Yet another step forward for the Astrodome Hotel plan.
Commissioners Court unanimously gave the go-ahead to a private firm’s plan to spend $450 million reinventing the mostly dormant, county-owned Astrodome into a convention hotel.
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With its vote, the court gave the the Harris County Sports & Convention Corp., permission to sign a letter of intent with Astrodome Redevelopment Corp.
No public money will be put into the project.
The letter of intent states that by March 2007, Astrodome Redevelopment must obtain financing and the approval from Reliant Park’s tenants, the Houston Texans and the Houston Livestock Show and Rodeo. Hotel construction would begin at the earliest late next year.
The county would lease the Dome to Astrodome Redevelopment for 50 years and give it an option to extend the lease another 20 years.
Astrodome Redevelopment would pay the county $2.5 million in rent annually and 2 percent-3 percent of gross revenues.
The letter of intent prohibits Astrodome Redevelopment from operating a casino or sexually oriented businesses.
[Harris County Judge Robert] Eckels said the project is a good one for the county. Private entrepreneurs, he said, will assume all the risk but may succeed in giving new life to the much beloved, aging Dome. If the plan works, Houston will begin attracting more conventions and more money will be pumped into the local economy, he said.
More on this project is here and here. The next step, in which the Dome Redevelopment folks have to convince companies with money to part with large sums of it to serve as their capital to do the construction, will be the crucial one. Tory did some back-of-the-envelope math on this back in July, and he’s skeptical about the Dome Hotel’s ability to generate enough revenue to cover its nut. We’ll see if the professional moneylenders feel the same way. Meanwhile, the question to ponder is what happens if financing falls through? I get the feeling that the Dome is running out of options, and may well face the prospect of demolition again. At least if that happens, folks like Judge Eckels who fear being tagged as “the guy who let the Dome get torn down” can say they tried their best but even a private investor couldn’t make it work. We shall see.
This appears to be a public attempt to demonstrate a reasonable effort, and a last-ditch effort at that. If it was indeed a viable business plan without taxpayer guarantees then it would have been gutted and reformulated long ago.
Now the expectations of the Gulf Coast community is to use the Astrodome as a hurricane shelter.
Eckels will hope to trade in his hurricane charity for public authorization to flatten the Astrodome.
This strategy is a good way to keep the Harris County Sports Corporation in new stadiums and convention centers forever.