Lakeway approves $2 million for historic resort, delays parts of marina funding

The Lakeway City Council voted unanimously Monday to provide the historic Lakeway Resort and Spa with $2 million in renovation and preservation funds over three years. However, the council only approved partial funding for a grant request for the Lakeway Marina.

The council approved to use funding from its hotel occupancy tax fund, or taxes imposed on hotel guests, for uses such as "historic rehabilitation" and "advertising and promotion," according to city documents. The Lakeway Resort and Spa opened in 1963, predating the official incorporation of the city, and is considered the "foundational" project that helped begin building the local community, according to the documents.

"We want people to be eating with us, enjoying life with us, having their occasions with us, having friends and family stay with us," said Bridgette Summers, chief investment officer for Trestle Studios, the investment firm that acquired the resort in May. "This is a special location with a built-in community."

The council unanimously approved providing the resort $1 million this month, with two more disbursements of $500,000 each over the following two years. The funding is planned to remodel the resort in hopes of reigniting interest, success and implementation of a membership program. This follows multiple years of decreasing sales due to previous owners neglecting to invest in the property, according to developers.

The council, however, was split on approving a request of about $1.1 million in hotel tax funds for remodeling the Lakeway Marina, a separate facility that opened alongside the Lakeway Resort and Spa in 1963. Developers argued the marina, the first to be connected to Lake Travis, where city residents and hotel guests can bring boats for recreational use, is integral to the success of the resort.

Some council members questioned and disagreed with the funding's intended allocations, such as parking lot renovations and repairs for a boat launch area.

"I'm having a hard time understanding how expanding, resurfacing and striping a parking lot is akin to a historic resource rather than simply improving a commercial business," Council Member Christopher Forton said. "Are people going to come miles around to take a picture of the parking lot? I don't think they will."

After deliberation, the council voted to approve parts of the request, such as those for renovating the marina, and table other portions such as the parking lot and boat launch area renovations, until an August meeting.

City manager proposes fee hikes

City Manager Joseph Molis proposed fee increases from city departments at the end of Monday's meeting. The proposed increases come after discussion about a projected $1.6 million gap in the 2027 fiscal year budget at previous meetings.

The fee hikes are intended to help close the gap, which is expected to come from   building development slowing down and thus a decrease in revenue from permit fees. Molis said rising city services costs and inflation also have widened the expected difference.

At the meeting, Molis proposed increasing some city fees. Some of the ideas included increasing special-use permit fees for businesses from $250 to $500, or bumping up the fines for stop-work orders, issued when officials determine a site has violated safety requirements, from $250 to $300 for a first offense and $500 to $600 for a second offense.

Molis and city staff also offered the idea of charging residents the credit card processing fees in transactions involving building permit and court fees. In the past, the city would absorb this cost, but he said this has cost an estimated $40,000 so far in the 2026 budget.

Although passing the cost along to the residents would increase the rate from about 2.7% to 3.75%, Molis said it would help ease the burden on general taxpayers.

In addition, Molis proposed the possibility of the Parks and Recreation Department increasing fees at activity centers, including adding an additional weekend-use fee. The city staff also proposed raising prices of the annual Family Fun Pass for the Lakeway Swim Center from $280 to $300 for residents and $350 to $375 for non-residents.

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