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Harlingen approves convention center operating budget; developers report stronger-than-expected early revenues and hotel construction progress
Summary
The Harlingen City Commission approved the Huntington Convention Center operating budget for fiscal 2020. Operators reported stronger early revenues than projected, and the adjacent hotel remains under construction with an opening targeted for late July 2020.
The Harlingen City Commission approved the operating budget for the Huntington Convention Center for the fiscal year covering October 2019 through September 2020.
BC Lynn Hospitality representatives presented the budget and a construction update on the hotel being built next to the convention center. Brandon Rainey, CEO of BC Lynn Hospitality, and Jeff Hamill, general manager of the Harlingen Convention Center, told commissioners the hotel is in its fourth month of construction and crews expected to place the third-floor deck the following week; they said the hotel remained on schedule for a late July 2020 opening despite a three-week rain delay in June.
Operators also reported higher-than-expected revenue during the convention center's initial months of operation. Rainey said July 2019 generated about $82,000 in top-line revenue against a budgeted $21,000; August produced nearly $99,000 against a budget of about $33,000. For the proposed fiscal year 2020 budget, staff and the center reported total revenue of $955,108; cost of sales of $219,506; top-line revenue after cost of sales of $735,602; payroll expenses of $483,634; operating expenses of $425,704; and a projected net operating loss of $202,389.
City staff said the projected shortfall was expected and covered by working capital funds already budgeted for start-up losses. The city also contracted HBS Convention, Sports and Entertainment Facilities Consulting to review the budget; the consultant found the projections within industry variances, staff reported. Commissioners approved the budget as proposed.
Commissioners praised the convention center staff for early sales and repeat bookings and encouraged continued marketing and community outreach. The budget approval authorizes staff to operate the center under the presented financial plan and to use the city's working-capital allocation to cover start-up losses.
Future reporting on actual monthly results was not specified at the meeting; operators indicated they would continue sales and marketing efforts to grow revenue and attract larger overnight events once the hotel opens.
