Page Two

Page Two
Two weeks ago, on April 2, I used this space to lay out some questions and concerns about the upcoming Proposition 1 on the City's May 2 ballot -- and about expansion plans for the Austin Convention Center in general -- and invited the city to respond to those concerns and provide their case for the proposition. Here's that reply, in the form of a letter from Mayor Kirk Watson. My answer to his answers to my questions -- plus a new question -- are at the end. Hope you could follow that.


We appreciate the opportunity members of the Chronicle editorial board gave us last month -- to come by and visit about the upcoming City May Bond Election. However, it is clear from Nick Barbaro's "Page Two" column from April 3 that questions remain, specifically about Proposition One.

I appreciate the questions, and I want to address them in hopes that everyone will be better informed about the need for the Center's expansion.

What, exactly, is the plan for the Convention Center?

If Proposition One is approved, $110 million would fund expansion of the Convention Center on adjacent land north of the current facility. The expansion would mean an additional 130,000 square feet of exhibit space, a new 40,000-square foot ballroom and another 35,000 square feet of meeting rooms. All told, the expansion would double the capacity of the current facility.

The plan for expansion is described in a feasibility study conducted by C.H. Johnson Consulting, Inc. and presented to the Austin City Council on Oct. 22, 1997. Copies of the study are available to the public and we would encourage anyone interested in getting more detailed information about the planned expansion to request a copy.

How firm is it?

The plan for expansion of the Convention Center and resulting projected costs are the basis for Proposition One. At this time, it is conceptual only. Voter approval of Proposition One would allow us to move forward with the expansion project and would fund improvements to the nearby Waller Creek area.

Planning for the expansion has not been done in a vacuum. Business needs are a definite driving force behind expansion. But there is a difference between business or program needs which are firmly obvious and what the building will look like and how its design will fit in with other proposed nearby amenities. That work, though, has started. The public had a chance to shape the vision for Waller Creek during a two-day charrette earlier this month. The highly regarded Regional Urban Design Assistance Team (R/UDAT) also has addressed expansion of the Convention Center and how downtown should be revitalized. The Austin Heritage Society, a group of local planners and professionals, also has spent the last several months developing a vision and plan for downtown.

What are the perceived needs/shortcomings in the existing facility that the expansion addresses? (Undersized loading dock? Shortage of ballroom-sized function rooms? What else?)

The major shortcomings are lost business due to lack of available facility dates which stems from the size of the facility, thus preventing simultaneous events, overlapping events or expansion of existing events. Lack of adequate meeting space is the second most frequently cited problem by potential users of the Convention Center. At its current size, the Convention Center cannot handle two large bookings simultaneously. This means a loss of hotel/motel occupancy nights as well as loss of bed tax revenues for the community at large.

Was there any survey of users regarding such needs?

As you might guess, the City solicits input, opinions and information from users on a constant basis as part of operating the Convention Center. Some of the feedback we have received from existing users regarding reasons for lost business: The International Association for Exposition Management, Central Texas Chapter says "many of the members of IAEM-CTC have outgrown or are nearing their capacity of the Austin Convention Center, and this expansion would make it possible for us to keep our shows in Austin." Members of the Texas Computer Education Association write, "our predicted growth for the TCEA `Conf. 97' is 7,000 plus. This means that we are reaching a maximum of space available (for) us at the Austin Convention Center... we would like to know if the City of Austin is planning any expansion."

Is there a transit component to the plan? Specifically, how does it accommodate future light rail in the area?

The planned expansion is compatible with ATS's proposal to reserve the 4th street corridor for future rail.

Can this facility work without more nearby hotel rooms?

The facility can work without more nearby hotel rooms. That answer was made clear publicly when C.H. Johnson Consulting, Inc., discussed its findings with City Council Members on Oct. 22. Then again, at the Wednesday, April 15 Council Work Session, the fact that the Convention Center expansion will be profitable without a nearby hotel was re-stated. However, optimal use and success would be best under the addition of a nearby headquarters hotel.

Do we have any idea what the prospects are for someone building a convention hotel (either with or without this expansion)?

The prospects are good if the City receives voter approval to proceed with the proposed expansion. We have already been approached by several interested groups to develop hotels if Proposition One passes. All of our discussions with potential hotel and parking developers have been based on the assumption of the proposed expansion of the Convention Center.

Is there any other potential convention hotel site that's contiguous to the Convention Center?

There are several potential sites for a hotel in close proximity to the expanded Convention Center.

Was consideration given to doing a public/private Convention/Hotel venture?

The City will be more than happy to consider the potential for entering into public/private partnerships. The feasibility study clearly addresses the need for additional hotel capacity, should the Convention Center be expanded. Following voter approval of Proposition One, the City will consider issuing a Request for Proposals or Request for Qualifications to explore these possibilities. We want to do everything we can to maximize the community benefit from the Convention Center and related businesses while minimizing the public investment necessary to achieve this goal.

Does the Convention Center area fall within a Capitol view corridor?

The Austin Convention Center site does not fall into the Capitol View corridor; however, several adjacent parcels are impacted by the Capitol View corridor.

I hope that I have been able to address Mr. Barbaro's questions and better help the public understand the need for Proposition One to pass. I think it also is important to point out that property taxes will not be used to pay for the expansion of the Convention Center. What Proposition One seeks is an increase in the Hotel Occupancy Tax of 2% to fund the expansion project. That means, for the most part, visitors to our City -- not residents -- will be funding the much-needed growth of our Convention Center and the improvements to Waller Creek. And that is fitting, since the Convention Center's primary purpose is to bring out-of-town visitors into Austin to help support local businesses -- hotels, restaurants, retail, music, etc. Currently, the community economic impact of the Convention Center is estimated at $70.6 million annually. That would increase to $156.6 million annually with the expansion. The fiscal impact including property, sales, and hotel taxes for Austin would grow from $3.3 million annually to $7.4 million annually. And, with the companion project -- the Waller Creek tunnel project -- sales and property taxes received from taking land out of the floodplain would directly benefit current Austin citizens by being used for services such as police, fire, EMS, parks, playgrounds, libraries, and the like. Further, if construction moves forward, Austin is expected to have a one-time benefit of $145 million and 1,143 jobs.

If readers need more information about the election, they can visit the City of Austin's Web site at http://www.ci.austin.tx.us or call 499-BOND. More importantly, we hope that people will go to the polls and vote.

Kirk Watson
Mayor, City of Austin


[Nick Barbaro replies:] The mayor says that it is "clear" that the expanded Center can work without attached hotel space, and he cites the Johnson group as supporting that view. Note, however, what Johnson's study actually said:

"The most important consideration for Austin is that there is no game plan in place to `manage' its hotel development in a way that will preserve the city's tax base or influence the type or location of future properties. Austin does not have a defined strategy for either its downtown, or its attendant hotel supply. However, the city has built the convention center. It has entered in this business and needs to consider an overall strategy for inducing complementary hotel development." In other words, we should have thought of this before we built the original Center.

If anything is clear, it's that we have no business planning an expansion when we still don't have a master plan for what this convention center complex is going to look like.

For instance, the Johnson study goes on to explain a very attractive option exercised by the city of Minneapolis, which parlayed its convention center complex investment into half-ownership of a major hotel property at no extra cost, by leasing out "air rights" to Hilton to put their hotel right on top of a city building. Could we do that here? Not if the expansion is built as it is now envisioned (at least not contiguous to the Center, which is very different from the mayor's "in close proximity to"). Would we want to do it? I don't know. But would we want to consider it, before we start to build? Why on earth not?

So the core question remains: What happens if this proposal passes? Will the city take that as a mandate to master-plan a fully functional Convention Center complex, or will they take it as a mandate to build first, and plan later?

When you get down to it, that's what I was really trying to ask. And I guess the mayor did answer the question; I'm just not too crazy about what that answer was.

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