Travis County is going forward with its election to claim 2 percent of hotel tax to revamp the expo center at Decker and Loyola. I was initially for this proposal until UT announced they found a private developer to build a new big arena that would attract A list concerts. When they were considering going with a small arena, a new arena at the Expo grounds made sense.
They would have to wait to collect until the city pays off the 2002 Convention center bond money which could be as early as 2021.
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Travis County commissioners drew battle lines with Austin Monday over potentially hundreds of millions dollars in revenue after county commissioners ordered an election that could wrestle lucrative hotel taxes from the city.
The Travis County Commissioners Court voted to call for a November hotel tax election in a move that now creates competing interests between dueling proposals to expand the Austin Convention Center and the Travis County Exposition Center.
Commissioners voted unanimously to ask Travis County voters whether the county should charge a 2-cent tax for every dollar spent on hotel rooms in Travis County.
That money would then be dedicated to expanding the Travis County Exposition Center in northeast Austin. Austin already charges an identical 2-cent on hotel rooms in the city, which generates roughly $20 million a year for the Austin Convention Center.
Only one entity can charge the tax in a jurisdiction, and Austin got there first with a 1998 election that authorized the hotel tax. The county can still charge hotel taxes on bookings outside the city of Austin, but would be cut off from the area’s largest and most expensive hotels.
But voter approval of a county hotel tax could allow the county to call dibs on future hotel taxes as soon as Austin pays off bonds issued for a 2001 expansion of the Convention Center that are funded by the 2-cent tax.
City officials have shown projections that the city could pay off bonds related to a 2001 expansion of the Convention Center by 2021. Other projections showed the city paying off those bonds by 2029.
County Judge Sarah Eckhardt said the commissioners had to make a decision now “if we are ever going to use the hotel tax that is available to us.”
“Assuming that the city does pay down the (Convention Center) debt in 2021, we are going to have an election in 2019 so we can have it after they are done using it and use it to redevelop and east side special events center,” she said.
The move by commissioners also adds a new level of intrigue to another ballot item related to the recently approved $1.2 billion expansion to the Austin Convention Center. The petition initiated ordinance Proposition B also will be on the ballot. If approved, Prop B could greatly limit the city’s ability to further expand or renovate the Convention Center without voter approval.
Voters could take Prop B and the county hotel tax ballot item in tandem. Supporters of expanding the Expo Center through a county tax might look at Prop B as a way to put a stranglehold on expanding the Convention Center while simultaneously paving the way for the county to expand the Expo Center.
“I think they just sort of reinforce each other,” local political consultant David Butts said last week. “Maybe not intentionally, but nevertheless, there is that threat.”
In recent weeks, the hotel tax has emerged as one of several bargaining chips over the future of the county-owned Palm School in downtown Austin. In approving a large expansion of the Convention Center, the City Council also expressed a desire to obtain the Palm School.
In response, Eckhardt proposed a property swap. The city would give the former HealthSouth Rehabilitation Hospital near Red River and East 12th streets, as well as the city-owned tract where the Expo Center is located, in exchange for the Palm School.
Eckhardt also proposed the city throw in access to the hotel tax as part of the deal. However, the City Council shut the door on that possibility Aug. 9, when it voted to max out the city’s available hotel tax.
The addition of a hotel tax election could create a level of confusion for Austin voters. Earlier this month, the Austin City Council ordered an election on a petition initiative related to the Major League Soccer stadium that will be styled as Proposition A on the ballot. The Travis County hotel tax item will also be called Proposition A.
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This is what they would be looking to build:
