House Panel Underwhelmed by Metroplex Hotels Proposal

AUSTIN–A plan pushed by Dallas and Fort Worth officials to use

hotel-motel tax revenues to build convention center hotels got a

skeptical reception Wednesday from a state House panel.

“This, to me, appears to be corporate welfare,” state Rep.

Senfronia Thompson, D-Houston, told Dallas Mayor Laura Miller.

Miller and seven Dallas City Council members appeared before the

House Economic Development Committee on Wednesday morning to

promote House Bill 262.

The measure is sponsored by Miller’s husband, state Rep. Steve

Wolens, D-Dallas. It would permit Dallas and other Texas cities,

including Fort Worth, to use some hotel-motel tax revenues to build

convention center hotels. The tax revenue would normally go to the


Miller said the bill would allow Dallas to compete more

successfully for lucrative conventions being lost to Las Vegas and

other cities that have more hotels.

She said Dallas must offer subsidies to lure development


“Nationally, it has been shown that convention center hotels

that are attached to convention centers have to receive tax

subsidies, or else they don’t get built,” she said.

Fort Worth City Councilwoman Becky Haskin said that Houston

already qualifies for the option, and that allowing smaller cities

to take advantage of it would bring more conventions to Texas.

Fort Worth had planned to issue $160 million in debt through

certificates of obligation to build a 600-room hotel. That plan was

derailed when a taxpayers group forced the issue to a public vote

by presenting the City Council with a petition signed by more than

15,000 residents.

The council has postponed a vote while a committee determines

whether a publicly financed hotel is needed.

A study released by an Austin-based watchdog group concluded

that a tax-subsidized hotel in Dallas would not increase demand for

hotel rooms and would drain business from existing hotels.

“Though well-intentioned, these projects are not a good deal,”

said Peggy Venable, director of Texas Citizens for a Sound Economy,

which commissioned the study.

But Thomas Hazinski, managing director of HVS International, a

Chicago-based hotel industry consulting firm, said the study was

flawed. He said his firm’s analysis of the Dallas project found

that it would bring in 12 new events annually and pump $300 million

into the local economy.

“It really is the opposite of corporate welfare,” he said.