Austin, Texas, convention center bond sale greenlit by court

Austin, Texas, is gearing up to sell up to $1.35 billion of special tax revenue bonds for a convention center after the debt was validated by a state court.

A final judgment issued last week by a Travis County District Court declared the Series 2026 bonds legal and valid and noted the judgment is a permanent injunction against any filing or proceeding contesting the bond's validity or any expenditure related to the bonds.

The timing for the bond issuance is being evaluated, according to a city spokesperson.

Proceeds will help finance a $1.6 billion project to replace the city's now-demolished convention center with a facility slated to open in 2029 that will increase rentable event space to 620,000 square feet from 365,000 square feet.

The bonds, which were approved by the Austin City Council in May, are backed with revenue from certain city hotel occupancy taxes and incremental state tax revenue generated within a project finance zone the city established in 2024.

Bank of America (BAC) is the lead manager of the bond underwriting team consisting of co-senior manager Mesirow and co-managers Hilltop Securities and Loop Capital Markets. PFM Financial Advisors is the municipal advisor, Norton Rose Fulbright is bond counsel, and Orrick, Herrington & Sutcliffe is disclosure counsel.

In Dallas, where an expanded Kay Bailey Hutchison Convention Center is planned, the city council on Wednesday rejected a proposal to redesign the project to address traffic concerns. The move would have increased the cost of the estimated $3.34 billion project, financed by $2.24 billion of revenue bonds and other sources, and delayed the facility's expected 2030 opening.