Austin Weighs Incentives for 1B Circuit of the Americas Hotel

Austin officials are considering a major incentive package to help jumpstart a nearly $1 billion hotel and convention center project next to the Circuit of the Americas, betting a destination-style resort can deepen the city’s tourism economy.

Houston-based Rida Development Corporation is proposing a 1,000-room hotel and 460,000-square-foot convention center adjacent to the Formula 1 track. It is southeast of the city about 15 miles from downtown and 10 miles from the Austin-Bergstrom International Airport, with roughly 170,000 square feet of rentable meeting space. The Austin City Council is set to vote Thursday on an economic development agreement that would underpin the project, according to the Austin Business Journal.

City documents peg the total investment at $985 million, positioning the development as one of the largest hospitality projects in the region. If built, it would rank as Austin’s third-largest hotel, trailing only the Fairmont Austin and the JW Marriott Austin.

The incentive structure is performance-based, with the city rebating a portion of hotel occupancy tax revenue generated by the property over as long as 30 years, according to the publication. Payments wouldn’t begin until the hotel is operational and generating tax revenue, a structure city staff contend limits upfront risk.

Officials estimate the project could generate roughly $200 million in property and sales tax revenue over three decades, according to the outlet. In exchange, Rida would be required to meet local hiring goals, adhere to labor and construction standards and provide annual compliance reporting.

The proposal comes as Austin faces mounting fiscal pressure and looks to expand its tax base. City staff framed the deal as a way to secure a “destination-scale hospitality investment” that could create about 900 permanent jobs and 3,800 construction positions, the publication reported.

Rida is no stranger to large-format hospitality. The firm developed the Marriott Marquis in Houston and the Omni Orlando Resort at ChampionsGate, both sprawling properties anchored by convention space. Supporters argue that that track record strengthens the case for public backing, according to the outlet.

The planned convention center would be smaller than Austin’s under-construction downtown facility, which is slated for 620,000 square feet of rentable space by 2029. Instead of competing directly, Rida’s project is expected to target mid-sized events seeking a campus-style setting tied to the Circuit of the Americas complex.

Circuit of the America’s Chairman Bobby Epstein has said the project could unlock new types of events, from auto shows to product launches, while complementing an amusement park development underway at the site, according to the outlet. The agreement also includes a labor peace provision with Unite Here Local 23 and commitments to incorporate local art and music programming.

The project faces a 12- to 18-month design and entitlement phase, followed by up to three years of construction.

— Eric Weilbacher