City-Owned Convention Center Hotel’s Dirty Little Secret

Supporters of the city spending $550 million for a 1,000-room dormitory attached to the convention center say that the money will all come from bonds (yeah, in this market, good luck with that) and that there’s no way it will affect city services which are already underfunded. This, they and their cheerleaders say, makes the anti-hotel folks’ slogan “Safer Streets, Not Hotel Suites” dishonest.

And then, whoops. Right here on the city’s own hotel FAQ page, there’s this thing. Scroll down to question #14.

The City’s financial advisors have advised staff that, in addition to the listed sources of repayment, and after they have been fully used, the bond market may require a contingent credit support from the City. This is likely to take the form of an agreement by the City that, if the other sources of debt service are not sufficient, the City will make the necessary payment, subject to appropriation at the time by the then-sitting City Council.

In English? If they burn through the $50 million rainy day fund — likely; the San Antonio city owned hotel burned through something like $20 million a year when it started up, if I recall correctly — then the bond market will require “contingent credit support” from the city.

Simple terms? The city will have to pay out of its general funds. That’s money that would be going to police services, street services, and what have you.

Comments

  1. Jim says:

    You are short and a potterphile.
    I have added you to my blogroll.

  2. Mr. H — Drop me an email. I seem to have lost your address.