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Austin: City to Begin Negotiations to Purchase Two Blocks for Convention Expansion

Feature Photo: The Austin Convention Center. Image: Google Streets.

Posted: 9-18-2020

by Art Benavidez

Austin (Travis County) – City Council on Thursday built up its convention expansion team and authorized the purchase of downtown real estate for that purpose.

The project team was beefed up after City Council hired a San Antonio law firm and a technical consultant. The council also amended their contract with Conventional Wisdom, a marketing consultant firm that has been participating in the marketing feasibility study.

In addition, council agreed to an expense of up to $6.3 million for the purchase of two city blocks west of the existing convention center. The city will begin the process of acquiring the properties between East 2nd Street on the south and East 4th Street on the north, between Trinity and San Jacinto Boulevard.

The law firm recruited for the project is San Antonio-based Hornberger, Fuller, Garza & Cohen. They will consult the city on legal issues related to the expansion. The agreed upon fee is $310,000.

The convention expansion, which has been a topic of discussion for years, went into motion at the start of this year when City Council hired the HVS consulting firm to begin a financial analysis. 

The expansion project is still in the conceptual phase, however, City Council hopes to move to the design phase soon. 

In May of 2019, the city approved a $1.2 billion preferred option to expand the convention center, but this week the city sought input on the economic impact that a redeveloped convention center would bring to the city .

While city officials believe that the expansion is needed, they don’t expect to have the exact cost of the project until the spring of 2021.

A 2019 University of Texas architectural study revealed several proposals. The one favored by the city calls for expanding the center to the west and then demolishing and rebuilding parts of the current convention center.

Currently, the Austin Convention Center is a four-story building that takes up three-city blocks, with 881,000 square feet, and is located at 500 East Cesar Chavez Street.  

Based on current planning assumptions, the expansion will occur in three phases. Currently, city staff estimates on the project timeline for completion of the total expansion, starting from when phase one construction begins, range from eight to ten years.

Austin Convention Center Senior Public Information Specialist Derick Hackett said that the city has not hired an architect for the expansion project.

“As the design proceeds on the western expansions and eastern redevelopment, the construction phasing and timeline will be refined,” he said. “The eight to 10 year (time) frame is a preliminary estimate until then. The Convention Center continues to evaluate the impact of COVID on the expansion project.” 

After the city comes to terms with the owners of the buildings of the two desired city blocks, this will initiate the first phase.

The first phase of the project would open in 2024, while keeping the existing convention center open and operating.

The second phase of expansion would be the demolition and replacement of the southern part of the current convention center.

In the third phase of expansion, the north part of the current convention center would be demolished and replaced.  

On Tuesday, the city heard from a consulting firm regarding the economic impact to the city.

Tom Hazinski, managing director of HVS Convention, Sports & Entertainment said that while they conducted the market analysis study before the pandemic hit, he had no reservations about the ability for a new convention center to pay off in the long run.

“We also did a comparison of the existing facility to comparable venues in Texas–in Houston, in San Antonio, Dallas, Fort Worth, etcetera. And Austin is sort of at the bottom of those in terms of the total function spaces offered,” Hazinski said. “When we say function space, we mean exhibit space, banquet space or ballroom space and meeting space. So it really is behind.”

Hazinski said that the proposed expansion would put the convention center near the top of Texas convention facilities and above most of its national competitors with an annual economic impact of $801.7 million.

“The Austin Convention Center, currently the third-smallest venue among the 16 comparable metro areas included in the study, could be the second largest (economically) among those markets upon completion of the expansion in 2033,” he said.

Hazinski said that his biggest concern wasn’t COVID-19 and the immediate health concerns because he believed there would be a vaccine in the near future, but rather the recession that is sure to follow because of the slowing of the economy.  

“My bigger concern, and the concern that we built into this analysis, is what the pandemic’s long-term impact is on the economy,” he said. “What we have seen in past recessions is it takes a long time to recover from a recession and we are going to be in a recession.

So we look back at other recessions and how recoveries have occurred and meeting and group business is the slowest piece of business in the hospitality industry to recover. Of particular concern to us is how deep the damage is going to be and something that I think is of increasing concern to me, and it should be to everybody, is the lack of federal stimulus to support the economy.”

Given this consideration, Hazinski said that the length of time it would take to expand the convention center will benefit Austin because it would give the economy time to recover.

Council member Kathie Tovo appreciated Hazinski’s presentation, but raised some concerns as to the ability of the convention center industry to return to normal.

“It’s important we have a design that is flexible and adaptable, and usable for a variety of circumstances because it would seem to me none of us know at this point what might change among the conduct of the convention industry and what might be some new preferences,” she said.  

VBX Project ID 2015-2955.


art@virtualbx.com

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By |2020-09-21T10:08:06-05:00September 18th, 2020|Construction Preview, Feature Story|

About the Author:

Art Benavidez (Construction News Reporter, Central Texas) is a seasoned journalist with over 15-years of experience in writing breaking news and in-depth features at the local level. He honed his research and reporting skills in newspapers and magazines throughout South and West Texas along with expertise in crafting digital content as Managing Editor of New Image Marketing Research Corporation. Benevidez is a Texas native and graduate of UT-RGV.

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