If the TextareaTag.java (html:textarea tag) is used all of the html tags under the closing textarea tag are erased. It appears that a closing html tag (</html>) is being inserted after the closing textarea tag (this is just an assumption). To resolve the problem I had to use a plain html <textarea> tag.
Even though the code in textareatag.java appears to append a closing text area tag(</textarea>) to an existing textarea, a closing tag should still be inserted with the <html:textarea> tag (ie. </html.textarea>). I am not sure if this is a bug in the code or if it indeed working as expected.