Tyler Council takes next step toward convention center and arena

Wednesday, June 13, 2012 - 11:17am

The Tyler City Council received two presentations today that could ultimately lead to a new hotel conference center in Tyler as well as an arena.

“The genesis for both of these projects was Tyler 21 and the Industry Growth Initiative (IGI),” said Mayor Barbara Bass. “Tyler 21 created a vision for the sense of place we want for our community and the IGI established a plan for achieving a quality of life that will attract new residents and businesses. Both Tyler 21 and the IGI point to the need for a community performance arena as well as a full-service hotel conference center. ”

The City took the initial step toward exploring the possibility of both of these projects in 2011 when Senator Kevin Eltife and Representative Chuck Hopson sponsored and carried bills to amend the Texas Tax Code to allow for an additional two percent hotel occupancy tax to be collected within Tyler city limits. An enabling Ordinance was then passed by the City Council for this additional two percent to be used for the construction, expansion, maintenance or operation of convention center facilities, which may include a conference/convention center, multi-purpose facility, arena or related facility. Approximately $600,000 annually is generated by this additional two percent.

Then on Nov. 9, 2011, the Tyler City Council voted unanimously to hire a consulting team to evaluate the feasibility of these two distinctly different facilities. Garfield Traub Developments, LLC (and PKF Consulting USA as its subcontractor) was hired to conduct a market and feasibility study for the two projects: a conference center and an arena.

Hotel and Conference Center

The consultants found that Tyler is uniquely positioned to attract private investors for the construction and management of a full-service hotel conference center. Further, they went on to prioritize potential sites for the facility and suggest a prospective financing plan for the $57 to $75 million project, pending further study.

“The hotel conference center would be a public-private partnership with 63 percent of the funding coming from private investment,” said Bass. “Only a small portion of this project would be public funds – and those would come from hotel tax revenue.”

The proposed conference center hotel is anticipated to generate $600,000 per year in new hotel occupancy tax income for the City, in addition to new sales tax revenue, property taxes and operating income. The hotel could provide 250 rooms and the conference center could offer 27,000 square feet of meeting space.

“Most conferences would need significantly more hotel rooms than the 250 incorporated into the project,” added Bass. “The overflow would utilize room inventory in the community, thus benefiting our existing hotels.”

Tourism was identified as one of Tyler’s chief opportunities for economic growth in the Industry Growth Initiative that was adopted in mid-2010. It is estimated that nearly 20,000 visits are lost each year because Tyler has not had the facilities to accommodate large conferences.

“Tourism brings fresh dollars to our economy,” explained Bass. “This is money from outside our region being spent in Tyler. The result is jobs for Tylerites and economic vitality.”

Event Center/Arena

The consultants also found that Tyler could benefit from an arena to host concerts, sporting events and other large-scale events. The arena could seat from 5,500 to 8,000 attendees with a total of 159,500 square feet at an estimated cost of $44 million to $66 million. This would be the only facility of its size between Shreveport and Dallas. A more refined estimate of cost is pending further study.

“This is certainly a project that would enhance the quality of life for the citizens of Tyler,” said Mayor Bass. “However, because the City would need to have a much greater investment in the project, we will not build the arena without going to the voters for their approval.”

It is anticipated that 40 percent of the cost of the facility would come from private donations and 60 percent from public funds.

“Until the private donations are raised, we would not consider approaching voters to approve the public investment,” added Bass. “I really don’t see that happening before November 2013, if not later.”

Next Steps

On June 27, The City Council will consider a contract with the consultants to take the next step for the two projects, including seeking securing potential locations, seeking partners and conducting preliminary designs for the projects.


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