December 18, 2005
Get ready for the inevitable public money request for the Astrodome redevelopment project
Following on this post from earlier this year, this Bill Murphy/Chronicle story updates developments in regard to the seemingly delusional plan to convert the Astrodome into a Gaylord Texan-type one-stop destination hotel for conventioneers and their families.
Astrodome Redevelopment Co., the developer of the project, envisions a 1,200-room hotel, a winding indoor waterway with small tour boats, mill wheels, walkways and lush landscaping. The developer is currently finalizing its redevelopment plan and a letter-of-intent to be delivered to the Harris County Sports & Convention Corp. next month. If Harris County signs off on the letter of intent, then the developer would attempt to secure financing for the half-billion dollar project, not an easy task in Houston's already soft hotel market that includes a relatively new 1,200 room downtown convention center hotel that has had anything but robust occupancy. At the same time, the developer will probably look to obtain a substantial financing subsidy from Harris County in the form of a long-term lease on the facility.
Frankly, the public money request is almost inevitable because the typical private market for such projects -- companies such as Disney, Universal Studios, Six Flags, Clear Channel and Anschutz Entertainment, and local entertainment czar Tilman Fertitta -- has already passed on participation in the Astrodome hotel deal. Consequently, there is little reason to think that Astrodome Redevelopment Corp. -- whose owners have virtually no experience developing or running a Gaylord Texan-type convention hotel -- will have any better luck in arranging private financing for the project.
Meanwhile, a host of other logistical problems would have to be worked though before such a project could become a reality, not the least of which would be to coordinate parking between the hotel project, the Reliant Center Convention Center, the Houston Texans football team, and the Houston Livestock Show and Rodeo. Can you imagine the warm and fuzzy feelings that guests would have for the Astrodome hotel after having to negotiate traffic around the Reliant Center complex during the Rodeo, a Texans game, a big concert at Reliant Stadium or a big convention at Reliant Convention Center during their stay at the hotel? A facility such as the Gaylord Texan never has to deal with such headaches and has the advantage of being just up the road from an airport (D/FW) into which guests can fly in from around the country. Although the Dome is reasonably close to Hobby Airport, it's not as easy for most out-of-state guests to fly into Hobby as it is far off Intercontinental, which is an hour away from the Dome under the best of traffic conditions.
Accordingly, hold on to your pocketbooks as the details of this deal play out over the next year. Not much takes place in the Dome anymore as the County has decided that it is uneconomic to put down the playing field anymore for high school football games. Nevertheless, it costs the County about $1.5 - $2.0 million annually just to keep the Dome open for the Rodeo and the occasional dinner party or bar mitzvah on the Dome floor, and it would cost about $600,000 a year just to mothball the facility. Even demolition of the Dome would probably cost at least $10 million. That's a lot of money, but its nothing like the cost of dealing with a huge failed hotel project. Just ask the City of Houston.
Posted by Tom at December 18, 2005 5:34 AM |
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