October 08, 2008
Council still looking at convention center hotel options

We sure do seem to want another convention center hotel around here, don't we?

The city is ready to step up efforts to land a second convention center hotel, offering a local tax rebate to encourage developers to build within walking distance of the George R. Brown Convention Center.

The City Council could vote on the rebate plan during Wednesday's meeting. If approved, the city would return to the developer its 7 percent share of the 17 percent hotel occupancy tax, or "HOT tax." The remainder of the HOT tax is divided among the county, state and the Harris County-Houston Sports Authority.

To qualify for the rebate, a developer would have to build a 350-room hotel within walking distance of the convention center. New hotels built elsewhere in the central downtown district could get a 50 percent rebate on the tax.

A year ago, the city hoped market forces would be enough to encourage new hotel development downtown, said Richard Campo, chairman of the Houston Convention Center Hotel Corp., which owns the property.

"The credit crunch has definitely caused a big dislocation in the market, and we think other incentives are needed," Campo said.

Maybe that's a sign that now is not such a good time to be considering a plan like this? You could convince me otherwise, but I think the burden of proof is on the "do something" side, not the "do nothing, at least for now" side. The city has done pretty well collecting revenues lately. Given the increasingly fragile state of the economy, is this a wise investment of a decent chunk of those revenues at this time? Again, this doesn't have to be "now or never". It can be "now or later". So what about it?

Downtown officials frequently have said another hotel near the convention center is critical to drawing larger conventions and meetings to Houston.

"Cities are ranked by the number of hotel rooms they can block and offer to convention delegates," said Dawn Ullrich, director of the city's Convention and Entertainment Facilities Department. "That isn't part of our strong suit right now.

"Many of our competitors can offer room blocks of 5,000 to 6,000 rooms within walking distance, or at least within a mile," she said, mentioning Dallas and San Antonio. "In order to do that, we have to bus them to outlying hotels, and that adds complexity and expense."

How many conventions that meet those standards are there, and who would we be competing against to land them? All due respect, but just having the space available doesn't mean conventioneers will chose us over, say, Las Vegas or Orlando. It'd be nice to have a realistic assessment - that is, not one generated by a hotel consultant hired by the city - of that. And assuming that we could compete, what kind of retuirn on the investment are we looking at? Again, give me something reality-based here, and not the usual voodoo economics that get passed off at times like these.

Oh, and a still-unanswered question for me is how (if at all) would another downtown convention center hotel be affected by the Astrodome Convention Center project, assuming it ever comes to fruition? Would they be fighting for the same kinds of bookings, or would they occupy different parts of the market?

The tax break could push forward the stalled development of an Embassy Suites west of Discovery Green and possibly spur redevelopment of the vacant Days Inn near the Pierce Elevated, said Andy Icken, deputy director for Planning and Development in the Department of Public Works and Engineering.

Ah, the old Days Inn. It will truly be a new chapter in Houston downtown history when that thing has been transformed into something worthwhile. It's a bit of a hike from the GRB, but a short ride on the Main Street/East End rail lines, so having it in the mix is as plausible as anything else.

Posted by Charles Kuffner on October 08, 2008 to Elsewhere in Houston
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