Initial financing approved for Houston convention center project

Houston First

Up to $325 million of interim financing for a $1 billion Houston convention center expansion project will move forward after the city council on Wednesday approved the issuance of notes. 

Truist Bank will directly purchase $200 million of Series C-2 subordinate lien hotel occupancy tax and parking revenue flexible rate notes, according to ordinances passed by the council. Series C-1 notes totaling up to $125 million will be directly purchased by Huntington Capital Markets.

The notes will eventually be refunded with fixed-rate, 30-year bonds.

Nearly $2 billion in funding is expected to be raised under a 2023 Texas law, which authorized the use of the state's portion of incremental hotel occupancy tax growth within a three-mile radius of the convention center for 30 years.

Dallas tapped the same revenue stream collected in a project financing zone to help fund a replacement for the Kay Bailey Hutchinson Convention Center.

Earlier this month, Houston officials unveiled plans for the George R. Brown Convention Center that include a 700,000-square-foot south exposition building that is scheduled to open in May 2028 with two exhibition halls, a multi-purpose hall, and the largest ballroom in Texas. A 100,000-square-foot pedestrian plaza will provide access to the 19,000-seat Toyota Center, the existing NBA sports arena.  

Mayor John Whitmire has said the project will be completed in time for the city's hosting of the 2028 Republican National Convention.

The convention center, which opened in 1987, has more than 1.1 million square feet of space.