Mayor Tom Leppert announced today that the City of Dallas completed the first major step in the sale of bonds for the Convention Center Hotel.

On August 17th and 18th, the City received buyer commitments for all $479.8 million in revenue bonds offered to investors. The sale included a combination of taxable, tax-exempt, capital appreciation and Build America Bonds.

The average interest rate finalized at 4.69%, well below the 5.5% cap set by the Dallas City Council and included in early financial projections.

“This really speaks to the strong position of Dallas,” said Dallas Mayor Tom Leppert. “Investors clearly felt confident in the area’s economy, in the management of the City and in the future of our convention and hospitality business.”

The bond sale will close in approximately two weeks and construction would begin a week later with estimated completion in early 2012.

The revenue bonds will cover the purchase of the property, the development and construction of the hotel and provide several contingency funds to protect Dallas taxpayers. The bonds will be repaid by the guest revenue generated at the 1,016-room hotel.

“The lower rate makes the deal even more attractive for the City,” said City Manager Mary K. Suhm. “It reduces the cost of the project, the amount of debt service and will help the hotel be profitable from day one.”

The hotel will be located on 6-acres of an 8-acre site at the corner of Harwood St. and Young St. in Downtown Dallas adjacent to the 2,100,000 square foot Dallas Convention Center. The hotel’s developer is Matthews Southwest, and the hotel operator is Omni Hotels.

Since Dallas voters approved the hotel last May, the Dallas Convention & Visitors Bureau has seen a dramatic rise in conventions and citywide bookings, says the organization’s CEO Phillip Jones.

“While other cities are struggling to reach their booking goals due to the recession and poor economy, we’re on pace to exceed our goals and book more than one million room nights for the second year in row,” said Jones.

“We said this would be a good deal for Dallas taxpayers,” said Mayor Leppert. “And with this start, it will be even better!”

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