DALLAS — Bexar County, Tex., has earned an upgrade from Standard & Poor’s to A from A-minus on its venue project revenue bonds as it goes to market with $64 million of debt backed by tourism-related taxes.
“The ratings reflect our view of the county’s strong regional business and convention and tourism base, and strong debt-service coverage levels,” said analyst Lauren Spalten.
Moody’s Investors Service rates the bonds A1 and Fitch Ratings gives them an A-plus, both with stable outlooks.
The bonds are expected to price Nov. 16 through negotiation with Cabrera Capital Markets.
Proceeds from the bonds will be used to refund short-term debt issued in August to continue various special improvements, including arena and ground refurbishments, amateur sports facilities, and performing arts and cultural facilities
The county’s venue tax, originally earmarked in 1999 for construction of the AT&T Arena, was extended by voters in 2008 to cover other tourism-related projects, including expansion of the city’s historic River Walk north and south of downtown.
Total debt cannot exceed the $415 million of motor-vehicle rental tax and venue tax bonds authorized by voters. The projected amount of debt remaining to be issued is about $180 million.
Though down in 2009, Bexar County’s venue-tax revenue growth has been aided by the presence of five of the state’s top 10 tourist attractions, including the Alamo, the San Antonio River Walk, Sea World, Six Flags over Texas, and the San Antonio Zoo, Fitch noted.
Hotel and rental car tax revenues have grown by compound annual averages of 7.1% and 4.9%, respectively. Due to the current economic slowdown, revenue declined by 15.5% and 6.4%, respectively, in fiscal 2009. In fiscal 2010, both revenue streams experienced a rebound, with motor vehicle and hotel tax revenues posting gains of 5.6% and 6.1%, respectively, according to Fitch.
With 1.4 million people, Bexar County is Texas’ fourth-most populous county. San Antonio is the county’s seat and main economic driver. Though military and tourism have long been economic anchors, medical and biomedical companies are now the leading force, contributing an estimated $16.3 billion to the area economy. In addition, in late 2006 Toyota Motor Corp. opened a new truck-manufacturing facility in San Antonio, bringing nearly 2,100 new jobs to the area.
Bexar County teamed up with the city, the San Antonio River Authority, and nonprofits to extend the River Walk from downtown to the zoo and museums to the north and to the mission district to the south. Though officials anticipated economic development along the new sections, that has been slow to develop because of the continued weak economy.