What's happening
A 460,000-square-foot convention center and 1,000-room hotel are being planned by RIDA Development Corp. The new hospitality project would be situated just north of the race track on COTA's Southeast Austin property.
While it's a private development, Austin will be involved under a tourism tax deal that first came together earlier this year and will continue with the city's purchase of the future convention campus.
In the spring, city leaders advanced a funding agreement with RIDA under the "qualified projects" provision of the Texas tax code. That process will allow Austin to collect some taxes from the convention center that otherwise would go to the state, and begin with a $20,000 hotel occupancy tax, or HOT, contribution from the city.
On July 24, City Council also voted to acquire the site of the future convention facility at no cost. The acquisition is part of the qualified projects process that will allow for the added HOT collections for several years. The developer will then lease the property back from Austin and have the option to buy back the land after a decade.
The city was approached by the developer about the partnership, according to Austin Financial Services spokesperson Kimberly Moore, and the project would be Austin's first tax code Chapter 351(C) agreement. Moore said future tax revenue projections from the development have yet to be determined.
What else?
The development is moving forward while the city advances its own convention center project downtown.
The $1.6 billion redevelopment of the Austin Convention Center broke ground this spring, and the decades-old building is now being demolished. Once completed by late 2028 or early 2029, the replacement convention center is expected to span 620,000 square feet of rentable space on a campus that's more open and accessible to the public.
City staff have reported that a new facility has long been needed to keep pace in the national conventions industry. Past projections found the redeveloped center would bring hundreds of millions of new dollars to the local economy annually while boosting city tourism tax revenue.
Despite a second convention center now rising to the east, the COTA addition isn't expected to impact the performance of Austin's facility.
"This project will not compete with the expansion of the Austin Convention Center, as each facility has separate and distinct target markets. The Developer has projected a positive economic impact for the City related to job creation and tax revenue generation through this project," city staff reported.
Tom Noonan, president and CEO of Austin's tourism bureau, Visit Austin, said the bureau doesn't consider the proposed project to be comparable to the expanded Austin Convention Center.
"Because of the new Austin Convention Center’s size, as well as central downtown location, we don’t anticipate there being much competition between the two different spaces," Noonan said in an email. "Because of their locations, these two properties would offer vastly different experiences and amenities."
