Austin (KXAN) — On Friday, the Deputy City Clerk found that the Unconventional Austin PAC had gathered enough signatures on their petition challenging convention center expansion to meet the city and state threshold.
The Austin City Council unanimously voted in late May to begin the process of expanding Austin’s Convention Center. It’s part of the creation of a Palm District Master plan, which would re-envision the convention center, revitalize the area around it, improve transportation, and preserve the former Palm Elementary School, which closed in 1976.
The Unconventional PAC was created two days before that vote.
A spokesperson for the city said the City Clerk found that out of the 31,908 signatures Unconventional Austin gathered 24,481 were valid signatures. Any amount 20,000 or above meets the standard laid out by city charter and state law to validate a petition.
Unconventional filed its first paperwork with the city on May 21 and turned in their signatures to the city on July 12.
Now, the city council must either adopt the ordinance as it is written or they can call an election to put it on the ballot in November. Council will discuss both of these options at their upcoming August 8 meeting.
Even Unconventional Austin thinks it’s likely this ordinance will wind up going before voters, in a release Friday, the PAC said they don’t expect the council will adopt the ordinance.
City Manager Spencer Cronk was directed by council to explore Scenario 5 from a UT Austin study about convention center expansion options. Scenario 5 was the most expensive of the scenarios offered and is estimated to cost more than $1.2 billion.
In mid-July, a city spokesperson explained to KXAN that city staff has only just begun analyzing the scenario and that “it is too early in the process for the City to speculate about the estimated cost of expansion.”
What’s on the petition?
If the language on the petition goes on the ballot in November, voters would decide on whether voter approval should be required for any expansions or remodeling of the Austin Convention Center costing more than $20 million.
The petition would also establish other requirements for Austin’s use of Hotel Occupancy Tax revenue, asking that more of those dollars be used for things other than the convention center.
The Hotel Occupancy Tax (HOT) in Austin is 15% — 9% of which is paid to the City of Austin and of that amount 7% goes to hotel taxes and 2% goes to a venue tax. 6% is paid to the State of Texas. The revenue is used to promote tourism and the convention hotel industry in Austin.
The Unconventional petition would limit the Convention Center to receiving 34% of the total annual Hotel Occupancy Tax Revenue. It also would require that 15% or more of that HOT revenue go to a historic preservation fund, and 15% or more go to the cultural arts fund, with the remaining dollars going to enhance Austin’s “cultural tourism industry.”
As KXAN previously reported, Scott Joslove, CEO of the Texas Hotel Lodging Association and Austin Tourism Commissioner, said that under state tax code, Austin cannot increase the percentage of total hotel tax dollars going to the arts or historical restoration any further than it already has.
The Texas Municipal League sent Joslove an opinion in May advising that most Texas cities with more than 200,000 people are capped at 15% of local hotel tax dollars going to the arts and 15% going to historic preservation. They advised that a city can’t use alternative categories to work around the 15% limits.
Unconventional differs in how they believe the tax code can be interpreted, suggesting that convention center expansion benefits the “multinational corporate hotel lobby.”
Jim Wick, a political consultant and Austin Mayor Steve Adler’s former campaign manager, has launched a PAC to oppose Unconventional. He has doubts about Unconventional’s interpretation of the tax code.
“Their plan is unvetted and untested and includes significantly fewer benefits than the council’s plan,” Wick said. “As we move toward the election in November, I hope there’s time for a robust community conversation on what’s best for the community.”
Wick said there is a wide cross-section of interests looking to oppose Unconventional, including members of the arts community, homeless advocates, people involved with music festivals, and people in the broader hotel/hospitality industry. Wick plans to have an announcement in the next few weeks about who the people and organizations are supporting his PAC. Red River Cultural District Executive Director, Cody Cowan, is the treasurer for Wick’s PAC.
“I would be shocked if the council adopted the initiative ordinance,” Wick said, explaining he believes that the Unconventional ordinance will be on the November ballot.
Several city leaders, including Austin Mayor Steve Adler and Council Member Jimmy Flannigan, have voiced skepticism about Unconventional.
“State law governing uses of hotel (HOT) taxes are clear,” Adler Tweeted on June 2 in a thread discouraging people from signing the petition. “Council endorsed the BROADEST USES ALIGNED WITH CITY GOALS. Anyone who claims we could use funds for endless purposes unrelated to Convention Center is either misinformed or misleading you.”
Adler has maintained that the vision for convention center expansion would give Austin access to $300 million dollars over 10 years for civic projects, the arts, historic preservation, the music industry, as well as having a dedicated stream of funding to address homelessness downtown.
“The petition puts at risk millions of dollars in tourist-paid funding for homelessness programs and music venue support,” Adler said in a statement to KXAN Monday. “All Council and community organizations unanimously support the expansion proposal. And it would not cost local taxpayers a dime.”
“We can’t let a small group of people tie us all to the status quo,” the mayor continued. “Our city waited too long on mobility and homelessness as well as housing affordability. We can’t wait. We have to move forward.”
In campaign finance reports filed on July 15, Unconventional Austin reported using $125,400 of the $131,386.68 it spent to pay Texas Petition Strategies, a company based out of Buda, for salaries, wages and contract labor related to petition gathering.
Donations to Unconventional Austin from the Save our Springs (SOS) Alliance and SOS executive director Bill Bunch total to $74,166, which makes up more than half of the $126,042 in political contributions the PAC raised. KXAN found that many of the donors had also previously donated to SOS.
SOS contributed $51,343 (though SOS tells KXAN that amount came from four specific SOS donors, not from the SOS general fund). SOS explained that only a very small part of the money they receive from general donors would go toward the petition drive.
City records show that $51,343 came from four donors: Austin Tourism Commissioner Brian Rodgers donated $20,000, John Kirk Mitchell (who has had leadership roles with the SOS board) donated $20,000, Jennifer Clark donated $10,000, and Roger Baker donated $1,343.
Clark also donated an additional $10,000 directly to the Unconventional PAC and Rodgers donated an additional $6,000 directly to the PAC.
When you count the donations from SOS, Rodgers contributed the largest amount of personal dollars toward this PAC.
The Indy Austin PAC website lists Mitchell and Rodgers as some of the largest contributors to Indy Austin as of August 15, 2018. In 2018, Indy Austin helped with petition efforts for both Proposition J and for the petition aimed at challenging the deal to bring an MLS stadium to Austin.
Other supporters of Unconventional Austin include Michael Kleinman, owner of the Planet K store franchise, Austin Tourism Commissioner John Riedie, and Rebecca Melançon, executive director of the Austin Independent Business Alliance (AIBA).