A proposal for the expansion of the downtown Austin Convention Center is expected to be voted upon by Austin City Council later this year.[/caption]The city of Austin's financial services department has been busy analyzing how to pay for Austin Mayor Steve Adler's vision for downtown.
Tasked with finding ways to finance downtown projects outlined in the mayor's December "downtown puzzle" priorities, the city's interim Chief Financial Officer Greg Cannally on Thursday sent Adler and council members a memo outlining his preliminary findings.
The so-called "Initial Financing Framework" assumes most of the projects—including the expansion of the Austin Convention Center, improvements to Waller Creek, and several homeless initiatives—will be funded by city hotel occupancy taxes and by Waller Creek Tax Increment Financing, or TIF, Cannally said.
Cannally's memo indicates $750 million could be used to fund capital projects such as Waller Creek, the convention center expansion and improvements to other areas such as Palm School, Brush Square, the Mexican American Cultural Center and other historic sites.
He said about $17-$19 million in operating costs could be used for music and historic preservation, homeless initiatives and Waller Creek.
Cannally said hotel occupancy taxes—extra fees hoteliers must charge guests and give to the city and state to help fund tourism—could generate about $610 million in capital funds and $8-$10 million in operating funds based on the Austin Convention Center's funding proposal.
The proposal raises the hotel occupancy tax rate by up to two percent—the maximum allowed by the state—to use toward the center's expansion and other tourism-related projects such as historic preservation and Austin's cultural arts.
Discussions have also been revolving around the possible geographic and yearly extension of the Waller Creek TIF, originally created to finance the construction of flood control improvements along lower Waller Creek. An extension could bring $100 million in funding to help revitalize Waller Creek by using incremental additional taxes from any anticipated development in the TIF's geographic boundaries, according to the Waller Creek Conservancy.
Cannally's memo also lists a potential new Downtown TIF that could generate an additional $30 million.
Other funding could come from a Tourism Public Improvement District, in which funds are collected from local hoteliers and other businesses that benefit from tourism. Cannally estimated $8 million could be gained from such a district.
A Tourism Public Improvement District can be formed once more than 50 percent of property owners in the outlined district sign a petition approving it and City Council approves it, according to state law.
In his December City Council message board post on solving the downtown puzzle, Adler listed several issues he would like to see addressed, including homelessness, safety, the convention center expansion, Waller Creek improvements, transportation and the preservation and growth of the art and music industries.
"This 'Initial Financing Framework' is a work in progress," Cannally wrote, adding staff would continue analyzing funds and refining estimates on funding sources in the coming months.
Another update is expected at the end of September.
