City of Corpus Christi Entitlement Could Total $177 Million Over 30 Years
The Texas Legislature has approved a priority legislative request from the City of Corpus Christi, pending final approval from Governor Greg Abbott. In 2023, Senator Juan “Chuy” Hinojosa, alongside the Coastal Bend legislative delegation, passed House Bill 5012, which allowed for the creation of a Project Finance Zone (PFZ) around the American Bank Center. This PFZ authorized the City to retain 4% of the Hotel Occupancy Tax (HOT) from hotels within a three-mile radius of the American Bank Center to fund improvements and expansions of the convention center.
As of 2023, the only cities authorized to designate PFZs are Fort Worth, Dallas, Houston, Austin, San Antonio, and Corpus Christi. Cities receive incremental hotel-associated revenues from hotels located within the three-mile radius for a 30-year period.
On December 10, 2024, the Corpus Christi City Council acted to create Corpus Christi PFZ #1, centered on the American Bank Center and covering a three-mile radius. However, unlike the five other cities authorized to establish a PFZ, 56.74 percent of Corpus Christi’s PFZ #1 (16.04 square miles) is located in the Gulf of Mexico, where no hotels exist. In response, Senator Hinojosa and Representative Denise Villalobos filed SB 1250 and HB 2877 during this legislative session to address this issue.
Senator Hinojosa stated, “Unfortunately, the fish in the Gulf do not pay hotel taxes. To maximize the benefit of this PFZ, we needed legislation to fix the boundaries and capture more hotels, which will increase the funding available for planned improvements at the American Bank Center. The passage of House Bill 2313, which was amended to include the language to adjust Corpus Christi’s PFZ, is a significant victory for the City of Corpus Christi.” He added, “The American Bank Center is a great venue, and these upgrades will attract more events to the Convention Center, Selena Auditorium, and the Arena, bringing more tourists and business to our community.”
According to the Legislative Budget Board, for the first five years after the new zone designation authorized by this bill, estimated state tax revenue entitlements are expected to increase by almost 90%, rising from $6.7 million to $12.7 million. Over the 30-year life of the zone, the estimated entitlement to state tax revenue is projected to grow from $94.1 million to $177.5 million.
“I appreciate the leadership of Mayor Paulette Guajardo, the members of the City Council, and city staff for their tireless efforts in educating legislators about the importance of this legislation,” said Senator Hinojosa. “Teamwork is important for getting any bill passed during the session. I also thank Representative Denise Villalobos, Chairman Todd Hunter, Senator Perry and Representative Tepper for their work in passing HB 2313.”
