Fort Worth鈥檚 convention center expansion has had its share of setbacks.
City leaders began discussing the project over a decade ago. Under the original plans, phase one of the expanded Fort Worth Convention Center should be nearing completion this year. But then COVID-19 came and Fort Worth鈥檚 culture and tourism fund 鈥� the source of the project鈥檚 funding 鈥� took a big hit. Tourism revenue decreased by about $11 million between 2019 and 2020.
About $52 million in federal funds restarted the project. The money comes from the , a $1.9 trillion law designed to help the country recover from the pandemic. The infusion of federal funds will pay for over half of the first part of construction.
Mike Crum, director of Fort Worth鈥檚 public events department, started working for Fort Worth Feb. 3, 2020 鈥� about a month before the pandemic began to emerge in the U.S.. His first meeting was with the advisory committee for the convention center expansion.
鈥淲e had one meeting,鈥� Crum said. 鈥淭hen we had to shelve the whole thing.鈥�
The delay and other factors, such as the planned realignment of Commerce Street and inflation, ballooned the estimated cost of the project by $324 million, almost double the estimate in 2019.
The Fort Worth Convention Center currently struggles to compete with other cities for regional and national conferences. The city in phase two will demolish the arena attached to the convention center and expand exhibit halls, ballrooms and meeting spaces to make the city more competitive.
With federal dollars immediately available to the project, the city is preparing to finalize its plan to finance the rest of the project through debt.
鈥淲e would sell $43 million in debt this May to flesh out the budget and that鈥檒l permit us to move forward,鈥� Crum said.
The role of hotel occupancy taxes
Cities often use debt to fund major construction projects through bond elections 鈥� voters a $560 million bond in May 2022. And the city paid for its portion of cost through 鈥� a type of debt voters approved in Nov. 2014.
However, in both of those cases voters had the opportunity to vote on whether to approve the debt. That鈥檚 not the case for the convention center, at least in the first part of the project.
Hotel occupancy tax is the biggest contributor to the culture and tourism fund along with revenue collected from Dallas-Fort Worth Airport, hotel taxes paid around the Cultural District and Stockyards and, finally, venue taxes 鈥� such as for tickets and parking 鈥� which is the same revenue by voters in 2014 to fund construction of Dickies Arena.
All of those taxes don鈥檛 need voter approval unless they have to be increased, Crum said. That could be the case for the second part of the project, which the city expects will cost $606 million.
鈥淲e鈥檝e not made any decisions or any recommendations, but, you know, we could bump the (hotel) occupancy tax another two percentage points,鈥� Crum said.
City leaders will discuss any tax increases to pay for phase two of the project in October. Project leaders are continuously working on cost estimates for the second part of the project of the project, to Fort Worth鈥檚 City Council in January.
Hotel occupancy tax is the tax visitors to the city pay when they book hotel rooms. That tax is the primary source of revenue to the cultural and tourism fund, which finances and partially finances Dickies Arena and , Jameson said.
The city also could sell the naming rights to the convention center, an emerging trend 鈥� such as Dickies Arena and the American Airlines Center in Dallas 鈥� that has become more lucrative in the past decade, Crum said.
City staff will give a presentation about the $43 million in debt it plans to take on this month, and is set to officially sell the debt in May.
The city also has revenue estimates for the culture and tourism funds for the next three years 鈥� funds the city will use to chip away at the debt it plans to take on for the project. The city expects to earn about $272.2 million by 2026, with revenue estimates increasing at a pace of about $3 million per year.
About $3.9 million of these funds will be used to pay down the debt for the first phase of the convention center every year for 30 years.
Dallas is also giving its convention center a makeover
Fort Worth isn鈥檛 the only convention center being redesigned that is coping with rising construction costs. Dallas recently a master plan for its new with a new estimated price tag of $3 billion.
Voters in Dallas a 2% increase in the city鈥檚 hotel occupancy tax in November to fund the convention center project and renovations in Fair Park.
While Fort Worth鈥檚 expansion won鈥檛 match the total rebuild Dallas is planning, it will allow the city to be more competitive in the race to attract regional meetings and compete for conventions on the national level, Crum said.
Texas A&M University鈥檚 downtown expansion presents opportunity for redesign
Despite Fort Worth鈥檚 pandemic set backs thus far, in 2021 the project received a dose of synergy from .
The project鈥檚 advisory committee made adjustments to the project鈥檚 plan based on Texas A&M鈥檚 planned development. The city will rebuild the southeast entrance to the Fort Worth Convention Center, adding about $10 million to the phase 1 budget, in response to Texas A&M鈥檚 investment in downtown, Crum said.
鈥淔rom the beginning, city and county officials have talked to us about the two projects complementing one another. We see it that way, too,鈥� Laylan Copelin, a spokesperson for Texas A&M University, said in a statement.
The downtown campus will face the convention center, the water gardens and a new convention center hotel. Urban designers are already at work planning the design of shared spaces such as roads, sidewalks and public spaces.
鈥淎ll of these pieces need to be thought of together and that is very top of mind in every conversation I鈥檝e been a part of,鈥� Andy Taft, , said.
Texas A&M also will invite large groups to Fort Worth for academic meetings, Taft said. That will create more room nights in the hotels surrounding the campus and convention center.
鈥淭here鈥檚 no question, those are two great synergies,鈥� Taft said.
The convention center will have an economic impact on Fort Worth beyond the hotel rooms it will help fill, Jameson said. Tourism activity is expected to double as a result of the convention center鈥檚 expansion.
Visitors to the city spend more on food and beverage than they do on hotel rooms, all of that sales tax revenue flows into the city鈥檚 general fund to offset the costs of city services for residents, Jameson said.
鈥淚t鈥檚 a powerful segment of the Fort Worth economy and there鈥檚 an opportunity for it to grow and contribute more,鈥� Jameson said.
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Rachel Behrndt is a government accountability reporter for the Fort Worth Report. Contact her at or via . At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy .