to Cameron County and the developed southern portion of South Padre Island. Despite the glittering expanse of the Laguna Madre sweeping down the coast and South Padre’s desolate wilderness replete with endangered birds and turtles, almost no one stops at Port Mansfield, the county’s only coastal town. People who do stop don’t find much. County officials describe Willacy County population 18,000, plus or minus a few thousand undocumented workers the poorest county in the state. Official unemployment statistics, which do not count non-U.S. citizens, stand at 18 percent. About 30,000 people are unemployed in the four-county area that includes Willacy. Young people leave for jobs and never return. County Judge Eustolio Gonzales says two or three people come by his office every day asking for jobs, or for help paying their utility bills. A Raymondville resident only slightly overstates the politicaleconomic makeup of the county: “Eighty percent of the people here are Hispanic, 20 percent are white, and the whites own everything.” People in Willacy County are desperate for some new kind of industry. Into this picture comes Houston-based American General Insurance Company, with promises of thousands of jobs in a project that will rival EPCOT Center as an international tourist resort. In an area as poor as Willacy County, the project sounds too good to be true. The fact that the proposed project lies near several environmentally sensitive areas makes little difference to most locals in Austin and Washington such issues carry more weight. But before the development begins, the company will lobby for public subsidy at the federal, state, and county levels. It will also raise the ire of environmentalists throughout Texas The Project At the far-eastern edge of the county, Houston-based American General Insurance Company owns 22,000 acres on an undeveloped section of South Padre Island, 9.5 miles across the Laguna Madre from Port Mansfield. American General proposes build ing a $2.5 billion mega-resort called “New Century Habitat,” which it says would create up to 8,000 permanent jobs. The company says high-speed ferries will shuttle 450 passengers at a time across the Laguna. American General began promoting the project in the last half of 1989, when its stock prices were sagging and it was widely considered to be a prominent takeover target. In fact, by the time it went to the federal government, hat in hand, asking for development subsidies in 1990, the company had already fought off one hostile takeover attempt and had put itself up for sale. On May 2, 1990,The Wall Street Journal reported that “American General is likely to remain under pressure to put itself up for sale or take other action to boost its stock price,” because of pressure American General ad mits its project will impact the piping plover but argues that other habitat on the island “may be enhanced to offset ‘ such a loss.” from institutional investors. But the company may never build the proposed resort even when it emerges from its immediate financial problems. On February 14, 1991, Dick Ingram who boards of the Gulf Coast Conservation Association and is American General’s lobbyist at the Legislature wrote to Walter Fondren of the GCCA to dispel any appearance of conflict of interest. The letter, distributed to the Austin GCCA board, declared that “American General is not a resort developer and does not intend to build a resort On South Padre Island.” Ingram resigned April 4 from the Austin GCCA board. He did not return the Observer’s phone calls. That statement corresponds with comments made by Dan Nicholas vice-president of American Investment, the subsidiary in charge of the project who went to great lengths to explain that American General did not have a “plan” for the project, it had a “concept.” That “concept,” Nicholas said, is “our interpretation of what the market wants based on worldwide research.” Nicholas said American General would not develop the project without at least one partner and probably several. He would not commit to saying American General would put its own money into the project, but said the company would “contact leaders of [the resort] industry worldwide” to seek out partners. He has found none to date. Old Habitat for a New Century American General’s consulting firm, Shiner and Moseley, produced a document entitled “Preliminary Overview: A New Century Habitat.” Nicholas told the Observer to rely on this as the company’s official statement about its development “concept.” Currently, according to the Overview, seven threatened or endangered species live on various parts of the proposed project site. Four are birds: Peregrine falcon, Piping Plover, Brown Pelican, and Interior Least Tern. And three are turtles: Kemps Ridley, Loggerhead, and Green Sea turtles. The document says in particular that the “feeding habitat of the Piping Plover within the 3,000 acre site will potentially … cause a significant impact.” About one-fourth of 3,500 surviving piping plovers nest in the Lower Laguna Madre area, and half of those are located right at the Mansfield Cut, where the development would be built, according to a U.S. Fish and Wildlife Service survey in January. Steve Thompson, manager of the Laguna Atascosa National. Wildlife Refuge, told the Harlingen Valley Morning Star that loss of nesting habitat is the main cause of the piping plover’s declining numbers. American General admits its project will impact the piping plover but argues that other habitat on the island “may be enhanced to offset such a loss.” Environmentalists worry that trying to “enhance” the natural habitat of an endangered species could lead to its extinction. In addition to endangered species, the proximity of the development to the Laguna Madre worries environmentalists. The Laguna Madre is one of three hypersaline lagoons in the world the other two are in Mexico and the Soviet Union. Within the clear water, averaging about 2-1/2 feet deep, the handful of species of shellfish and fish that can survive in the salty brine, flourish.. The laguna is Texas’s last unspoiled coastal sanctuary. An appendix to the Overview discusses a plan by which treated wastewater “will go into a series of brackish lakes/ponds from which it can be pumped onto the golf course for irrigation. When not needed for irrigation, this treated water will flow by gravity through the pond system and into the lagoons which are connected to the Mansfield Channel,” which connects the Laguna Madre and the Gulf of 6 APRIL 19, 1991