Convention center hotel running behind

HARLINGEN — Developers are behind in the construction of a hotel to service the $14.7 million convention center.

San Antonio-based BC Lynd Hospitality expects to break ground on the 150-room Hilton Garden Inn during the first quarter of the year, Brandon Rainey, the company’s chief executive officer, told city commissioners in a meeting last night.

As part of an agreement, the city is funding construction of the 44,436-square-foot convention center while BC Lynd builds the attached hotel on an adjacent two-acre site at Teege Avenue and Brazil Road.

The finalizing of the hotel’s financing is delaying its construction “a few months behind the opening of the convention center,” Rainey told commissioners.

“We’re trying to align the convention center with the hotel as close as possible,” Rainey said.

He said the company has cut the hotel’s construction timeline from 12 months to 10½ months to tighten the gap.

The Hilton Garden Inn Hotel, considered a “select-service” hotel, “is expected to offer a small restaurant and lounge, limited room service and banquet operations,” a 2014 feasibility study stated.

“The hotel’s primary focus in the food and beverage department will be centered on banquet operations,” according to the study by HVS in Dallas.

Meanwhile, preparations at the convention center’s eight-acre site are “making really good progress,” Rainey said.

He said he expects the building’s construction to begin next month.

“I’m excited to see the project coming out of the ground,” he said.

Rainey said he continues to work to finalize the convention center’s rental rates, which he expects to present to City Manager Dan Serna in about two weeks.

Rainey said he is contacting competitors in McAllen and South Padre Island to help set the convention center’s rental rates.

“We want to make sure we’re marrying up competitive rates,” Rainey told commissioners.

The convention center, he said, is drawing inquiries.

Rainey said finalized rates “will help us respond to callers.”

“We’re excited about the volume of unsolicited calls,” he said.

In a meeting last month, Serna said Rainey was expected to present commissioners with projections on the convention center’s operating costs in last night’s meeting.

Rainey has presented the city with “preliminary revenue projections and an operating cost structure,” according to the city’s presentation last month.

However, the city has refused to release the information.

Earlier this week, Mayor Chris Boswell said the city does not expect the convention center to “break even” during its first year of operation.

As part of an agreement, the city is building a $500,000 nest egg to help fund the facility’s operation during the so-called “ramp-up” period.

Under the agreement, the city and BC Lynd will split the convention center’s profits as well as the cost of funding any deficit.

The agreement calls for BC Lynd or an affiliate to operate and manage the convention center for an initial 10-year term, with renewal options, paying operation and maintenance costs.

As part of a financing plan, the city used $9.7 million generated through the Harlingen Community Improvement Board’s sales tax and $3.8 million in hotel occupancy tax revenue to pay off the debt.

The city also used $1.96 million from property tax revenue generated through Harlingen’s three tax increment financing reinvestment zones to buy the convention center’s eight-acre site.

The Community Improvement Board funded the remaining $800,000 of the land purchase.