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Council authorizes $2.2M in hotel-tax funds and seeks $2.8M bonds for proposed Hilton acquisition
Summary
After an executive session, Nassau Bay council approved using $2.2 million in hotel occupancy tax funds to partner on a proposed purchase of the Hilton property and directed the finance director to pursue legal avenues for up to $2.8 million in additional hotel-tax backed bonds, subject to a negotiated agreement.
NASSAU BAY, Texas — Following a closed executive session on economic development and real-property negotiations, the Nassau Bay City Council on Feb. 10 approved two separate actions to support a proposed acquisition at the Hilton site.
First, council voted 7-0 to authorize $2,200,000 from the city's hotel occupancy tax (HOT) fund to be used in partnership with Ayrshire for the acquisition and ownership of the property currently occupied by the Hilton hotel. The motion was made and seconded in public session after the executive discussion.
Second, council then authorized the city's finance director to explore legally available mechanisms to issue HOT-backed bonds to provide up to an additional $2,800,000 for the same purpose. That authorization is explicitly conditioned on a mutually acceptable agreement to be negotiated with the city's partner; council members noted the funding approvals do not by themselves obligate the city to purchase the property.
Council and staff identified the hotel site as a strategic redevelopment opportunity; outside developers and representatives attended the meeting and introduced themselves to the council in public session before the executive session. Those attendees included developer representatives and local real-estate professionals who said they have been working with city staff on potential redevelopment plans.
Both funding authorizations passed unanimously. City officials said the amounts would come from the HOT fund and that any bond issuance would follow legal review and formal council approval in subsequent steps. The council's motions stressed that final spend would be contingent on acceptable negotiated transaction documents.
Next steps: staff will continue negotiations with the developer group and return to council with any proposed purchase agreement and the legal structure for any HOT bond issuance. No binding purchase agreement was approved at the Feb. 10 meeting.
