THE FUTURE OF JEFF CITY IS ON THE BALLOT
Projects of this scale shape a city for generations. The proposed $133 million convention plan may look like progress, but when the math fails, the debt remains. Every dollar promised today means fewer resources for tomorrow’s neighborhoods, schools, and public safety.
VOTE NO ON NOVEMBER 4TH
Jefferson City residents will foot the bill for a downtown convention center. A project that cannot sustain itself is not growth; it's a burden. Make your voice count this election.
Vote NO on the LODGING TAX EXTENSION to protect Jefferson City's future.
Taxpayers Become the Backstop.
If hotel and event revenues fail to meet projections, the city must still cover the bonds and maintenance.
The shortfall doesn’t disappear, it lands on residents.
Debt that outlives promise
Financing a $133 million project through public bonds creates decades of fixed payments.
Each year those payments continue, less money is available for roads, safety, and local priorities.
Economic Risk hidden as "Revenue Growth"
Forecasts assume full hotels and steady event bookings, but when the numbers miss, the debt remains.
Cities that tried this model have had to provide emergency funding to keep projects afloat, paying twice for the same promise.
Jefferson City Officials are Proposing a Conference Center
Jefferson City is evaluating a large public–private initiative to construct a new convention and conference center designed to increase tourism, attract large events, and stimulate downtown economic activity.
The city has identified Garfield LLC, the same developer that led the Hyatt Regency Hotel and Convention Center project in Conroe, Texas, as its proposed partner for this development. The Jefferson City plan follows a similar framework, combining a public revenue stream through a lodging-tax increase with city-issued debt and private operational management.
Under this structure, Garfield LLC would oversee design, construction, and day-to-day management once the facility is completed, while the City would remain financially responsible for repaying the bonds and maintaining the property. The approach depends on steady lodging-tax collections, high occupancy rates, and consistent event bookings to sustain long-term payments and operating expenses.
However, Conroe’s recent experience with the same developer offers important lessons about how these projections can unravel in practice.
Recent Articles from the Conroe Disaster
Conroe owes $170 million for hotel valued at less than $25 million, real estate firm says
Credit: The Houston Chronicle
Catherine Dominguez reports that the city of Conroe remains responsible for more than $170 million in debt tied to its publicly funded Hyatt Regency Hotel and Convention Center, which is now valued at only $22–$24 million. An independent review commissioned by the city found that financial shortfalls and operational underperformance have continued despite repeated public subsidies. The report underscores growing taxpayer exposure and shows how early projections failed to materialize, leaving the city with a heavily indebted asset worth a fraction of its construction cost.
Conroe to release new report on $147M Hyatt Regency to the public Thursday 10/23
Credit: The Houston Chronicle
Catherine Dominguez reports that Conroe officials will release an independent study on the city’s $147 million Hyatt Regency Hotel & Convention Center, Texas’s largest taxpayer-funded economic development project, following cost overruns, multiple credit-rating downgrades, and continued municipal support to cover revenue shortfalls.
Conroe leaders say $107M Hyatt hotel won't see a profit for years, calling project a 'money pit'
Credit: The Courier of Montogomery County
Kelsey Thompson reports that Conroe’s Hyatt Regency hotel and convention center, which opened in 2023, continues to struggle financially as city officials acknowledge low occupancy rates and limited revenue. The report notes the facility is operating at a near break-even level before debt payments and required millions in additional city funding just before opening, raising concerns about the long-term financial sustainability of the project.
Conroe approves additional $5.1 M for Hyatt Regency Conroe and Convention Center
Credit: Community Impact
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Background: The Conroe Project
Garfield Public/Private LLC launched a major public–private initiative to develop a full-service hotel and convention center intended to attract new conferences, business events, and tourism in the City of Conroe, Texas. The concept was positioned as a catalyst for economic growth — a way to elevate Conroe’s visibility and draw more visitors to the region. The project involved city financing, long-term revenue projections, and partnerships with private operators under the assumption that event demand would steadily increase. Community leaders promoted the development as a model of progress and downtown revitalization, highlighting its potential to boost local spending and create new jobs. However, after the facility opened, questions began to emerge about performance, occupancy, and financial sustainability — prompting public concern and a closer look at how the expectations compared to reality.
Project Cost: $133M
Annual Revenue: $1.5M
Debt Obligation: $133M (PROJECTED)
Break-Even Estimate: 88 years
Bond Term: 25-30 years
Average City Occupancy Rate: 50% (October 2025)
Credit Rating Impact: At risk of downgrade with continuous loss
Same Promise. Same Model. Same Risk
Jefferson City
Project Cost: $147M
Annual Revenue: <$2M
Debt Obligation: $170M
Break-Even Estimate: Unknown
Bond Term: 30 years
Average City Occupancy Rate: 50%
(June 2025)
Credit Rating Impact: downgraded after continuous losses
Conroe, Texas
What happened in Conroe?
$147 Million
Estimated cost ballooned from $97M to $147M.
$4.5 Million
In expenses vs 2.9M revenue in its first year of operation.
$5 Million
In emergency funding before doors opened
$ 3.3 Million
Annual debt service
“This hotel has become the worst and most expensive project in Conroe’s history” - Councilman Harry Hardman
If a city three times our size struggled, what makes us think we'll fare better?
Find the facts below
THE BLUEPRINT ALREADY EXISTS, AND IT DID NOT END WELL
A. ESCALATING CONSTRUCTION COSTS
Conroe’s final price rose far beyond its initial estimates after several contract adjustments and inflation spikes. When those overruns were financed with additional borrowing, the city’s annual debt service increased and the project’s breakeven horizon lengthened.
Implication for Jefferson City: Any future cost growth during construction would magnify long-term debt obligations tied to lodging-tax receipts.
B. REVENUE SHORTFALLS AGAINST PROJECTIONS
Conroe’s initial feasibility study predicted robust event and room-night demand. Actual utilization proved weaker, leaving operating revenue near breakeven before debt payments.
Implication for Jefferson City: Conservative forecasting is essential. If convention demand does not materialize, the facility’s revenue could cover only a fraction of its fixed costs.
C. EARLY FISCAL SUPPORT FROM THE CITY
In Conroe, city council members approved an unplanned allocation for working capital shortly before opening and later provided continuing appropriations to keep the facility solvent.
Implication for Jefferson City: Even a self-funded model can require immediate local subsidies if start-up performance lags.
D. CREDIT-RATING DOWNGRADES
Within a year of operation, S&P Global Ratings downgraded Conroe’s hotel-revenue bonds to BB- and CCC+, citing reduced cash flow and higher leverage. Downgrades increase future borrowing costs and signal fiscal strain.
Implication for Jefferson City: Bond ratings affect the cost of all city borrowing, not just one project; underperformance in a high-profile facility can ripple through broader municipal finances.
E. LIMITED SPILLOVER INTO THE LOCAL ECONOMY
Because the Conroe complex included a full-service hotel and on-site amenities, much visitor spending stayed within the property rather than reaching nearby restaurants or shops.
Implication for Jefferson City: If a similar design concentrates activity inside the center, the wider downtown business community may see less benefit than projected.
WHAT DOES THIS MEAN FOR JEFF CITY?
The proposed convention and conference center would tie Jefferson City’s finances to the performance of a single project funded largely through public revenue. The structure relies on increased lodging-tax collections to pay down long-term debt, maintain operations, and cover associated expenses.
At first, this might appear self-sustaining; visitors pay the tax, and the project pays for itself. But if visitor numbers or event bookings fail to meet expectations, the shortfall doesn’t disappear. It becomes a budget problem for the city.
When that happens, three outcomes typically follow:
General-fund dollars are diverted to keep bond payments current.
Core city services — infrastructure, safety, and local programs — face reductions or delays.
Future taxes or fees may rise to replace lost revenue and maintain essential operations.
Over time, the city’s fiscal flexibility tightens. Debt-service obligations and maintenance costs remain fixed, even if revenues fall, meaning the community must continue to fund a project that is not delivering on its original financial promise.
Comparable projects in other cities have shown how easily this can occur. When similar developments struggled to reach projected occupancy and event levels, local governments were forced to step in with emergency appropriations, and credit-rating agencies downgraded the associated bonds. Those downgrades increased long-term borrowing costs and delayed other planned investments.