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Convention Center short on Funds, to no one's surprise

Thursday, March 7, 2002 by

Austin Convention Center won't show profits until 2008

That the Austin Convention Center budget will fall a million dollars short this year because of an anticipated 15 percent drop in bed sales taxes probably was no surprise to the City Council yesterday.

Like every city department, the city’s tourism business has suffered in the recent economic downturn. What may have been the bigger surprise during a work session briefing from Austin Convention Center Department Director Bob Hodge, however, was the statement that the city may not see profits from the Convention Center until 2008.

Bob Landers, the new director of the Austin Convention and Visitors Bureau, provided plenty of numbers. The local tourism industry, according to a department report, generates $3.3 billion for the local economy and $2 billion in annual retail sales. The industry supports 18,000 jobs and almost a billion dollars in annual wages, contributing $50 million in annual taxes.

But Austin has lagged behind comparable cities in hotel occupancy rates, Landers reported. He told the Council the city simply does not have enough conventions in the pipeline to be competitive. He attributed that, in part, to a disproportionately low financial commitment to marketing and advertising as compared to comparable cities.

“Considering the building of the convention center and the new events center, our source of income is at jeopardy right now,” Landers told the Council. “We need to go forward and protect this investment.”

Austin has seen a 14 percent drop in hotel occupancy—double the decline seen in most comparable cities. The corresponding drop in bed taxes will mean a $4.6 million loss to city coffers. In addition, rental car taxes have fallen by $700,000.

Austin made significant financial commitments to the expansion of the convention center and the addition of the convention center hotel. The city made those commitments to elevate the convention center from a regional to a national destination. But the turnaround in income will not be immediate. Payments on an additional $20 million in debt service are part of the reason for the delay in profitability.

That was not something that sat well with Mayor Pro Tem Jackie Goodman as she looked over the charts presented by Hodge and Landers.

“You can interpret the chart as saying, ‘We invest this money in expansion in order to pull back in less money,’” Goodman told Hodge and Landers, who were joined by Convention Center Manager Larry Anderson and Director of Financial Services John Stephens.

Hodge said the city was climbing back from the drop in revenue, and that the drop was considerable. Goodman also asked the department to produce figures on just how much traffic offices in Chicago and Washington were generating for Austin’s tourism business.

Landers proposed a variety of measures to grade the convention bureau’s performance, from website traffic and market share analysis to room nights and meetings serviced.

The drop in rental car taxes may also impact the development of the Palmer Events Center and Town Lake Park, which was of special concern to Council Member Beverly Griffith. Griffith questioned whether park developments—intended by voters to be done in conjunction with the arts center and convention center expansion—would be delayed by the loss of tax revenues. When Stephens could not produce an immediate answer, Mayor Gus Garcia asked him to go back and use his best assumptions and projections to estimate whether the funding would be available to move the three projects forward in a coordinated manner.

Austin is only one of more than a dozen major cities on the verge of adding new convention center space, Landers said. The Austin Convention and Visitors Bureau will begin a blitz of trade publications to advertise the opening of the new venues. The Convention Center expansion is expected to open in May. The Palmer Events Center and Parking Garage will open a month later. Both projects are on budget

Former SOS Alliance chair says former ally no consensus builder

The candidacy of novice politico Brewster McCracken, who will announce his intention to run for the City Council today, has sparked an argument between two former allies in the environmental community: Council Member Beverly Griffith and Robin Rather, former chair of the Save Our Springs Alliance.

Like former Assistant City Manager Betty Dunkerley, McCracken has an impressive list of supporters, including former Mayor Bruce Todd and his wife, public relations specialist Elizabeth Christian; Gary Valdez, CEO of Focus Strategies; attorney Michael Whellan ; Sandy Kress, President Bush's education adviser and former Dallas Democratic Party chairman; legislative veteran Bettie Naylor; and environmentalist Rather.

Rather also introduced Dunkerley at her announcement, but says there is no contradiction in her support of both candidates. McCracken asked Rather for her support in late December or early January, she remembers, and she told McCracken he’d have it. However, when Dunkerley jumped into the race, Rather said, she told McCracken she would support the longtime city financial wizard if the two ended up running for the same seat. But she said she would definitely not be supporting Council Member Beverly Griffith.

Todd is also spearheading an independent effort to raise signatures for incumbents Jackie Goodman and Daryl Slusher. Todd said McCracken has assured him that he would not run against either of them. Both Todd and Rather said McCracken would run for an open seat if there should be one—but otherwise he will run against Griffith, the only one of the three incumbents to have 25,000 signatures at this point. She’s also the only one of the incumbents with a personal war chest to lean on should a campaign become costly. Griffith said Wednesday that she has raised $60,000 in her re-election effort.

Rather explained, “I have a number of concerns, and I am not convinced Beverly Griffith is the best person to serve the community going forward. She has failed to build a consensus (and she) lacks the ability to build consensus.” At this time, Rather said, “The community needs the highest level of leadership on the Council.”

Although Rather said she appreciates what Griffith has tried to do to protect the environment and support affordable housing and transportation solutions, she finds Griffith’s style to be “somewhat divisive. She has taken great pride in being on the losing side of a lot of battles.”

Rather said she would not want to see McCracken run against Dunkerley, noting that he would be the youngest candidate in a race with Griffith and Dunkerley. She described McCracken as “one of the hottest up and coming political potential stars . . . I’m confident in time he’ll be a real player.”

Noting that, “Politics is a rough game, with many twists and turns,” Rather said she is very sad to be opposing Griffith, her former ally. “I supported Beverly in the last two races and it pains me not to be able to do that this time.”

Griffith responds

Griffith responded to Rather’s assessment, “It’s very interesting—since out of the 101 items I have sponsored or co-sponsored (over six years) as a Council Member, 94 of them have passed. I think that is tremendous consensus building and obvious leadership ability. Also, there are some enormous and complex projects I have taken the lead on, that have been very successful and will be permanent contributions to Austin’s history. For example, when you cross Barton Creek on MoPac going from town south, look right. You’ll see a thousand-acre park, called the Barton Creek Wilderness Park.” However, Griffith worked on that campaign as chair of the Parks and Recreation Board, before her election to the Council.

As a Council member, Griffith said, she worked with the 13 neighborhoods surrounding Robert Mueller, various city departments and the Federal Aeronautics Administration to get all of Robert Mueller “into the general fund so that the income from sales and leases will help keep our tax rate lower than the average of the 5 largest Texas cities . . . and help us pay for EMS, police, parks, public health and transport and planning—the activities that touch our lives on an hourly basis. That is very much on people’s minds and that was broad consensus.”

Griffith also pointed to the Destination Parks and Greenways “that was a triumph of consensus building—East Austin neighborhoods and environmentalists, colleagues, staff. We’re going to bring the emerald necklace all around Austin so we can have a city within a park. The most environmentally sensitive and beautiful land in East and West Austin will be protected for the citizens from now on. You must be quite a consensus builder to pull that off.”

Coordination of effort across county lines essential to plan

After months of work, a regional group of experts has produced a draft of a voluntary plan to help prevent air pollution in central Texas. The “Ozone Flex Agreement” could be signed by a dozen local government agencies in and around Austin in the next 30 days.

The agreement sets out a series of objectives and commitments for local governments to comply with over the next five years. In return for the voluntary steps to alleviate pollution from ozone, the EPA will refrain from finding the Austin-San Marcos area to be in violation of the “one-hour” ozone standard. The federal agency will still have the option to find central Texas in violation of the “eight-hour” ozone standard.

A key element of the plan is the ability to coordinate efforts across county lines. In other areas of the state, such as Houston, suburban and rural counties have opposed the restrictions they face from the federal government that are designed to help reduce pollution generated in urban areas. The City of Austin’s Sustainability Officer, Fred Blood, says the cooperative process begun a year ago has managed to bring different political jurisdictions together to address air quality. “The purpose of the flex plan is to allow rural counties to pick and choose the strategies that are easier for them to implement, rather than just making it ‘one size fits all’ so they would have to do the same things we do,” Blood said. “That’s why we’re trying to work hard on this, to maintain local flexibility.”

Even though the Ozone Flex Agreement has yet to be officially signed by all of the parties involved, the City of Austin has already begun implementing some voluntary measures to reduce ozone levels. Blood says that since those measures have been in place, the city has been able to reduce emissions that contribute to ozone by more than three tons. “We’re reducing over 15-million vehicle miles per year with our tele-work, bus pass and similar programs,” Blood said. Another program expected to be put into place this summer limits the amount of time vehicles are allowed to run idle at city loading docks.

In the long run, the city could explore more stringent measures for reducing the emission of chemicals that contribute to ozone. Many of those compounds are found in automobile exhaust, and the city could one day consider lower speed limits or a vehicle-testing program in an effort to reduce emission of those compounds. Other cities facing federal mandates have also placed restrictions on the operation of construction equipment and other heavy machinery. However, it will likely be one or two years before any of those options are studied in Austin.

Tuesday

, Wednesday,

Friday

Neighborhoods pledge vigilance . . . Representatives of the North University Neighborhood Association and their friends in other central area neighborhoods say they will be watching as the City Council considers once again whether to grant a zoning change for the Villas on Guadalupe. The last time the item came up, the Council approved the change on first reading only after developers reconfigured the project, causing the neighborhood’s petition to lack the necessary signatures. Since then, neighbors have gathered more signatures and believe the petition is valid once more—which would necessitate approval by six of seven Council members . . . Saturday morning art discussion set . . . The city’s Art in Public Places Program and the Santa Cruz Cultural Center will host a brainstorming session with artist Beverly Penn to talk about the children’s art garden that will be part of the Town Lake Park AIPP project. The forum is scheduled for Saturday morning, 10 a.m., at the Santa Cruz Cultural Center, 1805 East 7th Street. Sponsors hope to create an interactive area that will stimulate creativity in children of all ages . . . Hispanic Chamber honorees . . . The Greater Austin Hispanic Chamber of Commerce presented its yearly awards last weekend, with Patty Gonzales of the City of Austin’s Public Information Office receiving the Chairwoman’s Award for helping the Hispanic Austin Leadership program by managing the curriculum and operations. Juan in a Million, owned by Juan and Mirna Mesa, was named Small Business of the Year. Maricela Bar was named Businesswoman of the Year and Mike Borrero of Mike’s Formal Wear was named Businessman of the Year. Vicky Amezaga was named Volunteer of the Year and IBM was selected as the Corporation of the Year.

© 2002 In Fact News, Inc. All rights reserved.

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