The city of Shenandoah now has the option of paying for its proposed special events center with hotel occupancy tax revenue following the passage of Senate Bill 2166 during the 85th Texas legislative session.
Shenandoah city officials have been discussing the possibility of building a multiuse special events center within city limits since 2011. If built, city officials want to fund the $20 million-$40 million center with hotel tax revenue as the local industry continues to boom.
“I think there is an appetite for a facility that can be used for multiple purposes and we have a very good relationship with the sports industry, so this just gives us another mechanism to bring visitors to Shenandoah and have a positive impact on our hotels,” City Administrator Greg Smith said.
However, prior to the 85th legislative session, cities were unable to fund sports facilities—which the center would include—using hotel occupancy tax revenue. In hopes of amending that prohibition, the city worked with local legislators to propose special legislation in late 2016 for review at the state level.
“[Sporting events] are a huge economic boost to the whole area,” said Rep. Mark Keough, R-The Woodlands, who authored the House bill. “As the city wants to continue to [host sporting events], they want to build an athletic center, but rather than put it on the backs of the people, they’ve got some resources available right now in hotel occupancy tax revenue.”
Shenandoah most recently hosted the 2017 NCAA Division 3 Swimming & Diving Championship which had an estimated economic impact of $1.6 million and created 1,003 stays at hotels in Montgomery County, according to city officials.
Now that the legislation has passed, the next steps for the city involve getting a cost estimate on the center and conducting feasibility and economic effects studies to evaluate whether the center would be a good financial decision for the city.
Three new City Council members took office in Shenandoah following the May 6 city election—Byron Bevers, Charlie Bradt and Ted Fletcher. During a candidate forum April 20, all three stated they were not in favor of incurring $30 million in debt to build a special events center; however, that did not mean they were against the project altogether.
“If this council decides to not proceed with the special events center, then the project will die,” Smith said. “But the legislation is still passed so it could come up again at a future time with a future council.”
Shenandoah officials said they hope to have a plan for the center in place by 2019.
“This project will support our hotels,” Finance Director Jennifer Calvert said. “We want to take care of our residents, but we also want to take care of our business owners, so we want to help them fill their hotels.”