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Convention Center hotel discussion postponed to next week

Friday, June 24, 2011 by Michael Kanin

The Council delayed action on an economic development agreement with White Lodging on Thursday. The deal, which would support the construction of a Marriott convention center hotel on Congress Avenue, will instead be vetted next Wednesday during a special called meeting.

 

The move came as word circulated around City Hall of an alternative to the Congress Avenue site. Council Member Bill Spelman said developer Perry Lorenz has proposed building convention center lodging over what’s currently a parking lot at Red River and Cesar Chavez.

 

In addition, Spelman raised issues concerning an economic impact study prepared by the City of Austin’s Economic Growth and Redevelopment Services Office. In that document, the deputy director of that department, Rodney Gonzales, argues that the deal would add $25 million in revenue to city coffers.

 

“The numbers are inflated because they’re arguing that nothing will be there,” Spelman told In Fact Daily. “I don’t buy for a minute that that empty lot is going to be vacant for 10 years.”

 

Both hotels would serve as lodging for events held at the Austin Convention Center. Should Lorenz move forward with his project, it would represent a much closer option than the Congress Avenue lot, which sits between Second and Third streets.

 

The City of Austin would waive just over $4 million in development fees as its end of an incentives based agreement for the Congress Avenue property. In return, Gonzales suggests that the city would collect just over $6 million in sales taxes and $10.6 million in property taxes. In all, the growth office claims that the hotel would bring in $42.5 million in various revenues.

 

He estimates the city’s cost at just over $17 million. That figure includes the $4 million fee waiver.

 

Spelman suspects that Lorenz will ask for a similar deal. He suggests that the Council should offer the development agreement to both parties. The first to break ground would collect on the deal.

 

Spelman doesn’t see it as a win-lose situation. He expects that whichever party doesn’t get this economic development deal will build something else instead.

 

This is the second time that White Lodging has discussed building a Marriott on the Congress Avenue lot. The first, which began in 2008, was shelved.

 

When the Council debates the issue on Wednesday, it will mark Council Member-elect Kathie Tovo’s first full day on the job. Tovo, who defeated Place 3 incumbent Randi Shade last weekend, takes her seat on June 28 – the day before the hearing on the hotel.

 

Tovo is scheduled to hear a staff briefing about the package on Monday. She was not yet ready to comment on the measure on Thursday.

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