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Convention hotel bonds sold as

Thursday, June 7, 2001 by

City looks to revamp marketing

New contract will include performance measures, Chan says

Mayor Kirk Watson yesterday announced the sale of more than $240 million in revenue bonds for the city’s convention center hotel, even as the city seems poised to revamp the organization intended to promote the Convention Center.

The largest investor is Merrill Lynch Investment Managers. Other investors’ names won’t be released until all final documents are signed next week. H.L. Hotels LLC, a joint venture of Hilton Hotels Corp. and Austin-based Landmark Organization Inc., is developing the project.

The 29-story, 800-room Hilton hotel—an asset which will eventually be worth $350 million and open in January 2004—is intended to push the city up the ladder in attracting larger conventions and trade shows, even as the city doubles the size of the Austin Convention Center with a $110 million expansion.

“This alone should tell you that Austin is still ‘riding high’ as a destination city,” Watson said in a press release and at an afternoon press conference yesterday. “But, it also shows that we are certainly moving in the right direction with our efforts to revitalize downtown. After all, the Convention Center Hotel (and) the Convention Center Expansion are core revitalization projects.”

But the eventual success of the expanded Convention Center and its hotel is likely to be spurred by the city’s marketing efforts, and right now the rumblings are that there may be major changes afoot at the Austin Convention & Visitors Bureau (ACVB). Assistant City Manager Roger Chan, who oversees the bureau, says the ACVB is doing a good job but also says the original contract between the City of Austin and the non-profit ACVB is too “warm and fuzzy and trusting.”

The retirement of ACVB Executive Director Ric Luber, Chan says, is an ideal time to reconsider the department’s direction, and Chan says that direction needs to be more focused. He sees the problem as a lack of accountability, maintaining that the ACVB needs to be more directed and more integrated with the city’s overall marketing efforts. He says the contract currently being negotiated with the ACVB will be far more specific about expectations of the bureau’s performance.

This contract, says Chan, will hold benchmarks for the ACVB, which currently employs a staff of 40 and operates on a $5.8 million annual budget generated from hotel-motel taxes. Of the ACVB budget, $2 million is set aside strictly for convention sales and another $665,000 for convention and tourism advertising in consumer, travel and convention trade publications.

“They have had, as far as I can tell, a five-year free ride,” Chan says. “I would say, ‘Now it’s time to prove your worth.’”

A white paper presented by the ACVB’s public relations committee in January of this year pointed out that Austin was Texas’ fourth most popular tourist destination, behind San Antonio, Dallas and Houston. The 16 million visitors who come to Austin each year have an estimated $1.8 billion impact on the economy. The paper also argued that the ACVB has only a third of the budget of any of the other three cities, even as the convention business has grown by 63 percent over the last eight years.

The contract between the city and the ACVB was last modified in October 1999. While the contract does identify tasks—minority marketing, Heritage Tourism marketing and soliciting business for both the convention center and 20,000 local hotel rooms—it sets no quantifiable goals for the convention bureau in terms of increases in room nights or the size or quality of conventions. Chan plans to change that.

“As long as the city funds a significant part of their budget, I am responsible to the taxpayers,” Chan says. “The departments I oversee are publicly owned and run corporations that need to be accountable.”.

Changes to MUD plan gain

Planning Commission approval

Parks Board and Fire Department must weigh in too

In 1984, the Northtown Municipal Utility District (MUD), south of Pflugerville, reached an agreement with the City of Austin concerning land use for the area. The MUD, which is in the city’s extraterritorial jurisdiction (ETJ), needed city approval for land use under a contract between the two entities, which allowed the developer to form the district. Now, another developer wants to change land uses and the roadway alignment within the MUD.

Development review staff recommended approval of the changes, noting that the city will acquire only parkland, a fire station and MUD debt whenever annexation occurs. On Tuesday, the Planning Commission recommended that Continental Homes of Texas be allowed to make the changes it has requested; although that won’t be the final hurdle before the City Council considers the matter.

Jim Nias of Jackson Walker, attorney for Continental Homes, told the commission the revised land use plan “has the enthusiastic support of the neighbors” in the Municipal Utility District. City staff recommended the changes, noting that the Parks and Recreation Department and the Fire Department should also make recommendations concerning the location and amount of parkland and the site for a fire station. Nias asked commissioners to approve the land use and transportation changes and defer to the Parks and Recreation Board on the question of park placement and acreage.

Nias told In Fact Daily on Wednesday that he believes he has reached an agreement with the Parks Department. The crux of the disagreement is 155 acres of parkland, 113 of which was in the flood plain in 1984. Because of the tremendous population growth in Pflugerville, upstream of the MUD, the flood plain has expanded to 128 acres, he said. Most people prefer to have parks around creeks, so it is natural that parkland would include a considerable amount of flood plain, he noted. However, Nias said, the Parks Department wants more property that is not within the flood plain.

Nias said Continental Homes has agreed to provide an additional 5 ½ acres for parks and will pay the city about $90,000 in lieu of additional land. The Parks and Recreation Board will consider the matter on Tuesday. The question of where to locate the fire station is more difficult because Travis County Emergency District Number 2 is currently providing fire fighting services and might continue to do so even after the city annexes the MUD. There is no timeline for such an annexation, but the MUD is not populated enough right now to justify annexation, Nias said. He hopes to get the two entities to work out a compromise on the site location.

Commissioner Ben Heimsath said it would be appropriate to allow this in the city’s ETJ, and made a motion to accept the staff recommendation. “If it weren’t for the fact that we had an interlocal agreement between the MUD and the City Council, we’d have no land use planning at all,” Heimsath said. He noted that the elected board for the area had already made decisions about how the land should now be utilized, adding, “I just feel that we’re obstructionists if we hold this process up.”

Commissioner Robin Cravey responded, “I can’t let that pass.” When the laughter died down, he continued, “The implication (is) that we’ve been done a favor by being allowed to have some voice in the development of these MUDS. I think the MUDs were created, not as a favor to the City of Austin, but as a way to get around the regulatory authority the city might want to have and the direction the city might want to grow—and I’m not directing it at this MUD, but at MUDs in general.”

Heimsath replied, “Perhaps I should have stated this is making the best of a not ideal situation.” Cravey agreed and supported the motion. Only Commissioner Jean Mather voted against it. Mather wanted the Planning Commission’s recommendation conditional on the Parks Board’s approval.

Commission to list issues

For future water contracts

Settlement with Creedmoor-Maha clarified

City negotiations on a long-standing water supply agreement have served as a catalyst for the Water and Wastewater Commission to discuss providing its own list of priorities in future water negotiations.

Last night’s discussion began over an amendment to the 35-year-old water supply agreement with Creedmoor-Maha Water Supply Corp. in Southeast Travis County. In 1995, a developer extended the city’s water system into an area of the Onion Creek subdivision that belonged to Creedmoor-Maha, causing the water supply corporation to ask the Texas Natural Resource Conservation Commission (TNRCC) to issue a cease and desist order. Last night’s discussion was intended to clarify the city’s obligations under the negotiated settlement.

Vice Chair Lanetta Cooper, however, was concerned with how the settlement would impact the city’s long-term water interests and whether conservation was an issue in the settlement. Cooper also added that she wanted the citizens’ advisory committee to have a bigger role in reviewing such agreements. City officials were pressing for immediate approval by the commission, but Cooper questioned the rush.

“The only time we seem to have a continuance is if the other side doesn’t agree with it,” Cooper, an attorney, told her fellow commissioners, adding that she felt some frustration that issues such as conservation were not more carefully examined. “That causes me concern—not that I don’t think that you should negotiate in good faith—but I think the citizens’ advisory commission was established in order to provide input.”

Assistant City Attorney Ronny Jones told Cooper that the Creedmoor-Maha agreement was not providing new service, nor was it a new wholesale water supply agreement. The 92 lots in the Onion Creek subdivision are already being provided with water services. Instead, the amendment that was intended to go to the City Council next week elucidated some points in the settlement.

Bart Jennings of the Water and Wastewater Utility told commissioners that those negotiations included Creedmoor’s agreement to pay capital recovery costs and to pay for the water generated by a 4-inch meter installed by the city. The long-term water needs in the area, he said, were part of the needs assessed in the city’s 50-year water plan when it negotiated with the LCRA.

As Commissioner Jim Haley explained to his colleagues, the city had trespassed on Creedmoor; “and in spite of it, we’ll make money on this.” Chair Darwin McKee expressed some sympathy for Creedmoor-Maha, saying that the water corporation was no doubt waiting for the City of Austin to “walk the walk and talk the talk” under the 1996 settlement. Besides that, McKee added, “We’re getting a pretty good deal on something where we started out on the wrong foot.”

Cooper, while polite, said she was frustrated with the process. McKee agreed that her issues were valid. Haley suggested a compromise: providing city staff with a list of priorities the commission would prefer to see negotiated into every contract. Such a move would make it easier for city staff to negotiate—a far cry from sending them away from commission meetings “feeling like we had spanked them.” McKee said the list would be similar to one provided by the commission on negotiations for other water service area requests.

Cooper did call for a motion to table approval of the settlement, but that motion failed for lack of a second. The commission voted to approve the settlement, with the exception of Cooper, who voted against the amendment.

City Manager Jesus Garza has asked city staff to move as quickly as possible on the amendment to the water supply agreement, Jennings said. He added that the water corporation already approved the current agreement, in essence, during current negotiations. The City Council is scheduled to take up the amendment next week since a number of meetings have been cancelled between mid-June and mid-July.

©2001 In Fact News, Inc. All rights reserved.

Conservatives attack Ratliff . . . Faced with the prospect of having several conservative Republicans to choose from for Lt. Governor, the Young Conservatives of Texas attacked the only man smart enough to back off from the fight, current Lt. Gov. Bill Ratliff. In a press release praising Supreme Court Justice Greg Abbott, Land Commissioner David Dewhurst and Senator David Sibley, YCT Chairman Chris Allen said, “Any of them will represent a significant improvement over the outgoing Ratliff-Ellis administration, which enacted left-wing Democratic agenda items such as providing greater protections to racial minorities, gays, and bisexuals than other Texans . . . and criminal-coddling assaults on the death penalty” . . . Will there be a Homeless Center for ex dot-com executives in South Austin within five years? . . . The South Austin Culture Club promises to answer this and other more serious questions about South Austin’s future next Wednesday at the Symposium on the Future of South Austin, set for 11:30 a.m. at the Green Pastures Restaurant, 811 E. Live Oak. Featured speakers include Council Member Beverly Griffith and former Council Member Gus Garcia. The symposium is the brainchild of the bubba who created the Billion Bubba March. Not all of this is fun and games, however. Chief bubba Jack Speer sent out a press release posing the following rhetorical questions: “Will development-oriented public officials such as Mayor Kirk Watson continue to ignore South Austin in a spirit of disdain and vague fear? Will Max Nofziger get another gig as paid mouthpiece of the anti-light rail groups?” Seats are still available. Call 773-7350 or email Speer, socc@hotmail.com

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