Demanding Answers as the Dallas Convention Center Hotel Moves Forward

As Mayor Tom Leppert pushes for a convention center hotel, critics demand more details and less tax money. At least, those who haven't been silenced do.

Comments (0) By Sam Merten Thursday, Apr 17 2008

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In his Brookings Institute research brief, Sanders maintained that U.S. exhibit space grew by 51 percent between 1990 and 2003 while demand plummeted.

Chicago, which annually is among the top convention cities and a major rival to Dallas, has poured more than $1.5 billion of taxpayers' money into its McCormick Place Convention Center over the last 25 years. Even with its recent expansion making it the largest exhibition facility in the United States and the addition of an 800-room hotel that opened in 1998, the convention center isn't anywhere close to reaching the attendance figures it hit prior to 2003.

Brian Harkin

If the council votes on April 23 to approve financing for the purchase of the hotel's site, Mayor Leppert's vision of a convention center hotel will be one step closer to becoming a reality.

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Dallas City Council

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Closer to home in Houston, the Hilton Americas, a 1,200-room hotel attached to the George R. Brown Convention Center opened in December 2003. The city owns the hotel, which was publicly financed by selling more than $300 million in bonds. After the sale, the total debt on the hotel was $482 million. But with little principal paid and changing interest rates, the debt actually increased by $6 million in its 2006 audit, and the hotel's losses continue to grow as it has added to its deficit in every year of its operation. In addition, the 977-room downtown Hyatt Regency went into foreclosure approximately a year after the Hilton Americas opened.

One of Sanders' harshest critics is HVS Convention, Sports & Entertainment Consulting, which has a more upbeat assessment of the industry. In one of its reports to the Dallas City Council, HVS said that convention attendance in Dallas increased nearly 24 percent from 2006 to 2007, and it expected this "strengthening trend" to continue through 2010. Each time the city has hired HVS to study the economic feasibility of a convention center hotel (2001, 2004 and now in 2008), it has reached virtually the same conclusion: The Dallas market needs more hotel rooms, hotel supply is the reason for lost convention business, and a headquarters hotel would increase demand at the convention center.

Assistant city manager A.C. Gonzalez couldn't agree more. He co-chairs the city's convention center hotel task force and says the hotel is an obvious component of the city's inability to compete as well as it should for major conventions. He stresses that the convention center business is a huge piece of local economy and should not be taken for granted. "Talk is cheap, but until you've tied down the property, that's the beginning point," he says. "You either improve in the face of increased competition or you choose to give up."

With the city moving forward on the purchase of the Chavez property and the use of public money to develop the hotel, Mayor Leppert's unflinching support for the project could be enough to make it happen. Gonzalez says Leppert has brought "strategic leadership" to the project along with energy and "additional clarity."

Sanders has seen this before. He says that like Houston and other cities, Dallas has a standing policy commitment to make this hotel a reality. "Based on the public statements from the mayor and the information that's been laid out by city staff, it's pretty clear that the city is committed to doing this project," he says. "It sounds like Dallas decision-makers have found the answers before they've even fully posed the questions."

With Rasansky now banned from the debate and Hunt still seen as an outcast after her stance on the Trinity referendum, the council is poised to take a decisive step on April 23, when it is scheduled to vote on whether it will approve financing for the purchase of a site for the hotel.

"All I want to know is what the hell is the city participation in this?" said Rasansky, pre-muzzling. "How in the world can we go forward without knowing what the cost is?"