In Monday’s Chronicle, the editors tell us they think the proposal to turn the Astrodome into a hotel is a good one, as long as the taxpayers don’t have to pay for it:
The Harris County Astrodome must be preserved, but not at extravagent [sic] cost to the taxpayer while private investors and contractors profit.
[snip]
A private company, Astrodome Redevelopment Corp., has proposed to remodel the Dome into a 1,000-room convention hotel and entertainment complex. The plan hinges on a detailed analysis of potential profitability. The company is asking that hotel taxes generated by the project be used to defray the construction cost.
It is good to see the editors take this stand, although with the Chronicle‘s relentless advocacy for Metro’s light rail, it was unknown which side they would take.
There is one sentence, however, that is worthy of a bit more attention:
Another crucial calculation to be made is whether diverting hotel taxes to pay for a huge hotel in the Astrodome would restrain or reduce the income stream of hotel taxes needed to pay for three new sports arenas and the city’s convention center hotel.
The Harris County-Houston Sports Authority had to issue new bonds in August to make up for a shortfall in hotel tax revenue:
The new bonds were needed to make up for declining hotel and car rental tax revenues, which the authority receives to pay off bond debt. In 2002 and 2003, the revenues sagged 10 percent.
To meet the annual payments for $900 million in previously issued bonds, the authority had projected annual 3 percent increases in hotel and car rental tax revenues.
“September 11 came and the recession came, and the hotel and car rental taxes have not been growing 3 percent. They’re declining,” said Oliver Luck, sports authority executive director.
So we already know that hotel tax revenues are not what earlier projections said they would be. The Chronicle editors should have mentioned that.
Here is the full Chronicle editorial:
The Harris County Astrodome must be preserved, but not at extravagent cost to the taxpayer whileprivate investors and contractors profit.
When it was completed almost 40 years ago, the Astrodome was declared the Eighth Wonder of the World. Along with NASA’s Mission Control, it put Houston on the map and burnished its reputation as a city with a future.
Little used now, the Astrodome reflects a glory that belongs to the past. History, however, is a compelling reason to preserve the landmark.Demolition of the Astrodome would be the equivalent of Rome’s pulling down the Colosseum because the gladiators moved on.
A private company, Astrodome Redevelopment Corp., has proposed to remodel the Dome into a 1,000-room convention hotel and entertainment complex. The plan hinges on a detailed analysis of potential profitability. The company is asking that hotel taxes generated by the project be used to defray the construction cost.
Even if the study indicates such a project could make money, the Harris County Sports and Convention Corp. and Commissioners Court should learn the answers to other important questions:
What effect would a convention hotel in Reliant Park have on the city’s goals for the George R. Brown Convention Center, recently doubled in size, and the attached Hotel Americas? Downtown hotel rooms have doubled since 2002 and now number 5,292. At the same time, occupancy rates have fallen from about 70 percent to 50 percent.
Willie Loston, executive director of the county corporation, said a convention hotel in a converted Astrodome would encourage additional use of Reliant Park. “That would not be at the expense of the George R. Brown,” he said. “We’re trying to attract business to Houston that doesn’t come here now.”
However, the city’s convention hotel, its enlarged convention complex and hundreds of additional rooms in private downtown hotels are counting on new business. According to Loston’s formula, the city would have to be content with its current level of business while new business went to the county complex.
Another crucial calculation to be made is whether diverting hotel taxes to pay for a huge hotel in the Astrodome would restrain or reduce the income stream of hotel taxes needed to pay for three new sports arenas and the city’s convention center hotel.
Any proposal that would save the historic Astrodome from the wrecking ball or deterioration from disuse has much to be said for it. However, the taxpayers, who still owe $50 million on the Dome, must be protected from exploitation by private investors and contractors and not be left with financial liability if the project does not live up to expectations.
