HARLINGEN — The Harlingen Convention Center is one of the city’s biggest victims of the coronavirus pandemic.
Less than 18 months after it opened, the $16.7 million facility hasn’t booked a big event since the COVID-19 outbreak in March — and doesn’t plan to book an event until next year, Steven Villarreal, the convention center’s sales and marketing director, said.
“Obviously, the pandemic has had an effect on meeting spaces — not just here,” Mayor Chris Boswell said.
Villarreal said the convention center can’t host gatherings of more than 10 people as a result of local and state orders stemming from federal guidelines aimed at curbing the spread of the virus.
“With gatherings restricted, people are deciding to cancel events. That’s nationwide, worldwide,” Boswell said. “They’ll be opportunities for meetings, weddings and graduations in the future but for now those things are on hold.”
The pandemic has led organizers to cancel the Rio Grande Valley Birding Festival, the year’s biggest event for the city and its convention center.
Villarreal said the convention center’s next bookings could come next June.
“Our bookings have dwindled down to probably zero since the pandemic in March,” he said. “We have tentative bookings starting June 2021.”
Meanwhile, BC Lynd Hospitality, which operates the convention center, is searching for a new general manager after Jeff Hamel, a veteran hotel executive who took the position in February 2019, resigned earlier this month to take a regional job with another company, Villarreal said.
‘Budget meeting’
This week, BC Lynd plans a “budget meeting” with city officials, Villarreal said, adding he had no further information readily available.
The company has not presented city commissioners with its proposed budget for the upcoming fiscal year opening in October.
On Friday, Brandon Raney, BC Lynd’s chief executive officer, did not respond to a request for comment left on an answering machine at the company’s offices in San Antonio.
Covering deficit
In July, city commissioners met in closed session “to receive legal advice pertaining to the city’s rights, duties, privileges and obligations under the convention center lease and operation agreement and the working capital fund contemplated therein and related legal issues.”
As a result of the meeting, Boswell said, the city transferred $165,863 out of an original $500,000 working capital fund to BC Lynd as part of an agreement in which the city covers any deficits during the convention center’s first two years of operation. The transfer marked the city’s second disbursement to BC Lynd, he said.
“We anticipated the convention center would take a ramp-up period of a year or two years before it started generating excess revenue,” Boswell said. “There is still money left over from the $500,000. That’s all we’re obligated to contribute. They have to pay it back over time out of revenue.”
In its first months of operation during the 2019-2020 fiscal year, the convention center ran a deficit of about $200,000.
Seven months before the coronavirus outbreak last March, BC Lynd had projected the Rio Grande Valley’s newest convention center would generate $735,602 in revenues while racking up $937,991 in expenditures from October 2019 through September 2020.
BC Lynd amid pandemic
BC Lynd, a hotel developer which will begin to split any profits and cover its share of any deficits after the convention center’s first two years, is critical to the facility’s operation.
While the pandemic has deeply impacted the hotel industry, BC Lynd remains strong, Boswell said.
“There’s been some discussion about that,” he said, referring to the company amid the pandemic. “They continue to operate, they continue to serve the terms of the contract.”
Boswell said the company includes a development firm that’s built apartment buildings in cities such as Chicago and Denver.
“That organization on the construction side is a pretty big outfit,” he said.
Hotel set to open
As part of an agreement, the city agreed to fund construction of the convention center while BC Lynd built an attached hotel at Teege and Harlingen Heights roads.
Now, BC Lynd expects to complete construction of the $25 million, five-story Hilton Garden Inn in October, planning to open its doors in mid November, Villarreal said.
With 149 rooms, the city’s biggest upscale hotel is more than two years behind schedule.
In late 2018, Raney said he worked 18 months to land the “right” financing to launch the project.
At City Hall, officials have been counting on the hotel to boost the convention center’s bookings.
But amid the pandemic, hotel occupancy has plunged.
“How much business it’s going to have under these circumstances … we’re trying to book it for meetings,” Boswell said, referring to the hotel’s opening amid the pandemic.
