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August 7, 2008

A bad idea that just won't die

astrodome 080708 Isn't it amazing how long bad ideas will remain festering so long as local governmental officials have something to do with it?

After four years of dithering, this Bill Murphy/Chronicle article breathlessly reports that there may be hope for the Astrodome hotel project after all:

Despite their previous staunch opposition to the project, the Houston Livestock Show and Rodeo and the Texans signaled that they may be able to coexist with a convention hotel that would be built in the Astrodome.

Their more conciliatory attitude toward the 1,300-room project was evident in recently submitted reviews of the proposed convention hotel lease.  .  . 

And since the promoters of the project already have a financing commitment lined up, this deal is about ready to take off, right? Uh, well, maybe not:

Even if the Texans and the rodeo drop opposition to the project, Astrodome Redevelopment Co. still needs to obtain financing for the ambitious, $450 million effort to transform the building once known as the Eighth Wonder of the World into a convention hotel.

Astrodome Redevelopment president Scott Hanson said the company's efforts to obtain financing have been hampered by an inability to strike a lease with the sports corporation, which oversees Reliant Park operations, including the Astrodome.

"The (commercial lending) market is much tougher now. Quite frankly, we have been waiting on getting an approved lease before we go back out into the marketplace," he said.

So, what happened to that financing commitment for the project about which the Chronicle previously reported? What the heck, even in a tough lending market, half-a-billion or so in financing shouldn't be all that difficult to line up for a project that almost certainly will be a financial success, now could it? Well maybe, except that the parent company that owns the model for the Astrodome hotel project -- The Gaylord Texan -- is not exactly doing all that well:

The Star-Telegram has a story today about the Gaylord Texan’s parent company, Gaylord Entertainment, reporting a second quarter revenue increase of 36 percent over last year—but a net income drop of 91 percent. The company reported a net income of $106.8 million in Q2 ‘07; for Q2 ‘08, they’re looking at a net income of $8.78 million. That’s right, eight. They blame it on decreased attendance at conventions. Does this bode well for the convention center hotel business?

So, let's get this straight. After not being able to arrange financing for this boondoggle during the robust equity and credit markets that existed up to 2007, the promoters think they are going to be able to line up financing in the current tight financing market for a business that is not even doing particularly well?

Give it up folks.

Update: Kevin Whited suggests that the promoters' PF staff should retain the Chron's Murphy.

Posted by Tom at August 7, 2008 12:01 AM |

Comments

Short comment: Houston is lacking in two major amenities that would improve its ability to attract convention business. Howard Barnstone, many years ago, pointed out to us in class that Houston has only a fraction of the Hotel rooms that Chicago and other cities have. This is due to a rather strange Houstonian dislike for highrise building. One of the ones who pushed for highrise living is past Mayor Bob Lanier.

Second, Houston lacks pedestrian spaces. Have you ever been to Wrigley Ville? The Cubs never win a pennant, well mostly not, and Wrigley Stadium is sold out every afternoon. I suggest that from the '60's Houston should have poured a mile of Hike and bike like trail for every mile of freeway.

Forget that ridiculous Hotel Astrodome... have you ever been down on the playing field of the Dome? Acoustics are impossible; that hotel would be a nightmare. It may as well be a chicken coop.

Oh, yes, and partition your city, and get rid of the big central government.

Posted by: MooPig Author Profile Page at March 2, 2009 9:11 PM

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