Officials: Convention center not taking business; Some smaller event venues drop bookings

HARLINGEN — The Harlingen Convention Center is drawing new business from across the Rio Grande Valley.

Meanwhile, revenues are slipping at some of the city’s smaller event venues.

But city leaders aren’t blaming the region’s newest convention center.

When the $16.7 million convention center opened last May, critics questioned whether the swanky venue would pull business from Casa de Amistad, Casa Del Sol, the Community Center and the Cultural Arts Center.

But since at least 2017, bookings have dipped at most of the smaller event centers.

“Revenues are going to vary from year to year depending on use,” City Manager Dan Serna said.

Residents’ pocketbooks are playing a role in rentals, said Assistant City Manager Gabriel Gonzalez, who oversees the event centers.

“It’s the economy in general,” he said. “Less people are spending.”

Figures show some of the four event centers were losing money before the convention center opened.

“We knew there wasn’t going to be much of an impact,” Gonzalez said.

Mayor Chris Boswell said the convention center is drawing business from a new market.

“The convention center is a completely different market and now we’re attracting events that we weren’t attracting before because they were looking for a larger venue — or other venues weren’t what the new customers wanted,” Boswell said.

While the convention center is luring business from outside of town, the smaller event centers tend to draw local residents.

“The facilities cater to different genres in the community,” Gonzalez said.

Instead of taking business away from the smaller event centers, the convention center is drawing new events formerly held in Brownsville and McAllen, General Manager Jeff Hamel said.

“The convention center is doing such a great job of marketing so they’re attracting venues from outside of Harlingen,” Gonzalez said.

Revenues dip

The area’s privately-owned event centers might be taking a bite of the local rental market.

“We’re not only competing within the city,” Joel Humphries, the city’s arts and entertainment director, said. “You’ve got private event centers as well.”

Outside of six summer weeks, the city’s four smaller event venues stay busy, Humphries said.

“We’ve got a full plate in front of us,” he said. “We try to serve the people that need us the best we can. We try to give folks who rent our facilities the best experience they can have.”

Catering to customers

Each venue caters to different customers, Gonzalez said.

Casa de Amistad’s customers put on events such as boat expos and real estate shows, he said.

Meanwhile, he said, customers who rent Casa Del Sol also stage such events as weddings and quinceañeras.

At smaller venues such as the community center, many customers hold classes while at the Cultural Arts Center, the city’s smallest venue, residents host events such as birthday parties and small meetings, he said.

Price-points

The city’s five event venues are priced to cater to different customers, Serna said.

“We have facilities that fit any budget for any type of event,” he said.

At the 44,000-square-foot convention center, clients can book the main Great Kiskadee Ballroom for $6,000 while small meeting rooms rent for about $200.

For smaller events, the city rents Casa de Amistad for $2,050.

Meanwhile, the Casa Del Sol and the Community Center rent for $1,300 while residents can rent the Cultural Arts Center’s meeting rooms for a little as $20 an hour.

Finding the right fit

It’s part of Humphries’ job to help customers find the right fit.

“A lot has to do with how many people are attending your event,” he said. “Some folks have the idea when they come in. If we can give them guidance, we do. It helps to have a conversation. ‘What type of event is it? How many people will attend?’”

Convention center’s draw

Across the Valley, the convention center’s central location has become its strongest selling point, Hamel said.

“We’re centrally located,” he said. “That’s our biggest draw.”

Since opening last May, the facility has pulled business from across the region to draw events such as graduation ceremonies for the University of Texas Rio Grande Valley and Idea Academy, he said, adding some customers have also booked other events such as weddings.

“A lot of our events are corporate-based or education-based,” Hamel said. “They’re being pulled from Brownsville or McAllen. The talk-track with our clients is they don’t have to drive (far). The companies save money because they don’t have to pay as much mileage or over-night stays at South Padre Island.”

Budget projections

During the convention center’s first year of operations, BC Lynd Hospitality, which operates the facility, projected it would run a $202,389 deficit during the 2019-2020 fiscal year — not bad for its first year of operation, officials said.

Through September 2020, the Rio Grande Valley’s newest convention center is expected to generate $735,602 in revenue.

Meanwhile, expenditures are projected at $937,991.

Under an agreement, city officials set aside $500,000 to cover any deficits during the convention center’s first two years, or “ramp-up” period.

As part of the public-private partnership, officials funded the convention center’s construction while BC Lynd agreed to build an attached upscale hotel at Teege and Harlingen Heights roads.

Meanwhile, BC Lynd agreed to operate and staff the convention center, splitting any profits and deficits with the city.

At City Hall, officials are counting on BC Lynd’s hotel to help boost the convention center’s revenues.

Now, the $25 million, five-story Hilton Garden Inn is expected to be completed in July, about two years behind schedule.

Late last year, Brandon Raney, BC Lynd’s chief executive officer, said he worked 18 months to land the “right” financing to launch the project.

In South Texas, the construction project marks the first to connect a convention center and hotel.

Revenue by the numbers

2016-2017

Casa Del Sol — $53,914

Casa De Amistad — $78,513

Cultural Arts Center — $23,445

Community Center — $42,030

2017-2018

Casa Del Sol — $55,890

Casa De Amistad — $71,599

Cultural Arts Center — $23,115

Community Center — $35,593

2018-2019

Casa Del Sol — $41,878

Casa De Amistad — $68,494

Cultural Arts Center — $37,123

Community Center — $35,922