Conroe City Council approved a professional services agreement with Garfield Public Private company, to serve as the professional development services manager for the Conroe Convention Center and Headquarters Hotel project. Council voted on this at their regular meeting the evening of Feb. 13.
Council heard a presentation on the proposed agreement during their workshop on Feb. 12 at Conroe City Hall.
City Chief Financial Officer and Assistant City Administrator Steve Williams said in October of 2015, the city started the process of developing a full-service hotel and convention center.
“The thought of it actually started back in 2008-2009, when there was an initial study done, that was commissioned by the CIDC (Conroe Industrial Development Corporation), and due to circumstances with the economy at the time, it was not made a priority to move forward, said Williams. “It picked back up in earnest in 2015, and the city began the process of really moving towards actually getting the project done and making it a reality.”
Williams said the City purchased 7.55 acres in Grand Central Park, and it’s directly adjacent to the new Sam Houston State Medical School building. Williams added that the preliminary budget that they have in scope is right around $86 million for the hotel and the convention center combined. Williams talked about how it will be funded.
“Approximately $26 million of that ($86 million) will be related to the Convention Center; that will be certificates of obligation, which is a type of bond that the city can issue. “It will be repaid using kind of an array of taxes that will be generated from the facility itself; that includes hotel occupancy tax and sales tax, said Williams. “We’re even due to being included in some legislation in the most recent legislative session, and we’ll be able to recapture the state’s portion of the hotel occupancy tax, and the state’s portion of the sales tax.”
Williams said the hotel itself will be paid for with room rentals, revenues from the restaurant, the bar, the gift shop, etc.
“There will be a variety of a series of bonds that will be used to build the hotel, and after net operating income, that’s how the debt service will be paid for the hotel, he said. “All the debt service, along with the operations, will be self-contained to the property itself.”
Williams said as far as the time line for completion of the Convention Center and Hotel, the plan is to seek out a qualified firm to serve as the design builder or the general contractor.
“They’ll bring a team together, which would include an architect as well as an engineer. There will be approximately a six to seven-month design period; once that’s completed, a guaranteed maximum price will be calculated or developed for the cost of actually constructing the facility, he said. “Once that’s approved and we take delivery of all of the bonds, we’ll break ground. “The total construction timeline will be approximately 18 months, so you’re looking at, from once a design build firm is brought and put into place, a 24-month process.”