New Mega Hotel Planned, City Waiving $3.8M In Fees

New Mega Hotel Planned, City Waiving $3.8M In Fees

News broke Friday that the shelved White Lodging Services Corp. plans for a 1,000-plus hotel at 2nd Street and Congress Avenue are back on the stove.

The news seems to echo what Assistant City Manager Robert Goode told council at a recent hearing: “We are a big city, get over it.”

The story broke in the Austin American-Statesman, but the tip might have come from the public record, as Mayor Lee Leffingwell has added an item to this Thursday’s council agenda to waive $3.8 million in fees and also help pay for a $500,000 water line for the hotel. (Editor’s note: link corrected.)

The Statesman reported that construction will start in nine months.

Despite the drama playing out recently with Formula One tax spending and the council runoff elections, I think this multi-million dollar waiver will get unanimous support from council. There had been some debate about  waiving the city’s right to an alley at the future hotel site, but I recall the topic being buried.

News that this deal — long-planned but put on ice when the economy tanked — is back on means a number of things.

1) More traffic downtown. That is an important note because it’s already hairy. This will add more pedestrians, more cabs, more pedicabs. More everything. City staff claims we will have 10,000 to 15,000 more employees downtown in the coming years.

2) It begins to create a commerce corridor along 2nd Street, from the Convention Center to City Hall, which will bolster the pedestrian vibe, economy and energy of downtown Austin.

3) This is a positive economic indicator for Austin. White Lodging recently put up a  34-story, 1,005 room JW Marriott in downtown Indianapolis. A lot of people said that was the money they planned to spend in Austin. The fact that White Lodging is planning to spend more dough, or incur more debt, for the Austin project is a sure vote of confidence.

4) Tourism and convention advocates tell city council we need more hotel space to compete on for more convention center business. If that is the case, and we do get some more big events, it means Austinites should get ready to share their city with America more often. (Which could mean skipping town for the weekend.)

5) More than likely, someone in Austin, probably a longtime landowner who bought nearby dirt for a nickel, is getting rich or richer.

This city, and the amount of exciting, good news in it, never ceases to amaze me. Other cities across the country would kill for a project like this in their downtown. In Austin, I feel like we’ve become desensitized to such good news.

I’m telling you: this is the kind of project that people in the Midwest stake a career on.

congress ave hotel
[image from SkyscraperPage]


  1. Lets hope it goes through. My worry is that Morrison is pushing to postpone discussion until after Tovo is seated which doesn’t bode well.

  2. Parking! Parking! Parking! Not to mention traffic congestion. Wish the city would deal w/ the parking issue. We may be a “big city, but we’re a small town when it comes to parking.

    • Uh, I get the sense you don’t understand what “big city” really means. It doesn’t mean building more parking; it means growing up and understanding that parking is going to get a lot more expensive because there’s a lot more demand to be downtown. (and building more free parking to accomodate it is exactly the opposite of “big city”; it results in making the area less attractive to go to).

  3. Lance Hunter says

    That is some great news. I can’t help but wonder how much influence Formula 1 had in getting this project landed. We’ll definitely need the hotel space when the races start running.

    Also, I love the quote from Robert Goode. Perhaps we just take everyone who is complaining about how Austin is losing its small town charm and offer them them the option of moving to either West Lake (or if that’s too big for them, they can move to Manchaca).

  4. The link to siretechnologies isn’t working for me.

    What are the $4m in fees that the city is waiving? If every new development project is going to have fees waived, why do they exist in the first place?

    • Dan,

      Thanks for the heads up. Please see corrected link.

      According to the docs, the majority of money is public right of way fees the builders would have paid to block roads and sidewalks.

      Some could say that the extra hotel tax along with increases in sales tax and wages/jobs will out weigh the revenue lost to the city from fees and permits.

      Sales tax goes to the general fund, just as the fees do. The general fund pays for basic city services, like police, fire and parks. Hotel tax (paid by room per night) is delivered to the ACVB, ConvCenter and Cultural Arts Fund, under the economic development office, or EGRSO.

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