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Kathie Tovo

Council OKs Palm School, convention center ideas

Friday, May 24, 2019 by Jo Clifton

In a stunning victory for Mayor Steve Adler and Council Member Kathie Tovo, the Austin City Council on Thursday unanimously approved a 27-page resolution directing city staff to gather all the information necessary to move forward with an extensive renovation and expansion of the convention center as well as preservation of an important part of Austin’s heritage – Palm School.

Tovo led the charge on a resolution that at first blush appeared to be all about preserving the historic Palm School and the relationship between the many entities that make up the southeast corner of downtown. Tovo has not always been convinced of the need for expanding the convention center but was excited about the idea of opening up the dead space created by the old-style center.

The school, which sits at Cesar Chavez Street and Interstate 35, is a reminder of Austin’s painful history of discrimination. Children from working-class Mexican American households as well as kids from other families in East Austin attended Palm School until Austin Independent School District closed it in 1976.

Significant pieces of the area to be planned include the Emma S. Barrientos Mexican American Cultural Center, the Rainey Street historic district and Waller Creek Park.

Latino activists, artists, musicians and venue owners, as well as representatives of laborers who work in the district and advocates for the homeless, came out to support not only a vibrant cultural district but also an expanded and more attractive convention center and increased opportunities for jobs and revenue.

Travis County acquired Palm School in 1986 and has shown no signs of wanting to donate it to the city, despite entreaties from Adler and Tovo. Travis County Judge Sarah Eckhardt told the Austin Monitor she thought the property was worth $20 million and that she would be willing to sell or lease it to the city, but not give it away.

On Thursday, following the Council vote, Eckhardt and Precinct 4 Commissioner Margaret Gómez sent a letter to City Manager Spencer Cronk stating that they “are committed to leverage the significant market value of this property for the full and speedy restoration and preservation of its architectural and cultural value.” In addition, they informed Cronk that they “welcome entering into negotiations … regarding the City’s intention to purchase the property protected by the restrictive covenants that the Commissioners Court will be deliberating June 4.” They invited Cronk to attend that meeting.

So, acquisition of the property remains a major hurdle for the city.

At a press conference prior to Thursday’s Council meeting, Council members and community activists came forward to praise the idea of the Palm District Master Plan and the creation of a district emphasizing Mexican American cultural heritage.

One of those who spoke was historian and activist Martha Cotera, who chided Travis County for wanting to make money on the sale of the school and surrounding property.

The resolution directs Cronk to do a significant amount of research on funding for the convention center expansion and renovation.

While the original resolution made it clear that funding for expanding the convention center would probably include a 2 percent increase in the Hotel Occupancy Tax, Council specifically stated that funding would “not include general obligation debt, any property tax pledge, General Fund revenue, or General Fund reserves.”

The city currently assesses a 15 percent HOT, 6 percent of which goes to the state while the other 9 percent is retained by the city. The maximum allowable HOT under state law is 17 percent. That money could be used for expansion of the convention center or for a voter-approved county project, such as renovation of the Exposition Center.

The other funding mechanism Council has discussed and directed the city manager to study is creation of a tourism public improvement district. Money from the extra hotel tax generated by the tourism PID could also be used for expansion of the convention center or a number of other tourism-related expenses. If Council adopted a tourism PID, the city would set up a 10-year service plan approved by hoteliers within the district, which includes all hotels that have 100 rooms or more within the city.

Council Member Alison Alter, a convention center expansion skeptic, offered an amendment to require the city manager’s analysis of economic and financial information to include “different scenarios for paying down the Austin Convention Center’s current debt,” as well as land leasing and acquisition options. In addition, Alter’s amendment called for a variety of analyses related to the economic implications of convention center expansion and “associated opportunity costs and risks, such as (but not limited to) implications for the city’s ability to move forward with non-convention center projects.”

Except for Bill Bunch, every citizen addressing Council on the Palm District/convention center resolution spoke in favor of the resolution, including convention center expansion. Bunch, a member of the Tourism Commission, spoke on his own behalf. He told Council that he was very much in support of the Palm School effort. “That part of the resolution is excellent,” he said. “I’m very much opposed to that part of the resolution dealing with the convention center, as being premature and contrary to the facts that we already know and what’s in the best interests of the community.”

Bunch said expanding the convention center could possibly divert “hundreds of millions of dollars that should have gone to live music, arts, theater, culture and historic preservation.”

He said Alter’s amendment would provide some needed due diligence on financial issues, but questioned the timing. He said that due diligence, which would be done after Council had already approved expanding the convention center, was “putting the cart before the horse.”

Bunch also said fewer than 4 percent of visitors to Austin are coming here for conventions yet the convention center receives 72 percent of hotel tax revenues, which he compared to percentages in other Texas cities. For example, he said, Houston’s convention center receives 33 percent of hotel tax revenues, and in San Antonio, the convention center receives 49 percent of HOT money.

Photo by Jo Clifton.

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