The city of Austin, Texas, is considering a plan to build a 1,000-room hotel and convention center next to the Circuit of Americas racetrack.
The deal involves Houston-based developer Rida Development Corp. transferring ownership of 21 acres to the city at no cost so the potential hotel and convention center could be eligible for tax rebates.
The deal is contingent on the transfer of real estate to the city with understanding between the parties the properties would transfer back to the developing entity — again at no cost — upon the conclusion of a rebate period. The deal is contingent upon approval of the state comptroller of the proposed arrangement, city officials said.
An affiliate of Rida Development Corp. plans to develop a roughly 460,000-square-foot convention center facility with an adjacent 1,000-room hotel and related facilities near the Formula 1 racetrack, which brings hundreds of thousands of fans to its grandstands for events.
In February, Austin's city council designated the project as qualifying for a portion of the city's hotel occupancy tax — a figure that sits at 11% and is meant to provide revenue to promote tourism in the Texas capital city. It was not immediately clear in city documents what the portion of the city's hotel occupancy tax might come to the developer. The city would need to agree to this arrangement at a meeting scheduled Thursday.
"In order for the project to meet such statutory requirements, the land beneath the hotel and the convention center facilities must be owned by the city," officials said in the memo.
The new convention center isn't expected to compete with the Austin Convention Center, staff with the city said in its memo to the city council with each facility expected to have its own distinct target markets. The Austin Convention Center closed its doors in April, following South by Southwest, as the city plans to build a new $1.6 billion facility that nearly doubles its capacity at the end of the four-year project, which is also being funded by hotel occupancy tax proceeds.
Rida's new convention center and hotel at the F1 racetrack is about 15 miles southeast of the city's existing convention center site.
Rida, which owns a 1,000-room hotel in downtown Houston where it has its corporate office, did not immediately respond to an emailed interview request from CoStar News on Monday.