The details
Mike Crum, director of Fort Worth’s Public Events Department, gave council members a presentation on cultural and tourism funds. During his presentation, Crum explained why there is a need to increase the HOT rate.
“[Culture and tourism] revenues have not kept pace with post-COVID inflation,” Crum said. “The cost of projects, particularly the second phase of the Fort Worth Convention Center expansion, have outrun the financing capacity of the current revenue streams.”
Crum said that 2023 cost estimates for the convention center expansion are up 86% over original estimates in 2019. In terms of real numbers, Crum said that the 2019 cost estimate was $377 million, while the 2023 cost estimate is $701 million.
“We are currently committed to $95 million for Phase 1 [of the expansion]," Crum said. "It’s the $606 million that represents the nut we need to crack for Phase 2."
Diving in deeper
One option that Crum presented to help crack that nut is to raise the HOT rate 2%. He outlined a few things for council to keep in mind while considering this option:
- The use of HOT funds is restricted to tourism-related expenditures.
- Fort Worth’s HOT is currently 15%.
- Texas state law allows for HOT of up to 17% for a designated venue.
- Approval of venue funding requires voter approval.
- A 2% increase in the city’s HOT is projected to generate $9.5 million annually for debt service on Phase 2 of the FWCC expansion.
- FWCC bookings are expected to grow from 151 to 292 annually—a 94% increase.
- Attendance is projected to grow from 780,000 to 1.2 million.
- Room nights would increase from 650,000 to 1.2 million.
- The incremental direct investment over the life of the project is $4.3 million.
