Study shows Victoria can support hotel-convention center

Aug. 20, 2011 at 3:20 a.m.

Victoria can support a new convention center and hotel, a new study will show.

While this finding adds to a slew of other positive local business news, it also leads to other important questions, namely those regarding the economics of building and operating such a center.

The Victoria City Council in mid-May approved $30,000 for a study to determine the feasibility of a convention center and hotel. Although researchers have not yet presented findings to the council, the Advocate learned the study shows there exists a market here for more meeting space and hotel rooms.

During coming weeks, consultants from the Houston branch of PKF Consulting USA, who declined comment for this story, will finalize its report. The city expects a formal presentation later this month or early next.

At that time, the researchers will unveil suggestions for those looming questions:

Where is the best location for the center?

How much would it cost the city to build and operate the center?

Would estimated revenues - hotel taxes and spinoff sales taxes - justify the investment?

Could financial packages lure a private hotel chain?

Already, several outside hotel chains are interested in Victoria, said John Kaminsky, the city's director of development services.

"I'm guessing a lot of them are waiting to see what details come out in the study," Kaminsky said. "A lot of this will depend on the developer, what their interest is and if it fits in with what the study says we can support."

During the past three months, consultants, in part, surveyed regional business owners, municipal leaders, nonprofit operators and others to learn about the type and size of group meetings held now, plus the needs that remain unmet.

These findings will show whether Victoria needs a big or small convention center, plus the number and configuration of meeting rooms and exhibit halls.

City Councilman Gabriel Soliz said that while he hopes the study shows the best location for a convention center is near the Victoria Community Center, 2905 E. North St., other leaders have discussed other addresses. They include these parcels:

At the corner of Loop 463 and Houston Highway.

Near the Huvar Recycling Center, 124 Huvar St.

Near Lowe's on North Navarro Street.

At the intersection of Loop 463 and U.S. Highway 87 North.

Adjacent to Home Depot on Loop 463.

PKF consultants will rank the sites according to their merits. Such centers often fare best near areas that offer high visibility, retail outlets and restaurants, the consultants told the Advocate in May.

"You want to have it in an area that has multiple draws, multiple venues - as many reasons as possible for people to visit," said City Councilman Tom Halepaska.

Of course, just because the Houston research group determined Victoria can support such a center does not mean the city will build one. Much of that decision will rest on the financial portions of the study - estimated operating expenses and revenues, as well as private investment and other options.

Sometimes, municipalities pay to build the convention center while a developer funds construction and operation of the adjoining hotel, Halepaska said. The hotel chain then manages the convention center for a fee.

"It's generally cheaper to have a professional company run a convention center rather than city employees do that work," Halepaska said. "Just remember: Nothing has happened yet. Some of this stuff is so blasted complex, at any point the project could get the kiss of death."

If, after reviewing the study's results, the city council votes in favor of building the center, it would then weigh the many financing options, including private investment or a bond referendum.

Assistant City Manager Bruce Ure, however, said it's premature to discuss such choices.

"There has not been any established hard-and-fast timelines with this analysis, but clearly as soon as the report is finalized, we will present it to City Council as soon as possible," Ure said by email. "We believe the hotel-convention study is very important to the future of the city and we anxiously await the results."

A convention center and hotel, after all, represents a beacon the city could potentially use to lure out-of-town visitors and their wallets. While such a development does not scream primary jobs or massive economic injection, it could anchor a new wave of growth.

"I think it could be fairly significant," said Kaminski, the city's director of development services. "Developers of these centers want to be in a place that would attract new restaurants and shops.

So, the impact of this project is more than just a new hotel with some meeting space. It could be a spinoff of new businesses altogether."



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