Travis County continues to push for Palm School-expo center swap as city of Austin considers other options

Travis County commissioners proposed swapping ownership of the Palm School for ownership of the Travis County Expo Center and access to hotel tax revenue funds.
Travis County commissioners proposed swapping ownership of the Palm School for ownership of the Travis County Expo Center and access to hotel tax revenue funds.

Travis County commissioners proposed swapping ownership of the Palm School for ownership of the Travis County Expo Center and access to hotel tax revenue funds.

With voter approval to expand the Travis County Expo Center secured, county officials have issued an offer to the city of Austin to exchange ownership of Palm School for the expo center with a deadline of Dec. 16.

According to a proposed timeline for the expo center redevelopment, the county hopes to execute the land transfer or acquisition agreement with the city of Austin in July.

“I acknowledge that the City has shown no interest to date in linking its interest in Palm with our interest in Expo,” County Judge Sarah Eckhardt wrote in a Nov. 18 letter to City Manager Spencer Cronk. “Although we have not yet received a hard offer, Travis County looks forward to and will seriously consider any counteroffers proffered by the City for the sale of Expo or the purchase of Palm as linked or as separate transactions.”

In a Nov. 19 memo to Austin City Council, Assistant City Manager Rodney Gonzales wrote city staff "continues to pursue mutually beneficial solutions for achieving shared goals with Travis County on the Expo Center" and to "prioritize the acquisition of Palm School, and we are committed to a successful outcome."

A brief history


More than 60% of Travis County voters approved a proposition Nov. 5 that allows the county to collect hotel occupancy tax revenue to fund the expansion project.

However, the county will not be able to collect any such revenue until at least 2021 because the city of Austin currently collects the maximum hotel tax allowed under state law.


A portion of the city-levied hotel tax—a 2% venue project tax that is being used to pay off debt from the 2002 expansion of the Austin Convention Center—expires in 2029, but city officials have previously said they expect the debt will be paid off by 2021.

County leaders sought a commitment from the city to pay off the debt by this date at an Aug. 8 City Council meeting, but city officials stopped short of agreeing to an enforceable commitment.

Meanwhile, in addition to its plans to pursue hotel tax funds, county officials also proposed a swap to Cronk and Austin City Council in early July.

Per Eckhardt’s proposal, the city would exchange ownership of the former HealthSouth physical rehabilitation facility and the expo center site as well as the 2% hotel tax revenue stream for ownership of the Palm School site.

The city of Austin owns the expo center site, which it leases to Travis County.

The county owns the Palm School site and recently approved a set of restrictive covenants for the property that requires, among other things, most of the space be dedicated to cultural heritage or community uses.

However, commissioners have stressed the county does not have the funds to convert the site into a museum or cultural center or to maintain it as such.

City leaders have repeatedly urged Travis County not to sell the Palm School or its surrounding site, but thus far have not jumped at the chance to take over ownership of the site, which was most recently appraised at $53 million.

Next steps


Eckhardt and Cronk met Nov. 13 to discuss the Palm School site.

Per Gonzales' memo, the city has initiated an updated property appraisal for Palm School, which will take into consideration the recently approved restrictive covenants. It is expected to be completed by the end of January.

Gonzales added a final proposal will be made to Travis County "at the appropriate time."

Eckhardt said she expects to focus on the expo center at future meetings.

“In discussions at the staff and elected official levels over the past several years, the County has been steadfast in its communications that we will need 1. resolution on the transfer of ownership or control of the Exposition Center property to Travis County; and 2. a date certain by which the voter-approved 2% [hotel tax] will be available to Travis County for the renovation of the Exposition Center,” Eckhardt wrote.

Neither of these demands is likely to be fulfilled any time soon.

In his response memo, Gonzales said city staff will depend on an updated financial analysis for the Convention Center expansion to inform decisions on the expo center expansion project and hotel tax revenue.

He added the previous estimate that the city could pay off its debt by 2021—thus freeing up a portion of hotel tax revenue for the county to access—is "not feasible" without the updated analysis.

"[T]he reallocation of [hotel tax revenue] for other allowable uses, the timing for site acquisition, and the expanded scope of the expansion itself to include the current Convention Center site have all affected the timing and ability to retire the current debt ahead of its scheduled maturity in 2029," Gonzales wrote.
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By Emma Freer

Emma Freer began covering Central Austin for Community Impact Newspaper in 2017. Her beat includes the Travis County Commissioners Court and local business news. She graduated from Columbia Journalism School in 2017.


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