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The Midway

And Here's How We'll Pay for the Convention Center Hotel

Mon Feb 18, 2008 at 08:21:36 AM

For those who like to get a jump on their city government's weekly doings, here's one of the agenda items for tomorrow morning's meeting of the city council's Economic Development Committee: the plan for purchasing the land necessary to build the convention center hotel Mayor Tom's rushing through without explaining why the city's willing to spend up to $41.3 million on land valued at $7,345,640. Turns out, city staff tomorrow will recommend to the committee that the city issue $41.3 million in certificates of obligation, which would "be refunded with the sale of revenue bonds for the Convention Center Hotel or the refunding/restructuring of the Convention Center’s existing debt." In other words, the city will issue bonds without asking the voters' permission.

The doc also says this sucker's on the fast track: Should the committee approve the staff's recommendation, it'll go before the full council by February 27. And there's no reason to think it won't fly with the committee: As Sam noted last week, Mitchell Rasansky's the only council member on the Economic Development Committee who voted against spending $500,000 on a down payment for the property. Said Rasansky, the convention center hotel plan is “extremely flawed.” Which is much nicer than what Harlan Crow said. --Robert Wilonsky

2 Comments:

Joe says:

So, we can fast track a useless hotel at the convention center, but the Cowboys and Rangers can't seem to get a stadium downtown? I would love to see the numbers of how many large conventions are held or plan to be held in Dallas anyway. I thought that Dallas had become an unfriendly place to hold that stuff due to the high amount of tax being placed on rooms and such. I think Grapevine has the right idea with the infastructure they have in place.

Lakewooder says:

Here's an interesting article from 2005 regarding hotel occupancy in downtown Dallas. Everything you ever wanted to know about the necessity a new hotel in downtown Dallas can be found in the last paragraph.

Hotel Online
News for the Hospitality Executive


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Hotel Occupancy in Downtown Dallas Hotels Forecasted at Only 54%
Through 2006, While the Entire Dallas Area Hotel Occupancy
Expected to be 63%
By Suzanne Marta, The Dallas Morning News
Knight Ridder/Tribune Business News
Aug. 24, 2005

Dallas' hotel market continues to improve, but it will probably be five years before properties once again see the heady profits of 2000, according to an annual forecast released Tuesday by PKF Consulting.

"We are in recovery and we have seen the bottom," said Greg Crown, a Dallas-based hospitality industry consultant with the firm. "The good times are beginning to come back."

Occupancy for Dallas-area hotels is expected to be flat through next year, at 63 percent, about 6 percentage points above the low point in 2003, Mr. Crown said.

Among the top 50 U.S. markets, occupancy is expected to exceed 68 percent through 2006.

Hotel occupancy rates are considerably lower in downtown Dallas, which has suffered from a lack of convention business in recent years. PKF forecasts downtown occupancy rates of about 54 percent through next year.

Dallas set city records in 2000, when business travel and convention bookings boomed nationwide. Demand at U.S. hotels began to recover in 2003, but Dallas' return has been slower.

In part, that's because the industry can't absorb all the rooms. It's easier to build hotels in Dallas than markets such as New York where "it can take a career just to build a hotel," Mr. Crown said.

The city's mix of visitors has also played a role.

Business travelers, who tend to pay higher rates than vacationers, account for about half of Dallas' hotel customers. But those travelers typically return home on the weekends, leaving empty hotel rooms behind.

About 11 percent of Dallas' hotel customers come for leisure -- a market that could play an important role on the area's long-term health if marketing efforts by the Dallas Convention & Visitors Bureau are successful, Mr. Crown said.

"We're heading in the right direction, its just going to take awhile," he said.

Dallas-area hotels can expect at least two to three years of solid growth as the economy strengthens, Mr. Crown said. But if the city wants to secure strong demand over the long term, it must make its downtown more attractive.

"Dallas has always been a great business destination, but it has never been a great leisure destination," he said. "We have to fix that."

Frank Naboulsi, chairman of the Hotel Association of Greater Dallas and general manager of the Fairmont Dallas, said the city is getting back on track, but still has work to do.

"When you go downtown and see streets that are deserted, visitors aren't going to want to be there," he said. "It's important that we revitalize downtown."


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To see more of The Dallas Morning News, or to subscribe to the newspaper, go to http://www.dallasnews.com.


Copyright (c) 2005, The Dallas Morning News

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