San Angelo council approves resolution to seek voter OK for venue tax to fund McNeese Convention Center expansion

The San Angelo City Council voted 7-0 to advance a plan to ask voters to approve a 2% venue tax increase on hotel occupancy to finance a proposed expansion of the McNeese Convention Center.

The measure, advanced by a council resolution the body approved unanimously, would add 2 percentage points to the existing hotel-occupancy tax and designate the McNeese project as the specific venue project that tax would fund. Tina Dierski, director of finance, told the council the next steps are to submit the signed resolution to the city's bond attorneys, who will forward it to the state comptroller for review; if the comptroller approves, the city would likely call an election in November. Dierski said the venue tax would not affect property tax as long as the venue-tax receipts and other financing sources cover the debt service on the project.

The expansion concept presented to the council would add roughly 47,300 square feet to the existing 35,765-square-foot facility, producing about 83,000 square feet in total and including a 20,000-square-foot exhibit hall. Al Torres, construction manager for the City of San Angelo, described the exhibit hall as a standard size used in comparable cities: "So what I'm showing here is a 20,000 square foot exhibit hall, which is this area here. 20,000 square feet is the size of the exhibit hall in Abilene and a couple of other places that's pretty standard, so that's what I went with." The preliminary design would also add seven meeting rooms for a total of 15 breakout rooms and new back-of-house spaces.

Local tourism and convention staff and contractors told the council the city has lost events because of limited space. Jeremy Bartz said the city has turned away some opportunities: "We lost 1 last year. We lost 2, just due to the lack of space, lack of breakout space." Sydney Walker, speaking for the convention center, said: "One of the things that does hold us back is not having the proper space that's needed to be able to bring in these conventions." Both speakers urged moving the proposal to voters so the community could decide.

Dierski gave the council a financial snapshot: if the 2% increase had been in place last year, it would have yielded about $850,000; that revenue, when combined with debt leverage, could support a project in the $15 million to $25 million range. She said estimated annual debt-service payments for that range would be roughly $1.1 million to $2 million, depending on timing and interest rates. The council was also told the city would have up to one year after a successful venue-tax election to issue bonds tied to the project.

Council members asked about scope, timeline and other dedicated revenue options such as car-rental or parking taxes. Dierski and staff said they would research combining other tax sources but emphasized the resolution being advanced designates the hotel-occupancy venue tax specifically and that the project description must be detailed for bond counsel's purposes (attorneys have advised including sufficiently specific project language, even an address). Council members also urged a fiscally conservative planning approach: several said final scope and firm cost estimates must be obtained from architects and engineers before the city commits to bond issuance.

Votes at a glance

- Resolution to designate a venue project for the McNeese Convention Center and identify project financing (advance venue-tax process): passed 7-0. Motion by Lucy; second by Harry. Key details: would add 2% to hotel-occupancy tax; estimated prior-year yield ~$850,000; intended to leverage $15M

-$25M in project financing; estimated debt service $1.1M

-$2M.

- Contract 203-19: purchase and installation of 14 HVAC units at McNeese Convention Center with Advance Service Group, $524,573 (funded from hot fund balance): passed 7-0. Moved by Harry; second by Tommy. Staff said units were last installed in 2008 and no closure of the facility would be required for installation.

- Riverwalk wayfinding signage theme/style and direction to fund design via hotel-occupancy tax (24 signs, option to extend to Texas Bank Sports Complex for +3 signs; estimated cost $211,000 to $236,000): passed 7-0. Motion seconded by Karen. Staff said implementation is not yet budgeted and a budget amendment would return to council.

- Annexation ordinance (first reading) of approximately 1,205.573 acres south of U.S. 67 and east of U.S. 277 (city-owned property): passed 7-0 on first reading. Motion moved by Harry; seconded by multiple council members. Staff said the land is largely undeveloped and city ownership would allow future development initiatives; utilities and public-safety service needs would be addressed as development occurs.

- Z24-17: rezoning request at 2401 N. Chadbourne from general heavy commercial to general commercial (first reading): passed 7-0. Moved by Lucy Gonzales; seconded by Tommy. Staff said rezoning was required to qualify for tiers funding and would allow two general-commercial tenant spaces.

- Authorization for the city manager to negotiate and execute an engagement agreement with Denton Navarro for legal services in the Joshua Loudermilk litigation: passed 6-0. Motion by Tom Thompson; second by Karen. (No public comment was taken on the closed-session action.)

- Various board and commission nominations: passed 6-0. Motion by Larry; second by Lucy.

What happens next

Council approved moving the venue-tax resolution forward; staff will deliver the signed resolution to bond counsel to begin state review. If the comptroller approves, the city could call a voter election, likely in November, at which point the electorate would approve or reject the specific venue tax and project. Council and staff emphasized that project scope and final costs will be refined through architect/engineer selection and that financing details will be firmed up before bonds are issued.

Sources and attributions

Quotes and attributions come from council members and staff during the City of San Angelo council meeting. Speakers quoted in the text are listed below with roles as identified in the meeting record.