$66 Million in Closed Session

What's on the agenda

The applicant is KM Beach, LLC — a Texas company headquartered at the same San Antonio address as McCombs Properties, the family business of San Antonio billionaire Red McCombs and the named owner of Palmilla Beach Resort. The financing is structured as a Tax Increment Reinvestment Zone and a Municipal Management District: two mechanisms by which public revenue is captured to fund private development on a particular parcel. The City Manager is empowered, by the same resolution, to appoint staff and legal counsel to a three-member Council working group that will negotiate the Master Development Agreement over the next ninety days.

The deliberation of the District's boundaries and the MDA's financial terms occurs in closed executive session.

The staff memos describing both are listed on the Council's public agenda. They are not downloadable from the City's public-facing website.

Three weeks ago, on April 21, the same Council voted 5-2 to enter a Memorandum of Understanding and Professional Services Agreement with the same KM Beach, LLC. The packet for that meeting carried no posted action item for the agreement. The deliberation occurred in closed executive session. The vote was reported afterward by the Port Aransas South Jetty.

Seven years ago

Seven years and four months ago, the same Council voted 7-0 to award a different hotel-and-conference center contract — the city's first attempt at the project. That earlier deliberation was also held outside the public packet. The procedural mechanism that kept it off the public record fit in seven words.

They appeared on page 71 of the meeting agenda packet, in the commentary line for the contract.

That is the entire substantive content, in the public packet, of the deliberation that resulted in the 7-0 vote.

The grading rubric the City has since confirmed was used to evaluate the two bidders is not in the packet. A full-text search of the 413 pages returns zero hits for the words "rubric," "175," "182," "71.5," or "74%." The resolution template lists the wrong opponent — McCombs Properties rather than Palmilla Beach — and leaves the awardee field blank.

“INFORMATION SENT SEPARATE BY CITY MANAGER FOR REVIEW”

— Port Aransas City Council agenda packet · January 17, 2019 · page 71

Exactly once

A full-text search of the eleven publicly-available 2019 council packets — roughly 2,800 pages combined — returns the verbatim phrase "INFORMATION SENT SEPARATE BY CITY MANAGER FOR REVIEW" exactly once. Not on a routine consent item. Not on a budget line. On the hotel-and-conference center contract.

The rubric, since produced under a Texas Public Information Act request, shows the bidder receiving the 7-0 votes — Cinnamon Shore, with ZJZ Hospitality as hospitality partner — scored 175 of 245 possible points. The losing bidder — Palmilla Beach — scored 182. The category the lower-scoring bidder won most decisively was "minimal impact of future tax revenue to the City."

Two of the seven council members who cast that 7-0 vote had personally helped develop and apply the rubric. The other five had not seen the rubric in any publicly distributed materials.

Both members who served on the grading committee still hold Council seats. Both voted in favor of the April 21, 2026 agreement with KM Beach, LLC. The bidder the 2019 rubric had winning is the bidder on Wednesday's vote.

The parcel is the same parcel. The family is the same family. The City Manager is the same City Manager.

What is in KM Beach, LLC

KM Beach, LLC has been the named applicant on Palmilla Beach Planned Unit Development replats with the City since at least 2022. Its officers — Marsha Shields, Harry Ben Adams IV, and Steve L. Cummings — are filed with the State of Texas. Its assumed-name certificates trade as "Palmilla Beach Golf Club" and "Black Marlin Bar & Grill." Its parent, McCombs Properties, describes Palmilla Beach Resort on its own marketing site as "owned and being built by McCombs Properties, the real estate development company owned by famed San Antonio businessman Red McCombs."

The 2019 procurement was awarded to Cinnamon Shore, which sits inside a different Port Aransas Planned Unit Development across the island. As of May 2026, that conference center has not been constructed. The Cinnamon Shore award was relocated by Council to a third parcel in 2020, then transferred to a third entity, then allowed to expire when no construction broke ground by the December 2022 deadline in the developer's filed timeline.

Wednesday's vote is the procurement's third attempt — at the parcel of the 2019 procurement's higher-scoring bidder, under the family that owns it.

Wednesday

The May 20 agenda lists two itemized actions. The first is a resolution "Conditionally Consenting to the Creation of a Municipal Management District… with KM Beach, LLC." The second is the authorization of the three-member Council working group, for up to 90 days, to negotiate the Master Development Agreement.

The deliberation, again, occurs in closed executive session. The staff memos describing the District's geographic boundaries and the MDA's financial terms are listed in the public agenda but are gated behind a portal-account login at the City's civicweb portal. They are not on the City's public-facing website. The January 17, 2019 packet — the one that contains the seven words on page 71 — is, by comparison, freely downloadable from the City's public website. The newer documents do not appear there.

The City Manager

The City Manager who served on the 2019 grading committee — David Parsons — remains the City Manager today. He recommended the March 2025 contract awarded 7-0 to Weaver and Jacobs Constructors, for $9.575 million, to expand the City Hall and Civic Center — with Turner Ramirez Architects as the project's architect, the same firm that was on Cinnamon Shore's 2019 winning conference-center bid team. He recommended the April 21, 2026 agreement with KM Beach, LLC. He is the official Wednesday's working-group resolution empowers to appoint staff and legal counsel to support the MDA negotiations.

Records requests

Port A Local will file two records requests with the City Secretary after the May 20 vote.

The first will ask whether any conflict-of-interest filing naming KM Beach, LLC; Palmilla Beach Resort; McCombs Properties; Marsha Shields; Harry Ben Adams IV; or Steve L. Cummings is on file with the City from 2017 through 2026. (The City Secretary's earlier response to a parallel request — naming Sea Oats Group, ZJZ Hospitality, and the named principals of the 2019 winning bid — produced zero records.)

The second will ask the City Secretary to identify every agenda item in the same nine-year period in which deliberative materials were sent to Council outside the publicly-distributed agenda packet — by any mechanism — and to provide the records that document those routings. The responses will be published in a follow-up Dispatch.

Close

The Council that voted 7-0 in January 2019 — on a rubric the public packet did not contain — is largely the same Council voting Wednesday. The bidder the 2019 rubric had winning is the bidder on Wednesday's vote, financed by mechanisms that capture public revenue on the parcel the development will be built on, deliberated in closed session, with the staff memos that explain the terms gated behind a login the public cannot enter.

This case is one decision. The wider pattern it sits inside — five governance bodies the city presents as independent, in practice run by the same network of households; the body that drafts the rules with terms now lapsed; the disclosure-form regime that does not surface the architecture — is the subject of a forthcoming Dispatch.

The records describe an architecture. The architecture was decided.

The next set of decisions is on this Wednesday's agenda.