I can picture the place I had my first frozen Margarita in Austin at a Tex Mex place, but I can't remember the name of the place. It was very popular and always a long wait to get in. It was a small restaurant and bar on either 19th or Guadalupe maybe??
We didn't have liquor by the drink in Texas until 1971.
Buffettnews says it was drunk in 1973.
Here is an interview where Jimmy answers the questions some-what??
Q: Did you have your first margarita here in Austin and is that what started "Margaritaville"?
http://kgsr.com/Interviews/Index_buffett.aspx
A: I don't think I had my first margarita, but I'll tell you want it was. It was one of the best margaritas I ever had, because it made a lasting impression. I'd never thought of it until Jerry Jeff said it to me when we were going to rehearsals today "Didn't you start Margaritaville in Austin?" I went, "Oh, my God, yeah." And I remember it being a really, really hot day. But I remember it. I remember the funny thing was that it led to Jerry Jeff and I talking about the fact that he was the one who and said, "You know, it's pretty cool out here." I've always loved Austin, but I don't get here as much as I'd like to. But I think back to the fact that Jerry Jeff was probably the first guy here. I think even before Willie. And he called me and said, "You've got to come out here, because it's really happening out here." And he got me a gig at the old Castle Creek. And that's how I got to Austin. And so, subsequently, because of the fact that I was working out here that hot day and that great margarita turned into a rather good song.
So maybe the Castle Creek is the REAL place. I never went there, but I remember talk about it. It was first called the Checkered Flag.
It was at Lavaca and 15th Street.
(I don't know if this is the same place, but...I'm almost sure it IS not.)
The Texas Chili Parlor is also at Lavaca and 15th, and has been there since 1976. This place is referred to by Guy Clark in "I wish I was in Austin, at the Chili Parlor Bar, drinking Mad Dog Margaritas and not wondering where you are."
NOT a good Margarita at all...
Turns out that Clark and his friends drank the Chili Parlor's Mad Dog margaritas because of their cheap price ($1.50), not because of their winning flavor. "They're made out of the cheapest, worst-tasting mescal you can get," Clark explained. "They really do taste like s**t."