City Council pushing forward on billion-dollar Austin Convention Center expansion despite pandemic questions

The question of an expansion of the Austin Convention Center, pictured here, has been debated for years. (Christopher Neely/Community Impact Newspaper)
The question of an expansion of the Austin Convention Center, pictured here, has been debated for years. (Christopher Neely/Community Impact Newspaper)

The question of an expansion of the Austin Convention Center, pictured here, has been debated for years. (Christopher Neely/Community Impact Newspaper)

The pandemic’s long-term impact on individual desires to attend convention-sized gatherings remains unknown, but the question is on City Council members’ minds as the city pushes forth on what is expected to be a $1 billion-plus expansion of the Austin Convention Center.

That estimate comes from a 2019 analysis from the University of Texas Center for Sustainable Development, and it was front and center last year when Austin City Council unanimously supported the effort to expand the convention center. City officials maintain that the facility, last expanded in 2002, is out of date and out of step with more modern convention halls in big cities throughout the country.

City staff said they would deliver an official cost estimate of the project in spring 2021.

Austin Mayor Steve Adler has vocally pushed for a convention center expansion for years and has vowed that the expansion will bring in more money for local businesses; fill the city’s purse with money that can fund projects and initiatives across the city; and transform the southeastern quadrant of Downtown Austin. Elected officials have prioritized creating a facility that engages the local community and is not just a space for tourists.

The project, which could come in three phases, remains far out, and those close to the project estimate that the whole endeavor could take eight to 10 years. However, Austin City Council will take a set of votes Sept. 17 that will push the project forward. The first is to spend up $310,000 on the San Antonio-based law firm Hornberger, Fuller, Garza & Cohen to consult on convention center expansion-related questions; the second is to negotiate a purchase of two city blocks west of the existing convention center for an initial payment of up to $6.3 million—two blocks targeted for the first phase of expansion of the new convention center.


The two city blocks, bound by East Fourth and East Second streets to the north and south and by Trinity Street and San Jacinto Boulevard to the east and west, currently host names such as the Vince Young Steakhouse, Fogo de Chao Brazilian Steakhouse, Fleming’s Prime Steakhouse and Wine Bar, P.F. Chang’s and MAX’s Wine Dive. According to the Travis Central Appraisal District, the properties together cost north of $63 million.

City staff documents state that council’s vote is the first to a two-step negotiation process. Staff from the Austin Office of Real Estate were not immediately available to clarify how the purchase will work.

Post-pandemic potential


Although City Council is expected to vote in the affirmative this week, the pandemic has spurred questions over what the future holds for the desirability of conventions and large gatherings and over whether such a massive investment in a Convention Center expansion during an economic recession will pay off, especially since convention centers typically operate at a loss.

During a City Council work session Sept. 15, Tom Hazinski, managing director for the city-hired consultant firm HVS Convention, Sports and Entertainment, admitted that the near-term outlook for the convention center market was highly uncertain, though he did attempt to assuage council member concerns over demand.

Hazinski said his survey of potential and past Austin Convention Center users yielded “extremely impressive” demand for an expansion, pointing out that Austin’s facility ranked 14th in the country in total function space. Hazinski contended that economic vitality, not health concerns, would most impact the convention center’s success in the coming years once the pandemic has subsided. He said the health of the convention center market rebounded after the two recessions in the 2000s and predicted that trend would continue.

District 9 Council Member Kathie Tovo, whose district surrounds the Austin Convention Center, said she believes this recession is unlike the other two and that she is not sure how long it would take for people to feel comfortable in large crowd environments once the pandemic had been eradicated.

Hazinski assured that the need for in-person interactions would survive the pandemic, pointing to the aftermath of the terrorist attacks of Sept. 11, 2001, which threatened to completely upend how people interacted with one another, especially in large gatherings. He said the event spaces and people will find ways to adapt to the new health requirements and develop a plan to deal with the next pandemic.

“The basic human need [to gather in person] is foundational is going to be there,” Hazinski said. “My firmly held view is that the demand is not going to change.”

The report from HVS also estimated that although the expanded Austin Convention Center would still operate at a loss between operating revenue and expenses, it could bring in a citywide economic impact of more than $800 million annually, up from the $495 million impact the existing convention center is estimated to produce.

The report showed an increase in the number of full-time equivalent jobs created by the convention center market from 2,868 to 4,640. The convention business in Austin also boosts the local hotel industry. Over a five-year period, convention center event days produced a 12.1% boost in hotel occupancy and a $37 increase in the average daily room rate.
By Christopher Neely
Christopher Neely is Community Impact's Austin City Hall reporter. A New Jersey native, Christopher moved to Austin in 2016 following years of community reporting along the Jersey Shore. His bylines have appeared in the Los Angeles Times, Baltimore Sun, USA Today and several other local outlets along the east coast.


MOST RECENT

A photo of a "sold" sign
Central Austin August housing market numbers show high dollar-volume sales

While housing inventory remains low, home prices continue to rise.

Lions Municipal Golf Course clubhouse (Christopher Neely/Community Impact Newspaper)
State-created Save Muny Historic District to take over concession responsibilities at historic golf course

Negotiations over the fate of the Lions Municipal Golf Course remain ongoing between the city and The University of Texas board of regents.

Central Health administrative building in Austin
Central Health finalizes budget with increased tax rate, more health care services for low-income residents

Local health care district Central Health is budgeting a nearly $20 million increase in health care delivery services for Austin’s low-income residents.

"This season is a big, black box, and there are a lot of unknowns, as far as what the season's going to look like," said Dr. Bradley Berg, a BSW pediatrics doctor in Round Rock. (Courtesy Fotolia)
Baylor Scott & White Health to host 9 Austin-area drive-thru flu shot clinics

"This season is a big, black box, and there are a lot of unknowns, as far as what the season's going to look like," said Dr. Bradley Berg, a BSW pediatrics doctor in Round Rock.

A band performs at the Mohawk on Red River Street. (Christopher Neely/Community Impact Newspaper)
Six months into pandemic, Austin officials scrambling to save music venues, child care facilities and restaurants

City Council is set to begin making choices on which businesses to try to save on Oct. 1.

Dr. Sam Rolon is a physician for Baylor St. Luke's Medical Group Creekside Family Medicine in The Woodlands. (Courtesy St. Luke's Health)
Q&A: St. Luke's physician shares advice on flu season, vaccine and prevention

The influenza vaccine is recommended for nearly all patients of all ages ahead of this year's flu season, Dr. Sam Rolon said.

student in mask
TEA launches statewide COVID-19 dashboard for public schools

The Texas Education Agency, in collaboration with the Texas Department of State Health Services, has launched its latest COVID-19 dashboard for positive cases in Texas public schools.

Austin City Limits Music Festival will present a free virtual broadcast from Oct. 9-11. (Jack Flagler/Community Impact Newspaper)
Free virtual broadcast of ACL Music Festival to be held Oct. 9-11 and more Central Texas news

Read the latest business and community news from the Austin area.

Gov. Greg Abbott said Sept. 17 that data from Texas' 22 hospital regions will dictate when certain businesses can reopen at 75% capacity. (Screenshot of Sept. 17 press conference)
Texas Gov. Greg Abbott: Retail stores, restaurants, office buildings, gyms can reopen at 75% capacity as early as Sept. 21

Nursing home and long-term care facilities will also be allowed to reopen for visitation as early as Sept. 24.

Austin City Limits Music Festival will present a free virtual broadcast from Oct. 9-11. (Jack Flagler/Community Impact Newspaper)
Austin City Limits Music Festival to present virtual broadcast Oct. 9-11

The in-person form of the 2020 festival was canceled for the first time since it began in 2002.

Army Futures Command leadership tour renovations to the Austin Community College Rio Grande Campus with ACC Chancellor Richard Rhodes and trustee Gigi Edwards Bryant. (Courtesy Austin Community College)
Austin Community College, Army Futures Command to launch software incubator program this winter

The program will be located at the renovated ACC Rio Grande campus in downtown Austin.