STRATEGIC PRIORITY: Growing
AGENDA DATE: May 28, 2025
COUNCIL DISTRICT(S): 2
DEPARTMENT: Department of Convention and Event Services
EXECUTIVE: Robin Bentley
_____________________________________________________________________
SUBJECT
title
Approve a resolution to allow for Authorize the submission, negotiation, and execution of a State Infrastructure Bank Loan Agreement of an application to the Texas Department of Transportation for a loan and repayable reimbursement grant in the amount of $90,000,000.00 consisting of a $47,000,000.00 loan; and one reimbursement request in an amount of $43,000,000.00 repayable reimbursement, to fund transit-oriented related costs for the Kay Bailey Hutchison Convention Center Dallas Master Plan, and all other required documentation to effectuate the city’s intent to borrow such funds - Not to exceed $47,000,000.00 - Financing: No cost consideration to the City Venue Project Fund; Estimated Revenue: $43,0000,000.00
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BACKGROUND
In 2018, the Department of Convention and Event Services (CES) engaged in a multi-departmental solicitation for a development process to determine a path-forward for correcting long-time deferred maintenance of the 2 million square foot Kay Bailey Hutchison Convention Center Dallas (KBHCCD). The solicitation phase for master planning understood that the demand among convention centers continues to grow for high-quality exhibition and meeting space, especially within the medical, scientific, and technical fields, and that the existing KBHCCD was losing ground at a rate that was impacting the local economy. Market analyses conducted in prior years pointed to several factors, in addition to the KBHCCD’s aging infrastructure, that were impacting the center’s salability.
Included among those factors were mobility, transportation, surrounding amenities, and overall land use surrounding the facility. The exploration of facility data demonstrated that, as a facility constructed in five phases, over several decades without consistent continuity or integration of major systems, the estimated investment level to merely correct existing deficiencies would be an estimated $500 - $600 million. As a result of that internal engagement and discussion, CES issued a combined Request for Qualifications and Request for Proposals entitled Professional Services for the Kay Bailey Hutchison Convention Center Dallas (KBHCCD) - BC20-00011768 to procure a firm to develop a multi-layered master plan for the KBHCCD and a larger study area.
A collective decision was made to draft the Kay Bailey Hutchison Convention Center Dallas (KBHCCD) Master Plan (“Master Plan”) by studying the Convention Center District as a larger and integrated economic development plan that included the convention center facility, land use, transportation and connectivity around the facility and into South and Southern Dallas, and financing.
In January 2021, the procurement evaluation process resulted in the awarding of a contract to WSP USA, Inc. to work with the Department and its broader Internal and External Stakeholder teams in the development of the Master Plan. Over the next two years and more than 350 engagement meetings with both internal and external stakeholders, a draft plan was developed, and City Council recommendations made to move the existing convention center to the west of Lamar Street, detaching The Black Academy of Arts and Letters (TBAAL) and the Dallas Memorial Auditorium (Arena) to function as stand-alone buildings. The expansion of the campus, and ultimate decommissioning of some portions of the existing building, would result in an opportunity to create a multi-use district on approximately 30-acres, while re-orienting the convention center west of Lamar Street. Additionally, the plan would allow for the re-orientation of streets, the re-envisioning of the Eddie Bernice Johnson Union Station, the repair and refreshing of Pioneer Plaza and Cemetery, and reconnection into South Dallas.
The Master Plan incorporated feedback and active participation from fourteen City departments, Visit Dallas, Oakview Group (dba OVG360), Downtown Dallas Inc., the North Central Texas Council of Governments, the Texas Department of Transportation, Dallas Area Rapid Transit, Union Pacific Railroad, chambers of commerce, local Minority/Women-owned Business Enterprises (M/WBE) development groups, and many other stakeholders.
The Master Plan also incorporated all existing City of Dallas developed plans related to transportation, sustainability, development, racial equity, arts and culture, and others. The resulting concept, and March 6 reorientation, meets multi-agency and long-term City of Dallas goals to reconnect and re-knit communities by expanding the KBHCCD in such a manner that it no longer serves as a physical and development barrier into the community referred to in the vernacular as The Cedars, which is the northernmost gateway into South Dallas and the larger southern sector.
The implementation of the Master Plan was ultimately divided into seven fundable components as outlined below:
1. KBHCCD Convention Center Expansion and proposed Enhanced Greenspace connector using the Construction Manager At-Risk Delivery Model, and the Demolition of the Existing Convention Center
2. Transportation-Related Alternatives
3. Arena using either Design Bid Build or Construction Manager At-Risk Delivery Model
4. TBAAL using a Design Bid Build or Construction Manager At-Risk Delivery Model
5. Pioneer Plaza and Pioneer Cemetery
6. Eddie Bernice Johnson Union Station
7. Land Use and Development on City of Dallas owned property within the downtown area
With the selection of Inspire Dallas in September 2023 as the Project Manager/Owner’s Representative for Component One of the master plan, Convention and Event Services and its partner departments entered the implementation phase for the project. As such, the full city team began to take the steps necessary to prepare for the financing tasks inherent in funding the project.
Those tasks included preparation for rating updates, revenue bonding, and other capital stack transactions. Included in those tasks is a review of immediate transit-related expenses necessary to substantially complete the expanded convention center, include the design and construction of deck caps at Lamar Street and Old City Park. In April 2023 and September 11, 2024, City Council authorized amended contracts and payments to TXDOT totaling $42,037,938.00 for the design and construction of the caps. In discussions with financial advisors and TXDOT representatives, staff learned the State Infrastructure Bank (SIB) offers the opportunity for reimbursement of these costs, and for additional loan funds that can be used during the convention center expansion’s construction phase to fund transit-related expenses.
This action provides the opportunity for CES staff to coordinate the drafting, submission, negotiation and execution of these applications for the reimbursement of $42,037,938.00 and a loan of $47,000,000.00 payable over 30 years.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Transportation and Infrastructure Committee was briefed on the KBHCCD Master Plan on December 8, 2020.
The City Council was briefed by memorandum regarding the KBHCCD Master Plan on January 22, 2021. <https://dallascityhall.com/government/citymanager/Documents/FY%2020-21%20Memos/Kay%20Bailey%20Hutchison%20Convention%20Center%20Master%20Plan%20update%20-%20Memo_01222021.pdf>
The City Council was briefed by memorandum regarding progress to-date on the KBHCCD Master Plan on August 13, 2021. <https://dallascityhall.com/government/citymanager/Documents/FY%2020-21%20Memos/KBHCCD%20Master%20Plan%20Contract%20Update_Memo_08132021.pdf>
The Economic Development Committee was briefed on the KBHCCD Master Plan and the Project Financing Zone on October 4, 2021.
On October 13, 2021, the City Council authorized the designation of Project Financing Zone Number One, City of Dallas, Texas by Ordinance No. 32016, by Resolution No. 21-1650.
The Transportation and Infrastructure Committee was briefed regarding the KBHCCD Master Plan Alternative Recommendation and Requirements Pursuant to Texas Local Government Code Chapter 334 on December 7, 2021.
The Transportation and Infrastructure Committee was briefed on the “Kay Bailey Hutchison Convention Center Dallas (KBHCCD) Master Plan Alternative Recommendation and Requirements Pursuant to Texas Local Government Code Chapter 334 on December 7, 2021.
The Transportation and Infrastructure Committee was briefed by memorandum regarding an update on questions presented during the December 7, 2021 committee meeting on December 17, 2021. <https://dallascityhall.com/government/citymanager/Documents/FY%2021-22%20Memos/KBHCCD%20Master%20Plan_Memo_12172021.pdf>
The City Council was briefed by memorandum regarding this matter on December 17, 2021. <https://dallascityhall.com/government/citymanager/Documents/FY%2021-22%20Memos/KBHCCD%20Master%20Plan_Memo_12172021.pdf>
The Transportation and Infrastructure Committee was briefed regarding the KBHCCD Master Plan Alternative Recommendation and Requirements Pursuant to Texas Local Government Code Chapter 334 on January 18, 2022.
The City Council was updated by memorandum regarding questions presented during the January 18, 2022 Transportation and Infrastructure briefing on January 28, 2022. <https://dallascityhall.com/government/citymanager/Documents/FY%2021-22%20Memos/KBHCCD%20Master%20Plan%20Update%20Memo%20-%20Follow-Up%20to%20TRNI%20Committee.pdf>
The City Council was briefed by memorandum regarding questions presented by a constituent regarding the KBHCCD Master Plan on January 28, 2022. <https://dallascityhall.com/government/citymanager/Documents/FY%2021-22%20Memos/KBHCCD%20Master%20Plan%20Update%20-%20Additional%20Questions.pdf>
The City Council was briefed on the KBHCCD Master Plan Alternative Recommendation and Requirements Pursuant to Texas Local Government Code Chapter 334” on February 2, 2022.
On February 9, 2022, the City Council authorized the adoption of the 3C west of Lamar alternative to implement KBHCCD Master Plan and the city manager to take the necessary steps to implement the 3C alternative by Resolution No. 22-0334.
On May 11, 2022, the City Council authorized providing advance planning and feasibility for the KBHCCD Master Plan by Resolution No. 22-0742.
On September 14, 2022, the City Council authorized a reimbursement agreement with Union Pacific Railroad Company for preliminary engineering services for the portion of the proposed expansion of the Kay Bailey Hutchison Convention Center that impacts Union Pacific Railroad’s tracks, including improvements to infrastructure by Resolution No. 22-1348.
The Transportation & Infrastructure and Economic Development Committees were briefed about the KBHCCD Master Plan - Next Steps during a special called meeting on February 7, 2023.
The Transportation & Infrastructure and Economic Development Committee was briefed by memorandum regarding questions presented during the special called meeting on February 23, 2023. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=12081687&GUID=103AA241-23F2-4BE8-8FF9-F1CC38B0F3C0>
The Government Performance and Finance Committee was briefed about the KBHCCD Master Plan and Fair Park Improvements on May 22, 2023.
The Government Performance and Finance Committee was briefed by memorandum on the KBHCCD Master Plan and Fair Park Improvements on June 13, 2023. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=12081687&GUID=103AA241-23F2-4BE8-8FF9-F1CC38B0F3C0>
On June 14, 2023, the City Council approved a resolution expressing official intent for the City to reimburse itself for costs and expenses incurred in connection with the Kay Bailey Hutchison Master Plan from obligations that will be issued after the expenditures by Resolution No. 23-0774.
On September 13, 2023, the City Council authorized a professional service contract for Component One of the Kay Bailey Hutchison Convention Center Dallas Master Plan to Inspire Dallas for Project Management/Owner’s Representation by Resolution No. 23-1254.
The Government Performance and Finance Committee was briefed on the FY 2023-24 Debt Issuance Overview on October 23, 2023.
The Economic Development Committee was briefed about the Kay Bailey Hutchison Convention Center Dallas Master Plan - Convention Center Component on February 5, 2024.
On February 28, 2024, the City Council authorized a professional services contract for Component Three of the Kay Bailey Hutchison Convention Center Dallas Master Plan to McKissack and McKissack for Project Management/Owner’s Representation by Resolution No. 24-0388.
On February 28, 2024, the City Council authorized a professional services contract for Component Four of the Kay Bailey Hutchison Convention Center Dallas Master Plan to Dikita Enterprises for Project Management/Owner’s Representation by Resolution No. 24-0389.
The City Council was briefed on The Kay Bailey Hutchison Convention Center Dallas Master Plan and Transportation Initiatives on March 6, 2024.
The Economic Development Committee was updated by memorandum about the Kay Bailey Hutchison Convention Center Dallas Master Plan Solicitations on June 3, 2024. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=12995978&GUID=42ADA9F1-4E2D-4452-92F9-76EDF1D014AA>
The Economic Development Committee was briefed by memorandum about the Kay Bailey Hutchison Convention Center Dallas Master Plan Progress, Outreach, and Engagement on August 5, 2024. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=13204845&GUID=77F4654C-4841-4359-B9A0-5D2F9FC1A112>
On September 11, 2024, the City Council authorized an amended contract with TXDOT to design and construct deck caps on Lamar Street as part of the Kay Bailey Hutchison Convention Center Dallas Master Plan by Resolution No. 24-2595.
On September 11, 2024, the City Council authorized an amended contract with TXDOT to design and construct deck caps at Old City Park as part of the study area with the Kay Bailey Hutchison Convention Center Dallas Master Plan by Resolution No. 24-2589.
On September 11, 2024, the City Council authorized a contract for Perkins and Will to provide architectural/engineering design services for Component 1 of the Kay Bailey Hutchison Convention Center Dallas Master Plan by Resolution No. 24-2587.
FISCAL INFORMATION
|
Fund |
FY 2025 |
FY 2026 |
Future Years |
|
Venue Project Fund |
$0.00 |
$90,000,000.00 |
$0.00 |
Estimated Revenue: Venue Project Fund $90,000,000.00
No cost consideration to the City.