We’re not sold on Denton’s convention center project, although City Council members seem determined to make it happen.
In spite of swelling construction cost estimates and shrinking square footage, city leaders appear to be convinced that this project is a worthwhile investment and a good deal for taxpayers.
We believe they’re wrong.
Supporters argue that Denton needs a convention center to draw large meeting groups and further boost tourism, and city staff members have been working with O’Reilly Hospitality Management and its investors and the University of North Texas to build a full-service hotel and convention center on UNT land next to Apogee Stadium.
But anyone who remembers the early days of this discussion wouldn’t recognize the project today.
The building has lost two floors and about 29 percent of its overall square footage.
Council members said at a recent meeting that they are comfortable, for now, that the latest building size could accommodate a convention for 650 and a banquet for 1,800. The Denton Convention and Visitors Bureau staff said at that size, the center would still be large enough to attract many worthwhile events.
That may be true, but if we can’t afford a facility that measures up to expectations by attracting the type and size of events and groups that we want, does it make any economic sense to insist on moving forward?
We realize the term “full-service” may be flexible, but sooner or later, diminishing size has to result in diminishing returns on investment and future profitability.
If we are already downsizing so much, then why were we planning on such a large facility in the first place?
City staff and the project architects, who work for O’Reilly Hospitality Management and its investment partners, have been trying to rework plans so that the building, its furnishings and its financing stay at $25 million.
That may not be possible. Construction bids came in much higher than expected this summer, and a recent estimate showed that the total cost of a smaller convention center was hovering at $27 million, with the architect still waiting on final numbers.
The city plans to issue certificates of obligation to pay for the convention center’s construction. For years, staff members negotiating the deal have worked to make the convention center self-funded. The city would use its property, sales and hotel occupancy taxes to make an anticipated $2 million debt payment each year. Any shortage between the taxes and the payment would be covered by O’Reilly as a “rent” payment.
However, O’Reilly has asked that it not be obliged to cover that gap until the third year of operations. In our view, that’s another danger sign.
The convention center would be located on 13 acres adjacent to Apogee Stadium on the University of North Texas property where the former Radisson Hotel was located.
You may recall that facility, which failed to find success. Officials tell us that the old Radisson was too limited in size to handle conventions, and that gives us pause — if we insist on building a scaled-down convention center there, will we see history repeat itself?
At a recent meeting, Denton Mayor Chris Watts left room for council members to pull the plug on the convention center project, but they opted to keep it on life support for a while longer.
Their insistence came despite warnings from both council member Greg Johnson and the mayor that the council should begin to consider the possibility that the city may be going it alone. Neither the county nor the school district has given any public indication that they would contribute to the convention center.
City staff is expected to go before the school district on Sept. 23 to ask for a final, formal decision. A similar request of the county has not yet been scheduled.
In our view, it’s time for city leaders to pull the plug on the current convention center project. Too much time and money have already been wasted on a bad idea.
We believe it’s time to go back to the drawing board and wait for a better plan, one that could give Denton the type of facility that would meet our needs and be a solid investment for taxpayers.
If and when we build a convention center, it should be a point of pride for the community, a catalyst for the local economy and not put taxpayers at risk for long-term debt.
We believe this plan fails on all counts.
