DALLAS – Harris County Commissioners on Tuesday will consider a $194 million plan to turn the abandoned Houston Astrodome into a convention center and exhibition space in time for the 2017 Super Bowl.
After considering 22 proposals from private investors last week, the Harris County Sports & Convention Corp. chose to recommend its own plan for preserving the world’s first air-conditioned domed stadium.
“We’ve made a case as to why we think this community should invest in this concept,” said Willie Loston, executive director of the HCSCC. “There are people who disagreed with us. We have indicated that we would like to see this concept go to the voters to see if they agree with it.”
The project would cost an estimated $194 million and take about 30 months to complete. Bonds would require voter approval, officials said, but the amount of issuance could be half of that or less, provided commissioners decide to go forward with the project.
“That’s probably going to be referred to the budget office to see whether they can whittle that $194 million down to, say, $95 million just to name a figure,” said Joe Stinebaker, spokesman for Harris County Judge Ed Emmett.
The proposed “New Dome Experience” would create 350,000 square feet of exhibition space by removing all the interior seats and raising the floor to street level. Other changes include creating 400,000 square feet of plaza and green space outside the dome.
The walls of the current dome would be converted to transparent material on four sides, allowing viewers outside to see the activity within.
Plans envision the Astrodome as the gateway to Reliant Park, the stadium that houses the Houston Texans of the National Football League and will host the 2017 Super Bowl.
Reliant Park includes the 5,800-seat Reliant Arena, the 71,500-seat Reliant Stadium, the 706,000-square-foot Reliant Center for meetings, and what is now called the “Reliant Astrodome.”
The empty, 48-year-old Astrodome costs up to $4 million per year for maintenance. Simply demolishing the Dome would cost about $10 million, officials estimate.
Whether any debt remains on the Astrodome is debatable, Stinebaker said.
“The official line is that there is no outstanding debt on the Astrodome,” he said. “Previously issued bonds been restructured and refinanced so many times that it’s impossible to tell how much of that is attributable to the Dome.”
The last bonds issued specifically for the Astrodome were issued in 1997 as a $47 million refinancing designed to extend final maturity from 2003 to November 2012. However, subsequent debt was issued for improvements to the Astrodome along with other county projects.
The 1997 bonds, backed by hotel tax revenue, came after the NFL’s Houston Oilers abandoned the Astrodome and moved to Nashville. The stadium continued to serve Major League Baseball’s Houston Astros, for whom it was built, until Oct. 3, 1999.
The Astros new stadium, originally Enron Field and now Minute Maid Park, was built by the Harris County Houston Sports Authority.
Ultimately, the sports authority built stadiums and arenas for the NFL expansion Houston Texans and the National Basketball Association’s Houston Rockets, incurring $1 billion of outstanding debt.
The sports authority is now involved in a lawsuit with its bond insurance company, formerly MBIA, now National Public Finance Guarantee Corp.
MBIA/National sought legislation in the last regular session of the Texas Legislature to require the sports authority to ban diversions of tax revenue to purposes other than bond payments or reserves.
The legislative measure, which failed to reach a vote, was designed to prevent the authority from engaging in sports marketing efforts in lieu of building its debt reserves. Currently, National is paying the debt service on sports authority bonds and receiving reimbursement from the dwindling reserves.
The sports authority was a partner in Houston’s successful bid for the 2017 Super Bowl and has been a player in other sports recruiting efforts.
The authority contends that attracting more events to Houston stadiums will not hurt debt service but will, instead, bring more hotel and rental-car tax revenue to support the outstanding debt.
Officials with the county emphasize that the Harris County Houston Sports Authority is not involved in the Astrodome redevelopment and that any debt would not involve the authority’s hotel and car-rental revenue-backed debt.
“They’re not in this,” Loston said. “They may get in it. But there are no plans.”
The Astrodome scenario is exactly the situation National said it hopes to avoid by requiring the HCHSA to focus on debt service instead of new ventures. The Astrodome refinance in 1997 included 1987 bonds insured by MBIA, which was then rated triple-A.
One ratings agency shares many of National PFG’s concerns about the sports authority.
“The current lawsuit with National exemplifies the myriad of potential issues that could arise should the junior fixed rate bonds default in the future,” wrote Moody’s Investors Service analyst John Medina in a May 31 report.
“At some point in the future the additional required reserve may be depleted if revenues do not grow faster than the junior lien debt service amortization schedule and National may have to pay on the junior lien bonds,” Medina noted. “This could result in a cross default to the senior lien bonds, but neither the senior lien nor the junior lien fixed rate bonds can be accelerated as a remedy for the default.”