Mayor White pulls trigger on downtown hotel development scheme
On a day when most Houstonians are focused on that little hurricane out in the Gulf, Mayor White decided to announce that he's moving forward with plans to sell the Hilton Americas and boost downtown hotel development. Carolyn Feibel reports for the Chronicle:
The city of Houston has put its downtown convention center hotel, the Hilton Americas-Houston, up for sale, officials announced this morning.
"We do believe there can be significant interest in this property at a very good price," said Mayor Bill White.
An offering memorandum placing the hotel on the market was issued today by CBRE/Concordis Real Estate. Hilton is the operator of the hotel, located across the street from the George R. Brown Convention Center.
White told City Council he personally would be involved in sale negotiations and that he had a "reserve price" in mind that he would not share with anyone.
[snip]
The Hilton Americas has seen its average occupancy increase to more than 70 percent since opening in December 2003, city officials said.
KHOU-11's Lee McGuire offered a bit more detail:
Houston Mayor Bill White says it’s time to begin a new push to add more hotel rooms in downtown Houston, and he’d like to start by selling the building that houses the Hilton Americas to a private company.
[snip]
It has been 10 years since city leaders began to address the issue of a lack of hotel rooms downtown. In the late 1990s, White said, there were only 1,700 rooms to attract conventions to come to downtown Houston. Today, there are five thousand.
White says that is still not enough. “We lag far behind other big convention cities,” he said. “Next month, I will come to council with something to provide additional incentive for new hotel rooms in the downtown area.”
[snip]
The city, through a hotel corporation set up to build the property, still owes about $270 million on the project in secured debt. White says he believes the city could sell it at a profit, and then re-invest what he calls “significant” additional money into existing pension obligations and other new hotel projects downtown.
The most recent figures available show the Hilton Americas operates at about 64 percent capacity, on average. Just after it first opened in 2004, it was at fifty percent capacity.
So, which occupancy figure is correct -- the one cited by the Chronicle or the one cited by KHOU?
In any case, Houston lags behind other big convention cities for various reasons (climate, lack of tourist attractions, and other perceptions about the city) that do not include a lack of hotel rooms downtown. It's hard to see how a massive injection of taxpayer (your) money will change that dynamic significantly (although we imagine that developers and associates will cheer the proposal).
Our preference would be to see the Hilton Americas sold for a profit, that profit to be used to shore up the ongoing, massive unfunded liability in the pension plan (which Mayor White apparently plans to pass on to the next guy, much as he was left the problem by Lee Brown), and the city to get out of the business of downtown development/speculation, which is not a core function of municipal government and not something that should be distracting us given our current difficulties with core functions of government (like police and public works, or as we learned yesterday, well-functioning courts).
Posted by Kevin Whited @ 09/10/08 11:13 PM | Print |
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