Updated Dec. 18 at 9:45 a.m. to clarify the city of Austin's timeframe for paying off its debt for a 2002 expansion of the Convention Center downtown
After voters approved a proposed expansion of the Travis County Exposition Center, to be funded with hotel occupancy tax revenue, earlier this year, Travis County Commissioners voted unanimously to create a steering committee at a Dec. 17 meeting.
The Travis County Redevelopment Engagement and Education Committee will help educate residents about the proposal and, in the case that the county is unable to levy a hotel occupancy tax—which is set at the maximum rate and benefits the state and the city of Austin—prepare a report for commissioners on the roadblocks.
“Our expectation is that this is something that the community has been wanting for a long period of time, and I think that there’s an excitement about our movement in this direction,” Precinct 1 Commissioner Jeff Travillion said. The expo center is located in Travillion's precinct.
Commissioners appointed Rob Golding, the CEO of Rodeo Austin, which is based at the expo center, as chairperson of the committee, and will approve the rest of the committee’s membership once nominees have confirmed their commitment, likely in January.
Travis County wants, and is legally allowed, to finance the expo project with a 2% venue project tax on hotel bills paid by guests who stay within the county.
Voter approval is required once a venue project has been approved by the state attorney general. On Nov. 5, more than 62% of Travis County voters supported the proposition to use hotel occupancy tax revenue to “energize the expo,” as the campaign slogan promised.
However, the county will not be able to collect any such revenue until at least 2021 because the state and the city of Austin currently levy the maximum hotel occupancy tax allowed in Texas—17%.
The state collects a 6% hotel occupancy tax, and the city of Austin collects a 9% hotel occupancy tax as well as a 2% venue project tax, which is being used to pay off its debt for the 2002 expansion of the Austin Convention Center.
The city’s debt expires in 2029. Previously, city officials said "the potential earliest timeframe" that the debt could be paid off—thus freeing up a portion of hotel tax revenue for the county to access—was 2021.
But in a Nov. 19 memo to Austin City Council, Assistant City Manager Rodney Gonzales wrote that that estimate was “not feasible” without an updated financial analysis for a second, $1.3 billion convention center expansion, which Austin City Council approved in May.
“[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.
Without access to venue project tax revenue, Travis County will be unlikely to pursue the expansion project, especially in light of the property tax revenue cap passed during the most recent legislative session.