Fort Worth spells out financial details of Will Rogers arena plan
After voters approved taxes to help pay for the $450 million multipurpose arena and sports facility at the Will Rogers Complex, the City Council on Tuesday put its stamp on a resolution that spells out how the city will meet its financial commitment.
The city is paying for half the cost of the arena, planned for the corner of Harley Avenue and Gendy Street in the Cultural District. The remainder will come from private sources through Events Facilities Fort Worth, the nonprofit group that will lease and operate the 14,000-seat arena. The arena will be used for the Stock Show and will also host concerts, sporting events and family shows.
The city, too, is planning another expansion of the Fort Worth Convention Center downtown, possibly tearing down the aged, domed arena on the north end of the facility, replacing it, and adding more ballroom and meeting space, as well as a building a second Convention Center hotel on Commerce Street. The city will begin seeking proposals for the hotel project this fall. The funding plan approved Tuesday also addresses those projects.
The vote was 8-0 with Councilman Dennis Shingleton absent.
The city’s $225 million portion for the arena will be paid for through several channels, among them taxes on ticket sales, stall rentals and parking at the new arena that were approved by voters in November. Already, the city has spent $10 million of its portion on infrastructure work around the arena site, but has about $7 million in seed money.
But the bulk of it will come from local and state hotel taxes.
Just about two years ago, the city also established a Project Financing Zone covering a 3-mile radius around the Will Rogers Complex that allows the city to collect on an increment of the state’s portion of the city’s 15 percent hotel tax. That collection began 20 months ago. As of July 31, the account has a little more than $1.8 million, according to the Texas Comptroller’s Office.
But some cash is needed to get the project off the ground, two years before the city plans to issue about $200 million in debt on the project. Even on the debt, the city expects to only pay the interest until 2020. That’s when the taxes collected are expected to start generating enough money to cover the full debt payments.
According to projections, all the tax revenues should grow to just under $60 million a year by 2042.
“The early years are a little tight,” said Susan Alanis, an assistant city manager, but, she added, “There will be plenty of money in the long run.”
Generating savings
In addition, it has told the Fort Worth Convention & Visitors Bureau that its funding will be reduced for the next five years and has refinanced part of the $85.7 million debt in 2004 to pay for a Convention Center expansion, and an exercise pavilion and a new cattle barn at the Will Rogers Complex. The city will pay only interest on that refinancing for the next five years.
Alanis said refinancing some of that debt is saving the city $465,458, even after the term extension.
The Convention Center debt was issued in three portions, one of which was also refinanced to be paid off in 2025. Other debt will be paid in 2022 and some out longer, Alanis said.
Estimates are that the CVB will get about $8.86 million in funding this year. Next year, estimates are it will receive about $9 million, foregoing about $258,000 to the arena project. Should the hotels outside the Project Financing Zone perform better, the CVB’s payment will be higher, Alanis said.
The city funds the CVB with some of the city’s portion of the hotel tax.
CVB President Bob Jameson said the decreased dollars come as no surprise. This early belt-tightening, though, will be worth it when the projects are finished, he said.
“We have a budget number we are comfortable with,” Jameson said. “We operate in a lean manner as it is. We’re not cutting, but we’re not growing as fast as we would have otherwise. We’ve understood the potential impact laid out there. It did not lessen our support in the projects.”
Construction could begin in November on a 2,200-space, six-story parking garage for the arena. Arena construction and work on a new Convention Center hotel are slated for January 2017. Work on the Convention Center could begin by 2022.
Sandra Baker, 817-390-7727
Fort Worth City Council briefs
▪ The council voted 8-0 to increase by $100,000, for a total amount of $150,000, the amount it will pay for legal fees in connection with the acquisition and relocation of a company in the way of the new arena and parking garage. City attorneys plan to file for an injunction to force Bodycote, a U.K. company that provides thermal processing services, to allow the city on its 2.5-acre property on Montgomery Street. Councilman Dennis Shingleton was absent.
Bodycote’s property sits where a southern portion of the new arena will be built and is also in the way of the parking garage. The city and the company have been working since January regarding the acquisition and relocation of the plant, but workers have not been allowed on the property to perform environmental testing and to evaluate the property for an appraisal.
▪ The council approved 8-0 a 10-year, $7.8 million economic incentive for HRI Properties, a New Orleans-based hotel developer planning a $52 million Westin-branded hotel directly across University Drive from the Modern Art Museum that will serve as the primary hotel for the new 14,000-seat multipurpose arena planned for Will Rogers Memorial Center.
The six-story, 250-room hotel will be on University Drive between Morton and Bledsoe streets.
Under the terms of the proposed incentive package, HRI will be required to enter into room block agreements for events at the Will Rogers center and the new arena for 10 years.
— Sandra Baker
This story was originally published August 4, 2015 at 7:17 PM with the headline "Fort Worth spells out financial details of Will Rogers arena plan."