DALLAS — Amid growing pains in an economic downturn, Austin is considering a second convention hotel while laying the groundwork for a $100 million transportation bond issue.
At the same time, Mayor Lee Leffingwell is backing off plans to call for a vote in November on a light-rail project that faces political, managerial, and engineering challenges. Instead, he is calling for a November vote on $100 million of bonds for more traditional road projects.
“Doing nothing is not an option if we want to help relieve Austin’s crippling traffic congestion, plainly one of the greatest threats to our quality of life,” Leffingwell wrote in a message to citizens. A $100 million issue for roads, bike paths, and trails would represent half of the triple-A city’s $200 million bond capacity without requiring a higher tax rate, the mayor said.
The City Council will begin working on a plan this month as it also discusses subsidizing a second hotel near the downtown convention center that was expanded in 2002. An 800-room Hilton hotel opened as the first convention center hotel in December 2003, financed through the city’s tax-exempt bonds backed by hotel revenue.
Richard Suttle Jr., an Austin attorney who represents hotel operator White Lodging, told the council that a proposed 1,000-room Marriott hotel on Congress Avenue has been stymied by financing difficulties and would require the city’s help.
But Heywood Sanders, a professor of public administration at the University of Texas at San Antonio, urged the council to proceed cautiously, citing the convention center’s own bookings and the problems of convention hotels in other cities.
Austin’s convention center bookings have grown to 60 last year from 51 in 2004, but hotel room-nights have fallen to 165,029 in 2009 from 190,220 in 2004.
For Leffingwell, light rail is a key factor in the city’s development. With some of the worst traffic congestion in Texas, Austin seems to many as a natural spot for the service with its high concentration of government and university offices in the city that stretches in an elongated pattern for miles to the north and south. After a long delay, a new commuter-rail line is scheduled to start today linking Leander to downtown Austin.
But problems getting the line up and running are seen as a possible strike against a more ambitious light-rail system. Austin voters defeated a proposed $1.9 billion light-rail system in 2000. And Capital Metro, the regional transit agency, has said it does not have the resources to operate a light-rail system.
The financial plan sketched out so far would raise levies from the downtown business district, with federal funding for outlying extensions. But the city does not yet have a firm grasp on how much federal money is available or how to cover operating costs that could exceed $20 million per year.
“My hope and expectation is that the city will be ready to proceed with an election before the end of 2011,” Leffingwell wrote.