Austin Convention Center Redevelopment to Proceed Without Hotel or Housing Elements

Austin Convention Center Project Moves Forward Without Hotel or Housing

This week, the leaders of the Austin Convention Center made a significant announcement regarding the upcoming redevelopment of the center, revealing that there will be no new hotel or market-rate housing included in the plans for the ambitious $1 billion-plus project.

Elimination of Hotel and Housing Plans

The decision stemmed from a memo released last week, which highlighted the challenges related to public-private partnerships (P3) and the timeline for the project. Construction is set to begin in April 2025, and the goal is to complete the center in time for the highly anticipated South by Southwest (SXSW) festival in 2029.

The memo pointed out two main factors that led to the elimination of the accessory components. One issue was related to the timing of securing an ancillary development, which was not feasible to complete before the convention center’s planned reopening. Additionally, there were legal and financial complications linked to the outstanding bonds from the Hilton Austin Downtown, which prevents the city from building a new hotel in the central business district until those bonds are paid off, expected by 2034.

Outside Consultant’s Findings

An outside consultant, Hayat Brown, noted that the city’s recent surge in housing supply and a consequent drop in rental prices made it challenging for developers to find the investment needed for any new housing on the convention center site.

As stated in the memo: “There was no clear path forward for a resolution to the bond provision, and the estimated costs for the below-grade superstructure… exceeded the ability of the Project budget to absorb without a developer onboard.” The challenges presented contributed to the decision to not pursue a P3 arrangement, a move that was communicated to the City Council back in August 2024.

Hotel Boom in Downtown Austin

Interestingly, the downtown area is currently experiencing a hotel boom, with 37 hotels constructed since 2015 and many more in development. This suggests that the tourist sector in Austin may thrive without needing additional hotel space directly associated with the convention center.

To accommodate a P3 component would have required an additional eight to ten months to the project schedule and raised costs by at least $16 million for design and management. Moreover, expected bids for essential materials would range from $85 million to $105 million, further complicating the budget.

Urgency of the 2029 Deadline

With firm bookings for 2029 already in place, any delay could jeopardize business opportunities. During a recent panel discussion held by the Urban Land Institute Austin, Convention Center Director Trisha Tatro emphasized the importance of adhering to the timeline. “What has been driving this most importantly is the schedule, being able to complete this project and get it open on time,” she explained.

Leaders in the project stressed that the large footprint of the convention center had limited pedestrian access in the area. By relocating major exhibit and loading areas underground, they hope to open up the space for more accessible buildings above ground.

Current Status of the Project

The project is currently in the schematic design stage, where planners are finalizing the overall concept, including the layout and structure of the redesigned convention center. This phase is expected to wrap up by January, at which point the team will move into the design development phase, focusing on detailed architectural elements.

As the project progresses, officials remain committed to ensuring the new convention center meets the needs of the community, the tourism sector, and the fast-growing downtown area. They believe this initiative will enhance Austin’s appeal as a destination for conventions and events, fostering a positive economic impact for years to come.