It seems some city officials want to jump start hotel development downtown:
http://austin.bizjournals.com/austin/stories/2009/11/16/story1.html?b=1258347600^2432461
Not enough room
Dell’s decision to hold event in Vegas proves Austin must add hotel rooms, finish projects
Austin Business Journal - by Jacob Dirr ABJ Staff
Nick Simonite
Marriott is supposed to build a 1,000-room hotel on this parking lot but the project is delayed indefinitely.
The city recently missed out on about $5.3 million dollars in economic impact after Dell Inc. moved its convention from Austin, where it had been held annually, to Las Vegas, officials said.
This year, Dell (Nasdaq: DELL) expanded its usual 2,000-person North American convention to include its European and Asian operations, increasing attendance to about 4,000 people.
Despite various plans and initiatives under way to bolster downtown Austin’s place as a preferred destination, a critical piece of the puzzle — another 800- to 1,200-room hotel — remains obscured.
At the same time, officials are optimistic the Waller Creek corridor and Sixth Street plans are framing the puzzle edges nicely and will make filling it in that much easier.
Austin’s rising star is putting it on the short list of many conventions, but they take a pass on Austin regularly enough to elicit action, said Bob Lander, president and CEO of the Austin Convention & Visitors Bureau.
With a group of 2,000 to 3,000, which is small by convention standards, officials have to use so many hotels that the cost becomes an issue, he said.
“You can go to San Antonio and use three hotels or come to Austin and use 10,” he said. “It is less efficient and harder to manage here.”
The organization has identified as many as 500,000 room nights that have gone to other cities in since 2006, conservatively equating to about $150 million in direct spending. Convention visitors are attractive to cities for pumping immediate cash into local businesses and city tax coffers, without the cost of providing city services.
About 19 million visitors spend about $3.5 billion in the city annually, generating about $290 million in state and local taxes, according to the city budget.
“It’s time to get serious about attracting more large-scale hotel capacity to downtown Austin,” Austin Mayor Lee Leffingwell said at an Oct. 28 luncheon.
Lander said some discussions have taken place that have “rekindled interest with hotel developers,” but he declined to elaborate.
At the heart of the hotel search is a lack of capital, a product of the recession. The problem has delayed indefinitely a planned Marriot downtown, which boosted national interest in Austin only to have it drop off afterwards, officials said. That Marriott, plans for which have already displaced the popular Las Manitas Avenue Cafe, is supposed to supply the city with an extra 1,000 rooms but officials have said that financing has fallen through due to the economy.
“We stand ready to talk to people about any potential solution, but we don’t have anything particular in mind right now,” Leffingwell said this month.
Lander pointed to cities such as Dallas and Washington, D.C., that have established a handful of funding options to offset the capital freeze. Austin has already seen some success, funding the 800-room Hilton through bonds in 2003, though today infrastructure projects are pushing bonding capacity to the limit.
“I have not heard of any proposals to do that again, but that might be a way to get another hotel built,” said Charlie Betts, executive director of the Downtown Austin Alliance.
Even with a shortage of hotel rooms, lodging taxes collected have increased every year since fiscal 2004, nearly doubling from $24.5 million to more than $40 million in 2009, according to the city budget.
Betts said hands are tied until capital loosens, but the city is busy working on projects to make downtown more attractive for investors.
This fall, the city applied for an $18 million federal stimulus grant, which would go toward completely redoing the streets and streetscape along Sixth Street, said Josh Allen, executive director of Sixth Street Austin.
Allen said the fact that Sixth Street has gone from being left off City Hall’s radar to Austin submitting a federal grant on its behalf is a huge change and shows the city is priming itself for a new level of competitiveness.
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all I know is that the 49 st. condo for 21c is on hold, and a new rendering for the 17 st. hotel has the most chance of be built since there is a shortage of hotels around downtown.
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