Convention Center Redevelopment Would Relocate SXSW, Other Festivals for Three Years: Construction is set to begin after SX ’25, end before SX ’29 – News

Inside the convention center during SXSW this year (photos by Jana Birchum)

If you’re one of the thousands of people who have been walking around the Austin Convention Center over the past week for South by Southwest or are one of the thousands more who plan to attend the Festival next year – savor your time in our city’s humble, turn-of-the-millennium convention space. It’s about to get a big makeover.

After more than a decade of planning and study initiated by former Austin Mayor Steve Adler, the city is preparing to shut down the Neal Kocurek Memorial Austin Convention Center (that’s its full name) for a massive $1.6 billion redevelopment set to begin after SXSW 2025. The plan will of course bring big change to the convention center itself. The reimagined facility could double the 376,000 square feet of rentable space currently on offer. Current plans project 360,000 square feet of exhibit space, 184,000 square feet of ballroom or flexible exhibition space, and 180,000 square feet of meeting space, all of which is intended to attract more convention business.

This is a big selling point for Austin’s current mayor, Kirk Watson. “With an inadequate convention center, we lose out to competitors and, consequently, miss out on millions of dollars for our Austin community,” Watson said in a May news release following a City Council vote to seek architecture and construction contracts related to the project. “With a bigger convention center, the economic impact to our city is estimated to jump to over $750 million annually, from the current $468 million.” In October, the city awarded contracts to two firms tasked with designing and building the new convention center, for a cost of $1.27 billion.

But another part of the convention center redevelopment pitch has centered around how the facility can also help people who actually live in Austin – which has been a point of criticism by some locals. The argument against building new, expensive convention centers is that they suck up a lot of tax money that could be directed elsewhere, and they are not beneficial to people who actually reside in the city because they are mostly used by visitors. The Hotel Occupancy Tax (HOT) revenues that will fund the project in Austin can only be used for certain purposes, such as those that promote tourism and cultural preservation.

Mayor Kirk Watson

From the beginning, Austin leaders have pitched convention center redevelopment as a long-overdue project (the facility was originally constructed in 1992 and expanded a decade later) that will benefit visitors and residents alike by completely transforming the southeast part of Downtown where the facility sits. The idea is to reenvision the convention center, which currently acts as a kind of barrier between the eastern and western parts of Downtown, as a conduit connecting the two geographic regions. Adler often referred to this project as a critical component of Austin’s “Downtown Puzzle.”

To achieve that goal, the redesigned convention center will move some venue space and build higher to allow for a smaller building footprint. The city is also seeking to bring massive redevelopment to the blocks immediately surrounding the convention center. A market feasibility study Austin Convention Center Department staff presented to City Council in February found that, over a 40-year period, hotel and mixed-use multifamily development in the area could generate an additional $112 million in property tax revenues, $13 million in sales tax, and $315 million in hotel taxes ($95 million of which would be devoted to cultural preservation). Later this month or in early April, the city will begin soliciting contracts for these projects.

The new facility will also integrate with other Downtown planning initiatives, including redevelopment of the neighboring Palm District (home of the historic Palm School, one of Austin’s oldest schools that was likely the first school in Austin to serve Mexican American students), the recently reimagined Waterloo Greenway, and Austin’s once-in-a-generation mass transit expansion, Project Connect.

Convention Center Department staff hope to minimize the impact the three-year construction project will have on convention and related tourism business. The convention center “will continue to operate during the construction period,” a department spokesperson told us, as staff works “with the area hotels, Visit Austin, and the Palmer Events Center to accommodate as much of the event business as possible that is currently on the books and any potential new business.”

Staff also estimates that the redevelopment, which is to be funded through Hotel Occupancy Tax revenues (which Council increased in a contentious 2019 decision) and the issuance of bonds based on those revenues, will not reduce HOT revenue in the interim. “Overall, we are projecting an increase in HOT over the construction period, just a smaller percentage increase than has been experienced in the past,” the ACCD spokesperson told us.

Whether you intend to come back to Austin for SXSW 2025 or not, take an extra moment to appreciate your time in the city’s modest convention center. The next time you come back, it – and the blocks surrounding it – might be unrecognizable.

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