Unconventional Austin rallies for Proposition B

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John Riedie, CEO of Austin Creative Alliance, appeals for support of Proposition B.

But PHAM PAC opposition may be formidable

John Riedie, CEO of Austin Creative Alliance urged a crowd of some 60 people to “Vote Yes on Prop B” in the November 5, 2019, election.

Riedie was the first to speak at a get-together of Unconventional Austin supporters held September 1, 2019.

Brian Rodgers

The event was hosted at the Old West Austin Neighborhood home of Brian Rodgers, a longtime civic activist, whistleblower, and real estate investor who was appointed to a seat on the City’s Tourism Commission April 29, 2019. Rodgers, who donated money for the Prop B petition drive, has researched the City’s plan to expand the Convention Center and is staunchly opposed on a number of grounds.

Riedie, a member of Austin’s Tourism Commission since June 2018, said the Austin Convention Center lost $35 million last year and if expanded it will lose even more.

“We want to cap that and spend money things that people come here for, including $10 million a year to grow music, to pay musicians to be here. And we could do the same for small business,” he said.

If voters approve Prop B, then funding for the convention center would be limited to 34 percent of Hotel-Occupancy Tax revenue. That would leave more money to spend on cultural arts, historic preservation, and Austin’s cultural tourism industry.

In addition, Prop B would require voter approval before expanding the Convention Center at a cost of more than $20 million. That would put a serious crimp on current plans to spend an estimated $1.2 billion as currently planned, a figure that critics say is far lower than actual costs.

Fred Lewis

Attorney Fred Lewis, a donor to Unconventional Austin’s petition drive that got Prop B on the ballot, said, “It’s preposterous to have laws so we can’t vote” on the Convention Center expansion.

The hotel-occupancy taxes total more than $100 million a year, Lewis said. Capping the Convention Center’s share to 34 percent, “would free up millions of dollars in real money to meet real needs. It’s about priorities.”

Rob Golding explains why he supports both Prop B and the Travis County Prop A.

Rob Golding, CEO of Rodeo Austin, said his organization is 501(c)(3) nonprofit that “brings 300,000 people here” each year, over a two-week period.

Golding said Rodeo Austin supports backing Proposition B as well as the Travis County proposition that also will be on the November 5 ballot.

He said, “This isn’t about Rodeo Austin. It’s good for the county, good for the city, and good for East Austin to finally get some attention. The Exposition Center is underfunded.”

“This is about what’s right for the community,” Goldman said. “The City has poured money into the Convention Center for 30 years.”

Strong opposition to Prop B

As The Austin Bulldog reported July 15, 2019, Unconventional Austin spent more than $131,000 to gather 30,000 signatures of people who supported putting Prop B on the ballot. Getting those people to go vote, however, is a lot harder than getting them to sign a petition.

And they won’t be running a Vote Yes campaign in a vacuum.

Political action committee PHAM PAC was formed July 12, 2019, for the sole purpose of making sure that Prop B goes down in flames.

Jim Wick
Jim Wick

The Prop B opposition campaign is being run by Jim Wick. He most recently steered the reelection campaign of Mayor Steve Adler, who on November 6, 2018, defeated six opponents without a runoff.

Adler didn’t just win. He obliterated chief opponent and former Council Member Laura Morrison with a monumental 40-point margin of victory.

While Wick has a track record of winning elections he says he’s not taking this one for granted.

“I take elections very seriously and I’m taking this election seriously,” he said in a phone interview. “The electorate is volatile and unpredictable in the Trump era. I can’t  take anything for granted, including the turnout, the attitude of the electorate, or potential outcomes.”

“I’m not going to speculate. It’s difficult to game an election like this and what will happen, given the complexity. I think it’s important for the community to have this conversation. I don’t think there’s anything such as an easy election.”

Future fundraising crucial

Because PHAM PAC was formed after the June 30, 2019, end of the campaign finance reporting period, it need not reveal its financial donors or amount raised until October 7, just 30 days before the election. That gives it the freedom to raise and spend money through September 26 (the last day included in the October 7 report) while keeping Unconventional Austin in the dark.

Unconventional Austin’s Specific-Purpose Committee Report filed July 15 showed it had netted slightly more than $126,000 in contributions through June 30 and had more than $19,000 in cash on hand. It also reported $35,000 in outstanding loans. Nearly all of that money was spent on the petition drive, leaving campaign coffers depleted.

Rodgers said to those attending the September 1 event, “I put money in to get this on the ballot. We need your money too.”

Wick said of PHAM PAC fundraising, “I think it’s going fine.”

Asked who will donate to defeat Prop B, Wick said, “I’m going to members of the community that stand to reap benefits from the expansion. I’m asking advocates on Palm School preservation, homeless services, and then the arts and music communities, which is PHAM.”

With just 55 days remaining before the election, both PACs will be scrambling to find donors.

Law doesn’t require election for expansion?

Austin voters got to weigh in on Convention Center spending twice before. The Austin City Clerk’s Election History website provides details about those two elections:

The 1989 vote—In the election held July 29, 1989, the Convention Center was the only item on the ballot, and 47,096 of the 256,092 registered voters cast ballots. Fifty-six percent of them voted to approve construction not to exceed $69 million. The bonds were to be repaid from Convention Center revenue and 4.5 cents of the hotel-motel bed tax [now known as the hotel-occupancy tax]. Use of money from the general fund to repay the debt, including property tax proceeds, was specifically prohibited.

The 1998 vote—In the election of May 2, 1998, the Convention Center was on the ballot again, this time paired with two propositions to fund water, wastewater, and drainage improvements. Fifty-eight percent of 42,910 voters who cast ballots on Prop 1 said yes to authorize “planning, acquisition, establishment, development, construction, and financing of the Convention Center/Waller Creek Project and to impose a hotel occupancy tax at a maximum rate of 2 percent” for financing.

Law allows bypassing voters to expand Convention Center

The looming question is: if elections had to be held to build or expand the Convention Center, why isn’t an election required now to expand it again?

Attorneys who researched this question provided The Austin Bulldog with an analysis which, suffice to say, is too lengthy and complex to cite verbatim. It involves a tangle of chapters in the Texas Tax Code, an Attorney General’s opinion, and the Austin City Charter.

Attorney Lewis concludes the City is misapplying state preemption law, an area in which he has experience. Lewis acknowledges that state law under Chapter 351 of the Tax Code does not explicitly require a public vote. But he maintains that does not prohibit Austin, as a home-rule city with plenary power, from having a vote.

Be that as it may, the Austin City Council has already decided not to ask voters to approve the Convention Center expansion and can’t do so now because August 19 was the last day on which it could have ordered an election.

The revised Prop B ballot language

On August 8, 2019, the Austin City Council voted to put the proposition on the ballot but described it in terms that weren’t acceptable to the petitioners.

Nelson Linder

Nelson Linder, president of the NAACP Austin Branch, represented by Fred Lewis, on August 16 filed a 39-page Emergency Original Petition for Writ of Mandamus with the Third Court of Appeals (Case No. 03-19-00553-CV).

The City of Austin on August 20 filed a 369-page response in opposition.

The Third Court of Appeals issued a nine-page decision August 22 that required the City to make changes. The decision stated, in part:

“In sum, the ballot language ordered by the City Council affirmatively misrepresents future election costs associated with the ordinance and also omits a chief feature of the proposed ordinance—the fact that the ordinance would require the City to prioritize the spending of hotel-occupancy tax revenue on cultural arts, historic preservation, and ‘Austin’s Cultural Tourism Industry,’ to the exclusion of other uses allowable under the Tax Code. Accordingly, the ballot language does not substantially submit the proposed ordinance with such definiteness and certainty that voters will not be misled. We hold the ballot language is inadequate under the common-law standard for ballot integrity, and as a result, the City abused its discretion by adopting that language.”

The Court directed the City to modify the ballot language consistent with the opinion.

In a special-called meeting August 26, the council voted unanimously to reword the ballot language as follows:

Proposition B: Shall an ordinance be adopted that prioritizes the use of Austin’s Hotel Occupancy Tax revenue by continuing the City practice to spend 15 percent of the Austin Hotel Occupancy Tax revenue on cultural arts and 15 percent on historic preservation, limiting the City’s spending to construct, operate, maintain, or promote the Austin Convention Center to 34 percent of Austin’s Hotel Occupancy Tax revenue, and requiring all remaining Hotel Occupancy Tax revenue to support and enhance Austin’s Cultural Tourism Industry to the potential exclusion of other allowable uses under the Tax code; and requires the City to obtain voter approval and public oversight for convention-center improvement and expansion costing more than $20,000,000. (Ordinance No. 20190826-001)

Other November 5 ballot items

This time voters will have a lot more to ponder than did those who voted on the Convention Center in 1989 and 1998, as the ballot will have a total of 13 items.

In addition to Proposition B, the following items will also be on the ballot:

City Proposition A—This comes courtesy of petition backing from Circuit of the Americas CEO Bobby Epstein.

The petition ordinance if approved by voters would trigger elections any time the city sells or leases city-owned land for the purpose of a sport or entertainment venue, the Austin American-Statesman reported August 26, and would require the owner or operator to pay property taxes.

The ballot language for Prop A was challenged in court but denied by the Third Court of Appeals. Epstein reportedly later backed out of supporting the proposition.

County Proposition A—In a special voting session August 19, Travis County Commissioners unanimously approved designating the Travis County Exposition Center, adjacent support facilities, and related infrastructure as a venue project in accordance with Texas Local Government Code Chapter 334.

The designated method of financing for the venue project is the imposition of a new hotel occupancy tax. If voters approve, this would allow the county to collect taxes from hotels outside Austin’s city limits but within Travis County.

In its September 3 meeting, the Commissioners Court unanimously approved a motion to change the name of the proposition to call it Travis County Proposition A Exposition Center.

Constitutional Amendments—Ten proposed changes to the Texas Constitution will be on the November 5 ballot as well. For details, see the Texas Secretary of State’s website.

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Links:

Emergency Original Petition for Writ of Mandamus, August 16, 2019 (39 pages)

City of Austin’s Response in Opposition to Emergency Original Petition for Writ of Mandamus, August 20, 2019 (369 pages)

Memorandum Opinion, Texas Court of Appeals, Third District, at Austin, August 22, 2019 (9 pages)

Related Bulldog coverage:

Unconventional Austin spent more than $131,000, July 15, 2019

Petition filed to force convention center vote, July 12, 2019

Trust indicators:

Photo of Ken MartinKen Martin has been covering local government and politics in the Austin area since 1981. See more on Ken on the About page.

Email [email protected].

Who funds this work? This report was made possible by contributions to The Austin Bulldog, which operates as a 501(c)(3) nonprofit for investigative reporting in the public interest.

An alphabetic list of donors who have contributed to The Austin Bulldog since the organization was formed in 2009 and the cumulative amount each person has given through December 31, 2018, are listed on the Contribute page. 

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