Venue could start hosting events, attracting visitors to hotels as soon as 2014
The Round Rock City Council formally approved $7.8 million in bonds for its long-awaited indoor sports complex on Jan. 26, moving the project one step closer to its estimated December 2013 completion date.
The sports complex is expected to fill a hole in the schedule for "The Sports Capital of Texas" which, until the $12 million facility is completed, does not have the ability to hold large indoor sporting events on the same scale as its outdoor events.
"Hopefully, if we're doing this with the out-of-town folks, this opens up a whole new world of sports that we can recruit here," said Nancy Yawn, director of the Round Rock Convention and Visitors Bureau.
The facility is expected to draw thousands of visitors to the city yearly, generating additional tax revenue and further cementing the city's image as a sports mecca.
The complex
While plans for the sports complex will not be available for several months some details are known.
The indoor sports complex, which is planned for 23.65 acres near the intersection of FM 3406 and Chisholm Trail Road, will likely be 75,000–85,000 square-feet, Round Rock General Services Director Chad McDowell said.
McDowell said he expects plans to be finished in about six months with construction starting in October. And while the initial cost estimate is set at $12 million, McDowell said he expects it could go up as plans are drawn.
"We're going to try to make this a showcase; we're not going to make this a warehouse," he said. "It's going to be a very professional facility."
Additionally, McDowell said his goal was to include shade spots outside, outdoor warm-up courts and to make the facility roomy enough so space is not an issue.
"We want to make it pleasing to not just the athletes that play sports here—we want to make it pleasing to the referees [and] the coaches," he said.
The plan, said Round Rock City Manager Steve Norwood, is to create a place to attract outside tournaments.
"These type of facilities are not typical city recreation. It's much more oriented to activities such as tournaments," he said. "It's not a Cedar Park Center. It's not for concerts or a recreation center."
Whatever the complex eventually looks like, Yawn said she is already starting to look at the types of activities Round Rock could host come 2014. She said the arena would open up Round Rock to a number of sports it previously could not support, including basketball, volleyball, martial arts, cheerleading, wrestling and badminton.
Yawn also said that she has been building relationships with organizations in anticipation of the day Round Rock could support indoor sports, an effort that has been ongoing for years.
"From day one, I've been talking to those people in hopes that one day I could talk to them and say, 'Guess what?'" she said.
The cost
Before a single volleyball net or basketball hoop can be erected, though, there is the matter of $12 million in construction costs.
Proposition 9, passed in November, authorized an additional 2 percent in local hotel occupancy tax (HOT) to finance the sports complex. Funds generated by this tax can only be used to fund the construction, operation and maintenance of the indoor facility.
The bulk of the construction—$7.8 million—is being paid for by bonds that will be supported by the additional 2 percent hotel tax. The remaining $4.2 million will come from the fund balance of the original 7 percent hotel tax.
In other words, the complex's construction, operation, debt service and other associated costs will be covered by the hotel tax.
At current hotel occupancy rates, Round Rock Finance Director Cheryl Delaney said the additional 2 percent would generate a bit more than $630,000 a year, all of which would go to debt service or to maintain and operate the center.
The benefit
"We're very excited about it," said Robert Murdock, general manager of the Hilton Garden Inn Round Rock, of the sports complex moving in just down the road from his hotel.
That was the prevailing sentiment from hotels in the area, almost all of which supported Proposition 9 and the 2 percent tax it placed on hotel bills.
Murdock, whose hotel sits between Chisholm Trail Road and the I-35 frontage road just south of the proposed complex location, said outdoor sporting events account for approximately 65 percent of the hotel's weekend business, but that winter months can be slow.
Once the indoor complex is finished, he said that could change.
"I don't see it swamping us. I just think it'll fill weekends that otherwise wouldn't fill occupancy," he said. "This will just add filler dates."
The exact impact the complex will have on the city and local businesses is unknown at this time. Delaney said city staff was still working on estimates for after the complex is completed.
However, Yawn said the city attracts approximately 31,000 visitors a year for outdoor sporting events—based on 1.5 visitors per participant, a figure she called "conservative." There are no estimates for what the new facility will attract.
"Hopefully right off the bat, a lot of our local teams and select leagues [will help attract events]," she said. "These people are attending tournaments. We're hoping they'll work with us to bring those tournaments immediately."
In 2010, Round Rock had 2,274 available hotel rooms and a 61.1 percent occupancy rate, according to statistics provided by the Office of the Governor, Economic Development & Tourism and Source Strategies Inc. That means in 365 days, there were 507,136 rooms purchased in Round Rock.
That same year, hotel room revenue reached $39,582,000 in the city, according to the office of the governor, meaning the average price of a hotel room was about $78. At that price, 100 room nights sold would generate about $546 for the city's HOT fund—a 7 percent rate—and an additional $156 with the Proposition 9 2 percent venue tax.
So if the complex generates even 10,000 room nights—and many sporting events span multiple days—the city would pocket about $54,600 in additional revenue every year just from the original 7 percent hotel tax. That says nothing of sales taxes from the shopping, dinning and other activities those participants spend money on while in town.
"It's one of those things, if you build it they will come," Delaney said. "How many will come, we'll see."
Hotel occupancy tax
Round Rock's hotel occupancy tax has been instrumental in branding the city as "The Sports Capital of Texas," and now it will help build the city's indoor sports complex.
State law dictates how such revenue can be used; however, the law has been written to accommodate specific municipalities with differing uses. Therefore, Round Rock can use the funds in some areas slightly differently than, for example, Hutto could.
State law has a number of provisions and examples of how the funds can be used, but, generally speaking, Round Rock can use hotel occupancy tax funds for the following:
- Costs associated with land acquisition, construction, maintenance and operations, among other costs, for convention centers or visitors centers
- Facilities, personnel and materials for registration of convention delegates or registrants
- Advertising to attract tourists
- Promotion of the arts
- Historical restoration and preservation projects that promote tourism at historic sites or museums
- Activities related to sporting events whose participants are mostly visitors to the city or that increase economic activity at hotels
- The promotion of tourism by enhancing or upgrading sports fields
Additionally, Proposition 9, passed in November, added 2 percent to Round Rock's existing 7 percent hotel occupancy tax, but restricted those funds for "the purpose of financing the venue project."
