Artist's rendition of Fairmont hotel
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The rumor is hot that Doug Manchester is not going ahead with his 1035-room, $350-million hotel in Austin, Texas. I could not get confirmation from Manchester or the owner of the property.

The groundbreaking has been delayed many months. Two days ago, the architect, Todd Runkle of the Austin office of the big Gensler architectural firm, said he believed ground would be broken in May. The last date batted around publicly was November of last year. Runkle claimed he had not heard that Manchester is out, but when I called today (March 13), he was on vacation and not reachable, and neither the Austin office nor the headquarters of Gensler could confirm the rumor.

The rumor has legs because it is logical. If Manchester backed out, "he would be smart," says Rick Besse, a hotel consultant and broker in Dallas. "So many rooms are coming in to downtown Austin. He would be the second 1000-room hotel. It would be better if these were built in stages — one, then another, instead of all at one time."

One of Texas's best-known hotel consultants, who didn't want to be named, says, "I have not heard anything, but I have always thought the project was a bit suspect, especially after the [J.W. Marriott hotel] got under construction." (A 1000-room Marriott will open in 2015 and, according to rumors, has already booked 400,000 room nights and most of the convention business. I couldn't reach anyone there.)

Continues the consultant, "I am pleased to hear the [the Manchester Fairmont Hotel] will not move forward. There are tons of new hotels planned for downtown Austin which will be absorbed, but the 1000-room Fairmont would have caused a huge oversupply in the market."

According to rumors, Manchester didn't have the equity to complete the deal, especially as costs kept rising. Supposedly, another potential owner is looking into putting a 500-room hotel and apartments at the location.

Including the apparently aborted Manchester Fairmont project, downtown Austin was expected to get 3200 hotel rooms in the next three years — 40 percent above the current stock of 8000. That's excessive growth, the experts agree.

In late January, Papa Doug's son, Doug Jr., was quoted saying that his father had not made final financing decisions.

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Don Bauder March 13, 2014 @ 2:05 p.m.

PAPA DOUG SAYS RUMOR NOT TRUE. A spokesperson for Papa Doug Manchester, quoting him, says that the rumor that he is abandoning the Austin hotel project is not true. He says he intends to break ground on the project within 90 days. (That would go along with with the statement of the architect, who expected a groundbreaking in May.)

Papa Doug added that the rumor may have been started by competitors. "We are committed to the project. We are not giving up by any means," Papa Doug told the spokesperson. Best, Don Bauder

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aardvark March 13, 2014 @ 4:18 p.m.

Dougie--if you need money, you could always sell the Manchester U-T. It might still be worth a few million...

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Don Bauder March 13, 2014 @ 8:18 p.m.

aardvark: San Diegans should be so lucky. Best, Don Bauder

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commando March 13, 2014 @ 7:49 p.m.

More rumors please!!!

Journalism at its finest! Bravo!

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Don Bauder March 13, 2014 @ 8:22 p.m.

commando: Were you the one who howled when I printed the rumor that Manchester would buy the U-T? There is nothing wrong with rumors when they are labeled as such, and when they are eminently credible, as this one is. The groundbreaking of this hotel has been delayed and delayed while the Austin market becomes saturated with hotels. Best, Don Bauder

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Visduh March 13, 2014 @ 8:14 p.m.

It is also possible that Dougie will actually pull the plug on it in a few days, even after his ringing affirmation. Stranger things have happened, and if he does, he'll cite altered circumstances and bad publicity as the reasons.

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Don Bauder March 13, 2014 @ 8:25 p.m.

Visduh: Privately-held companies will often deny a rumor right up until the second that the rumor becomes true. Publicly-held companies, which have financial reporting requirements, have a tougher time with this, but often do it. Best, Don Bauder

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HonestGovernment March 15, 2014 @ 1:50 p.m.

I wonder how the 99-year lease works. Can Manchester break it if he doesn't build? Can he build something else, and how much does he control the lot usage?

In a July 8 2011 article, the Austin Chron wrote: "Manchester has signed a 99-year lease agreement with longtime Downtown landholders Perry Lorenz and Robert Knight. ... Though Lorenz and Knight no longer control the property that they've owned for some 15 years, the two are playing an active role in getting the project off the ground."

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Don Bauder March 15, 2014 @ 2:25 p.m.

HonestGovernment:That's a question I can't answer. The lease, if it exists, may have some wrinkles permitting Papa Doug to get off the hook (possibly by paying a penalty) under certain circumstances, such as not being able to line up reasonable financing.

One rumor has another developer putting a 500-room hotel plus apartments on the property. Best, Don Bauder

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Ponzi March 13, 2014 @ 8:31 p.m.

I have family in Austin and am familiar with the city. Manchester's son, Doug Jr., is managing this project. The Manchester Fairmont wanted to build a sky-bridge over a waterway to the convention center. The conservatory has been opposing the bridge. The city is getting an early taste of the "Manchester way."

They don't like Californian's out there. Also, Austin is one of the most gay-friendly cities in the U.S. so he might keep a lower profile rather than plastering his name on everything. I know everything is bigger in Texas, but I question if that state is has enough room for Manchester's ego.

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Don Bauder March 13, 2014 @ 8:38 p.m.

Ponzi: It was either Austin or the state that tried to pass an anti-gay bill (I think it was against same-sex marriage), and a very large company -- I believe it was Apple -- said it would not build a plant there. Austin (or the state) backed down. In Texas, greed trumps everything. In this case, it was a good thing. Best, Don Bauder

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HonestGovernment March 15, 2014 @ 1:44 p.m.

Hey Ponzi, I see the skybridge you mentioned (though it's totally unnecessary - Waller Creek passes under the street; only a decorative bit of it passes through the east side of the Convention Center landscape): http://www.ccimtexas.com/images/website243/waller_creek_development_12012.pdf

This plan was presented by Doug Jr and the Gensler architect at a 2012 Certified Commercial Investment Member (CCIM) conference in Austin: http://www.ccimtechblog.com/2012/02/austin-is-getting-serious/

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Don Bauder March 15, 2014 @ 2:34 p.m.

HonestGovernment: One of my sources believes that the architecture of the proposed Fairmont does not fit with Austin's style. Best, Don Bauder

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HonestGovernment March 14, 2014 @ 2:19 p.m.

Ponzi: The Manchester hotel, if built on the Lorenz-dynasty lot at 608 E Cesar Chavez St., as planned, wouldn't need a bridge over a waterway: the 1.7-acre lot is directly across the street from the convention center. It's possible that Manchester would want a "skybridge" simply to cross Red River Street, although the walk through one intersection or mid-street is nothing. The AA Statesman business blog (June 2011): “We have looked carefully at many hotel sites in the Austin market and concluded this site is by far the very best with its immediate location adjacent to the Convention Center” said Manchester. “With our many years of developing world class hotels, we concluded our patrons would find it unpleasant during the summer heat and winter’s freeze to walk several blocks to access important exhibits and meetings at the Convention Center.”

Waller Creek Eleven Ltd. owns the parking lot that Manchester may build on. Perry Lorenz, partner of the limited entity, is the son of two oil-connected families (mother, of the Reinhold family, all major Varco shareholders; father, Howard Lorenz, inventor of several patented oil-drilling tools/equipment). Perry Lorenz (in his mid 60s) is married to Sheridan Mitchell, daughter of fracking inventor, philanthropist, and developer George P. Mitchell. GPM, who died last summer, was said by Forbes, in 2004, to be worth $1.6 bill.

Lorenz is extremely wealthy and hardly needs Manchester's money, and could care less what Manchester's political leanings are, but I'm sure Lorenz enjoys using the prospect of Manchester's development to control other development in the Austin area. Lorenz, who owns a ton of other properties all around the convention center, did in fact did use the potential Manchester hotel to thwart a $4 mill incentive to another hotel developer in 2011.

What saddens me is looking at the destruction of a beautiful, historic area. Take a Google street-view look using the above map link: the old Rainey/Waller Creek neighborhood once had many historic buildings, from the early and late 1800s. You can see a few of them now, amid the high rises and new construction. The beautiful old Victorian-house neighborhood where I lived in Austin in the late 1960s, near the Univ of Texas campus, has been bulldozed for mini-dorms. The huge pecan trees that were in our front yards are gone. Connected, rich developers like Perry Lorenz have almost total control over the Austin City Council, even to the extent of thwarting laws that require developers to obtain approval if they want to cut very old, large trees, of which there were once many.

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Don Bauder March 14, 2014 @ 2:43 p.m.

HonestGovernment: I tried to reach Lorenz in two phone calls but couldn't get a callback. Lorenz was just one of a number of people I called. When one of Manchester's assistants called me back with his denial, I was amazed. It was the first time he has answered a query of mine in my 41 years of covering San Diego. Best, Don Bauder

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jelula March 14, 2014 @ 7:21 p.m.

Wonder what his agenda may be? Must be one for his assistant to respond to your call....

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Don Bauder March 15, 2014 @ 7:14 a.m.

jelula: I think the Austin experience -- the endless delays, the problems with financing -- have been an embarrassment. Best, Don Bauder

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Ponzi March 14, 2014 @ 11:04 p.m.

Wow, I appreciate your comments. I have a love/hate relationship with Texas. My father was born there on a farm outside San Antonio. I still have family in Austin and San Antonio. I have visited there almost every year for 40 years. I was in the Travis County Courthouse one morning in 2000, in the basement, seeing a flock of media with lights and cameras surrounding Rick Perry. I did not know who he was then. But he had that hairdo and smile. I was 15 feet from the next governor before Bush became president. I really like Austin and just wish it was not so hot. Texas seems to be slowly poaching California businesses. I just read Occidental is moving from L.A. to Austin. There is a "theme" that is attracting businesses and speculators such a Manchester to see fortunes to be made in Texas.

The question this story raises is does "Papa Doug" have the huevos to stay go forth with his hotel. He doesn't have the political clout, that I can see, in Austin that he has in San Diego.

My opinion is that Doug is out of his league and his Fairmont will never be built.

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Don Bauder March 15, 2014 @ 7:20 a.m.

Ponzi: I think Manchester would be foolish to build into a market that is heading rapidly into gross saturation -- just as convention centers throughout the country foolishly keep expanding into a glutted market. Manchester may want to plunge ahead with this project, but he has to get financing. Potential lenders can see a certain glut expanding in Austin. Best, Don Bauder

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HonestGovernment March 14, 2014 @ 2:24 p.m.

And Ponzi: Manchester's ego is NOTHING, in Texas. As for the attitudes and political leanings in Austin, in general, it's about money, heritage, connections, and power, more than San Diegans could ever imagine. For younger people, it's much more Libertarian than Liberal. Especially members of the latest native-born generation, "Gen App," are more concerned about the right to carry, to Tweet, to drink, and music and BBQ, than they are about protecting the environment or any progressive-thinking issue. If you want a sense of what appeals to the majority of people in Austin, and a taste of Texas-size ego, just thumb through a recent issue of Texas Monthly. You'll be sick of Texas w/o setting a foot in it.

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Don Bauder March 14, 2014 @ 2:45 p.m.

HonestGovernment: One can get sick of Texas just listening to the governor talk. Personally, I was sick of Texas long before he was governor. Best, Don Bauder

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HonestGovernment March 14, 2014 @ 3:41 p.m.

Me too. Sixth-generation, Austin-born, I fled on my 18th birthday and never returned.

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Don Bauder March 14, 2014 @ 7:04 p.m.

HonestGovernment: You know the slogan: "Don't Mess with Texas." Best, Don Bauder

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Ponzi March 14, 2014 @ 10:52 p.m.

I recall "Don't Mess with Texas" was a slogan to discourage litter-bugging.

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Don Bauder March 15, 2014 @ 2:39 p.m.

Ponzi: Yes it is -- or was -- an anti-littering slogan, but its tone is definitely chip-on-the-shoulder, bumptious Texas. Best, Don Bauder

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David Dodd March 17, 2014 @ 12:34 a.m.

So, why doesn't Dougie just buy up the the Austin American-Statesman and the Austin Chronicle, insist that the writers scribe garbage columns about how badly the City of Austin needs this hotel, and sit back and wait for public opinion to change? Isn't that what he's doing in San Diego?

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Don Bauder March 17, 2014 @ 9:30 a.m.

David Dodd: Yes, that's what he is attempting to do in San Diego, but his circulation is dropping and credibility slipping badly. He has had some successes recently (getting a friendly mayor elected), so he may be feeling his oats. Best, Don Bauder

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Don Bauder March 18, 2014 @ 8:18 p.m.

MANCHESTER HIRES BUILDER FOR FAIRMONT. The Austin American-Statesman said today (March 18) that Papa Doug Manchester has hired Hunt Construction Group for the building of the $370 million Fairmont Hotel.

However, Manchester's company did not give an updated timetable for the groundbreaking. It was to happen in spring of last year, then in November of last year, but a new date hasn't been announced. A person who searched Travis County records could find no indication that Manchester has financing for the hotel. Best, Don Bauder

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