South Padre Island developer mulls new hotel or multifamily project, secures zoning for both

The far north side of South Padre Island could see a new hotel in the coming years, or a multifamily project with several connected townhomes, as a Texas developer looks to build on raw land just north of Beach Access No. 6, public records and hearings show. 

Developer Michael Klement owns and operates the Holiday Inn Express on South Padre Island; his string of shell companies used for real estate purposes — including Greenville Inv Co LLC, Hieblue LLC, and SPI Springlodge LP, among others — has offices in the Bulverde region of San Antonio and the Dallas area. 

Klement was not available for comment on Tuesday. 

His broker on the zoning process in Cameron County is Bill Schrank, who serves as the general manager of the Holiday Inn Express on South Padre Island and has deep roots in South Texas hospitality. 

Schrank told Cameron County commissioners in recent weeks that Klement is the property owner of the undeveloped land in South Padre Island, which consists of three tracts spanning more than 94 acres. However, only 78 acres of that was rezoned, records show. That’s in part because not all of the property is functional for development, as it is underwater, Schrank said. 

“Right now, he’s leaning towards that townhome project; that’s really what he would like to do down in that area,” Schrank said. “I think right now we’re just trying to see what the options are because it would be between the townhome [development] and a hotel. His first intention was to build a hotel there…but it’s quite a ways down the island.” 

Klement purchased the undeveloped land in 2025 from Quixote Dunes Inc. for an undisclosed sale price. The three tracts were appraised by Cameron County at $1.4 million in 2025, which was adjusted down to $550,000 for taxing purposes after the developer protested. 

The land value for taxing purposes where the Holiday Inn Express sits also went down in value from $10.2 million in 2024 to $8.1 million in 2026 as the building value declined, records show. 

Some Cameron County commissioners questioned why the developer would seek the least restrictive zoning if the plan was to build townhomes as opposed to a resort, which could include anything from RVs to an upscale waterfront beach hotel. The land is about a mile north of Beach Access No. 6 before the road ends. 

“You’re telling us that you’re going to do one thing, then you come in and do something else. We’d just prefer you tell us exactly what you want or he’s planning to do, that way we’re all on the same page and there’s no miscommunication,” Cameron County Judge Eddie Treviño Jr. said. “I don’t have a concern with either [plan].” 

Despite some concerns, the zoning was approved in recent weeks. 

As of Aug 11, Shrank told the Rio Grande Valley Business Journal that the development could still be either townhomes or a hotel, with the hotel being the initial concept, but said the developer is already building townhomes elsewhere in Texas. 

Typically, most Texas counties do not have any zoning authority, but there’s an obscure law that gives Cameron County some control over unincorporated land on South Padre Island. 

This proposed project would be the fourth potential land development deal on the north end of South Padre Island proposed this year. 

There’s a $1 billion desalination plant proposed in the vicinity near Beach Access No. 5 and No. 6; Cameron County has been seeking a hotel developer to build near Beach Access No. 2; and it’s unclear what SpaceX’s plans are after an acquisition of 54 acres of single-family land past where the highway ends, way past Beach Access No. 6. 

Cameron County previously pitched to developers a request for proposals in 2023 to build on county-owned land next to Beach Access No. 2. That same request for proposals has popped up again this summer and was approved by county officials in late June but has not been released for developers to submit proposals as of Aug. 11, public records show. 

For at least a month, Cameron County officials have not offered any interviews when the Rio Grande Valley Business Journal has repeatedly inquired about the new hotel RFP on county-owned land. 

On the south end of the island, the city of South Padre Island is proposing either an expansion and addition of a hotel next to its convention center or a brand-new ground-up convention center and walkable hotel complex. 

Right now, there’s only one road on and off the island on the south end — the Queen Isabella Causeway. On the north side, the Texas Department of Transportation is moving forward with a second causeway. 

Officials say the goal is to encourage economic development projects on the north side of the Island and to offer an emergency evacuation route for a destination that draws nearly 4 million visitors each year. 

Cameron County leaders have not publicly supported or approved the city of South Padre Island’s pitch for a new convention center and instead have imposed restrictions on the existing convention center renovation plans, including environmental guardrails. 

South Padre Island officials recently hired consultants who suggested that the city is missing out on more hotel sales tax dollars, conventions, and youth sporting events due to a lack of scale, scope, and hotel walkability on the island at the existing convention center. 

It’s unclear whether the existing hotel vacancy rate on South Padre Island, on an annualized basis, would support any new hotels in the market. 

There’s a mix of long-time hoteliers, condos, timeshares, single-family homes, apartments, and a growing number of short-term rentals through Vrbo, Airbnb, and Vacasa on South Padre Island.