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Houston Convention Center Hotel Corporation

Here comes the Convention District

We’ll see what this turns into.

The newest vision for the eastern edge of downtown includes hotels and residential buildings in place of what are now parking lots.

Officials also picture a bustling pedestrian scene where shops and restaurants line the streets leading to the city’s 1.2-million-square-foot George R. Brown Convention Center, which, too, would grow as part of their plan.

The group that operates the nearly 25-year-old convention center and other city-owned buildings will publicly unveil its vision this month.

“The economic impact over the past 25 years has been significant,” said Dawn Ullrich, president and CEO of Houston First Corp. “We’re going to build on that.”

The 2025 Master Plan takes a long-range approach to the area, which officials hope to brand as the “Convention District.” The boundaries would be U.S. 59, Bell, Austin and Congress.

The plan focuses on three main components: new hotel rooms, more amenities and an expansion of the convention center, which would happen once the other elements were complete.

Some of the improvements will be financed by Houston First, which could also purchase land to help carry out the plan.

Houston First is the spinoff of the city’s Convention and Entertainment Facilities Department and the Houston Convention Center Hotel Corporation, which runs the Hilton Americas. The idea behind it was to allow the convention center to have more freedom to make decisions, which would allow it to be more innovative and grow the business. Given that plans like this don’t generally come out of nowhere in six months’ time, you have to figure it was part of the reason for the spinoff. Houston First is seeking private investors for this project, which is fine as long as there’s no assumption there will be public funds as backstops. If private investors think they can make this work, more power to them.

Meeting planners have also cited the area’s lack of amenities, saying the convention center is blocks away from most of downtown’s dining and shopping.

“For the out-of-towner, it’s not a significant draw,” said Alan Colyer, a principal with the Gensler architecture firm, which led the overall planning effort for Houston First that began more than a year ago.

The closest collection of shops, restaurants and entertainment venues is at Houston Pavilions, about five blocks away.

Looking at the map of the area, I’d guess that EaDo and its amenities aren’t far away, but getting to them isn’t pedestrian-friendly, at least not yet. The forthcoming Southeast and Harrisburg light rail lines will help with that, and there are other options to consider, like the revived downtown trolley, REV Eco Shuttle, and perhaps a new frontier for the Houston (formerly Washington) Wave. A little creative thinking could go a long way, though some more options nearby wouldn’t hurt, either. Again, we’ll see how big and how comprehensive the Houston First people’s thinking is when they release their plan.

Council approves deal to spin off Convention Center

Meet Houston First, which merges the city’s Convention and Entertainment Facilities Department and the Houston Convention Center Hotel Corporation, which runs the Hilton Americas.

The corporation will not have to come to the council to get expenses approved. The unionized work force of the city department will become private-sector employees of the corporation. The corporation is free to take chances by, for example, launching new trade shows without worrying that taxpayers are on the hook if the event is a bust.

Houston First will rent the GRB, Jones Hall and the Wortham Center from the city.

[…]

The concept has been talked about for a decade, but the plan approved on a 14-1 vote by City Council on Wednesday came together in recent months as Mayor Annise Parker’s administration looked for ways to close a $75 million budget gap without raising taxes.

The budget proposal she released last month banked on council approval of the merger and the $10 million in rent and fees the corporation will pay the city in the fiscal year that begins on July 1.

See here for some background. The story notes that the Mayor’s office overcame some initial skepticism from various Council members, including CM James Rodriguez in whose district the Convention Center is and who was unhappy about not being briefed before the plan came to light. If the end results are similar to those of the Houston Zoo, which was spun off in 2002, then this should work out fine.

More on the city’s convention center spinoff proposal

This press release from the Mayor’s office about the proposed spinoff of the city’s convention business hit my inbox this afternoon:

Mayor Annise Parker today recommended consolidation of the city’s Convention & Entertainment Facilities Department (CEFD) into the Houston Convention Center Hotel Corporation (HCCHC). The proposal, if approved by City Council, would provide the city an extra $10 million in the next fiscal year, thus helping to avoid some planned layoffs.

Under the proposal presented to City Council’s Fiscal Affairs Committee today, the newly renamed organization, called Houston First Corporation, would lease CEFD properties from the city for an $8.6 million pre-payment of rent, payable in the next fiscal year, which starts July 1. In addition, an annual lease payment of $1.4 million would also begin in FY12. Future increases in the lease payments would be tied to the Consumer Price Index.

CEFD properties include the George R. Brown Convention Center, Wortham Theater Center, Jones Hall for the Performing Arts, Jones Plaza, Miller Outdoor Theatre, Sesquicentennial Park, Root Memorial Square and several other smaller park and performing arts facilities.

“This is somewhat different from 2002 when the city created a non-profit organization to manage the Houston Zoo because this time the city will receive annual revenue from leasing these facilities.” Mayor Parker said. “Those monies will help the city’s bottom line and, in turn, reduce the number of hard-working employees we have to layoff.”

“Our facilities bring in revenues, but their primary purposes are to serve as economic generators for the city by increasing the levels of convention and tourism business,” said CEFD Director Dawn Ullrich, who would serve as president of Houston First. “We could operate more efficiently as part of Houston First, which would enable us to generate more revenues to the city through increased bookings in the long run. The increased revenues will also allow us to continue to maintain all of our facilities in first-class condition.”

“With consolidation, we create a single entity that’s focused on the operation as a whole for the long term,” said HCCHC Chairman Ric Campo, who would chair the board of Houston First. “We can develop a unified, campus-like approach to soliciting convention business for both the convention center and the Hilton Americas.”

The city is working with the HOPE Union on arrangements for the CEFD employees who will become employees of Houston First Corporation.

The Mayor would appoint and City Council would confirm Houston First’s nine board members. The Mayor recently appointed or reappointed current members of the HCCHC board, who would simply remain in place for the duration of their terms.

The city created the HCCHC in 2000 to govern the construction and operation of the Hilton Americas-Houston.

City Council approval of the merger is tentatively scheduled for May 18.

That addresses some of the concerns raised by Hair Balls and Nonsequiteuse, though not all. I am certain that this will get tagged by someone on Council on the 18th, so there will at least be some time to discuss the remaining issues. If the city really is working with HOPE and they are agreeable to the plan, that will cover a lot of it for me. We’ll see what happens in Council.

UPDATE: Hair Balls reports on Council’s reaction.

Spinning off the convention business

The city is looking to get out of the convention and entertainment business and maybe make a few bucks in the process.

The city’s Convention and Entertainment Facilities department currently runs the George R. Brown Convention Center and other city-owned venues downtown. A plan on its way to City Council next week would make the department a separate corporation that does not need council approval for its purchases. About 120 people who work for the department no longer would be city employees and would lose their union protections under the plan.

A summary of the plan obtained by the Houston Chronicle outlines the creation of Houston First, a merger of the city department with the Houston Convention Center Hotel Corporation, a city-created nonprofit that runs the Hilton Americas hotel adjacent to the convention center. Houston First would have its own board of directors and lease the convention center and other buildings from the city for $2 million a year. It would pay the first five years’ rent up front during the fiscal year that starts on July 1.

That cash infusion would bring down next fiscal year’s projected budget gap to $75 million, a shortfall that had been as high as $130 million but has steadily shrunk as the city lays off employees, consolidates operations and finds other savings.

[…]

The new corporation also would run the Wortham Center, Jones Hall and the Miller Outdoor Theatre.

I’m generally not a fan of privatization – Lord knows, the track record of it in this state sucks – but this doesn’t seem unreasonable to me. Unlike handling food stamps and other state benefits, running these facilities doesn’t strike me as a core function of government, and there’s no reason why a private non-profit couldn’t do a perfectly good job. As the story notes, the city spun off the zoo in a similar fashion in 2002, and I daresay it’s none the worse for wear. I’d like to know what happens at the end of the 15-year lease – do the terms get renegotiated, or does the non-profit get the businesses free and clear? – but otherwise I’m not particularly alarmed. What do you think? Nonsequiteuse has more.