After dispute, Austin council agrees to shift hotel tax money to parks

Austin leaders will reduce the percentage of hotel taxes that goes to the convention center to put some into park preservation, the City Council agreed Thursday night, after a protracted dispute that pitted Mayor Steve Adler against Council Members Ellen Troxclair, Kathie Tovo, Leslie Pool and Ann Kitchen.

The move will decrease the slice of hotel taxes going to the Austin Convention Center and marketing arm Visit Austin from 85 percent to 70 percent, freeing up $11.9 million next year for historic preservation of amenities at parks such as Barton Springs and Zilker Park.

But the growth in new hotels generating more hotel tax revenue will help cushion the blow to the convention center and Visit Austin, which together got $59.8 million this year and would get an estimated $55.3 million next year.

While the funding shift isn’t enormous, its implications pointed to larger questions: whether the convention center should be Austin’s primary tourist-drawing priority and whether it should be expanded.

Adler pushed back against shifting the tax funding, fearing it would torpedo a “downtown puzzle” idea he pitched over the summer to increase hotel taxes, expand the convention center and create a tourism public improvement district. His plan would commit $559 million of an estimated $609 million in hotel taxes over four years to expanding and promoting the convention center and put perhaps $4 million to $8 million per year toward homelessness initiatives.

RELATED: Tug of war intensifies over hotel taxes going to convention center

When the other council members last week pitched the 15 percent funding shift toward historic parks, Adler immediately responded by proposing an amendment that would merely have staffers study options, but not yet approve anything. He also added an agenda item telling the staff to start working on the downtown puzzle.

But as the hours of tug-of-war wore on Thursday evening, and dozens of speakers weighed in, it became obvious that the mayor lacked support. Ultimately, Adler agreed to withdraw his amendment and backed the funding shift toward parks.

In exchange, Troxclair agreed to ask the city’s staff to bring back an analysis of the shift before the 2018 budget is approved in a few weeks — giving the council a chance to change its mind.

Adler’s proposal to move his downtown puzzle plan forward, meanwhile, was postponed Thursday after council members said they still had questions about the complicated financing involved.

Proponents of putting 15 percent of hotel tax toward parks and preservation said that it didn’t prevent a convention center expansion, and they didn’t appreciate the two things being conflated.

“I’m amazed that we’re in a position today where we’re pitting creating a bucket for historic preservation against expanding the convention center and funding (help for) homelessness,” Kitchen said. “That’s just not true.”

MORE: Adler: Hotel tax plan would help homeless and Austin Convention Center

Adler, however, argued that the council shouldn’t shift money away from the convention center without knowing how it would affect operations there and how it would affect the potential expansion tied to his plan to create a public improvement district.

“My problem with (the item) is that it could prejudice the ability to get that income stream for homelessness,” he said.

Proponents of the change argued that putting hotel tax money toward parks could help free up general fund money for other things.

Scott Joslove, president of the Texas Hotel and Lodging Association, asked the council members to consider phasing in the funding shift to parks and preservation.

“It’s difficult to imagine $11 million coming out of either the (visitor’s bureau) or the convention center and it not affecting staff or potential services,” he said.

Members of the public who turned out to support shifting the money to preservation framed it as an issue of citywide interests versus downtown priorities. Hotel taxes can only fund things that promote tourism, but many people argued that other Austin features do that more than the convention center. About 2 percent of city visitors come for conventions, according to one 2013 estimate.

RELATED: Dispute simmers over merits of Austin Convention Center expansion

John Kunz, owner of Waterloo Records, said he read a couple of travel guides to Austin to figure out why visitors come here and found only two short mentions of the convention center.

“One said, ‘It’s big,’” he said. “The other one said ‘roller derby’s there.’”

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