There are several things to cover.
Full Hunden report:
09/29/2025 - Special Agenda Packet - City Council Operational Finances / ProfitabilityOn page 138 we see the expected operating loss per year. In year 5 (well after ramp up, at the
height of performance) the facility will
lose $1.6m. It is not expected to generate an operational surplus in
any year. It is important to note this loss is for the facility as a whole, and it is reasonable to anticipate that
College Station will only be responsible for a portion of this loss.
Operational losses aren't necessarily a non-starter.
Parks and rec and entertainment are expected to be cost centers. I'm calling out the anticipated losses because no one should be under the illusion that we will be realizing operational earnings like with CSU, whether for debt service or padding the general fund. That narrative is
not supported by the study.
I'm also concerned about the accuracy of the numbers. If A&M is a core partner will they really pay full price for Basketball and Volleyball, or other rentals? I'm concerned these 200 events per year are not of the kind that result in only a 1.6m loss.
Tax revenuesOn page 144 we see the expected tax revenue for College Station, and on page 145 for College Station, Brazos County and Texas.
I'm looking just at College Station
669k Sales Tax
1,290k Hotel Tax
233k Property Tax
On pages 126 and 128 we see comp convention center attendance, and it is made up of
53% and 61.3% locals (within 25 miles). This means a good portion of the new sales tax revenue is actually coming from College Station citizens, not non-citizens. This number goes way up if you consider the comps are Convention Centers, not Arenas. I won't speculate with a number, but the point is that a
significant portion of the new sales tax revenue is actually from the citizens of College Station. I'm also not confident the citizens of College Station will suddenly spend more and generate that revenue.
For the purposes of tax revenue, all events are not equal, or even close to equal. An A&M volleyball game will generate very little hotel tax and net new sales tax when compared to a convention.
I'm concerned the suggested 200 events per year and partnerships are not of the kind that results in the tax numbers represented in the Hunden study. The study considered A&M meeting facilities and sports facilities non-competitive as they prioritize university-affiliated events, so the tax revenue numbers (and operational numbers) are
not based on hosting Basketball or Volleyball. Including A&M sports in the conversation and counting them as equal to other events invalidates the study conclusions.
The study does not break down the net new Property Tax between the facility valuation and the anticipated increase in valuation of the surrounding properties. I don't believe A&M pays property taxes. The study is inclusive of the net new property taxes of the facility itself, so this number is flawed if the facility exists on A&M land.
FinancingThe six financing options on page 32
- MMID is a district with higher taxes like Midtown
- 380 is an incentivization mechanism (which incentivizes development by reducing revenue, and does not help finance a project so I'm not sure why Hunden mentioned it in this section)
- TIRZ/TIF just earmarks net new property tax revenue from increased valuations due to the development
- PFZs increase local income by capturing and retaining taxes otherwise headed to the state (but are not currently available to CS based on my reading of Tax Code 351.1015(b)). I hope I'm wrong about this, but I don't think so. Here is a committee report citing the cities eligible in 2023 and College Station isn't on it.
- HB 4347 didn't become law
- HB 2445 established the general statutory authority for what HOT money can be spent on (This bill was from the 85th legislative session and should have been referenced in the study as Tax Code 351.101(a))
Of these six mechanisms to finance the facility,
only three capture funds
primarily from non-citizens. They are PFZs, which are not available to College Station, TIRZ/TIF, I don't believe A&M pays property tax so this is moot, and Hotel Occupancy Tax, which we already collect today.
The study does note that the current city Hotel Occupancy Tax rate is 7%, which is below the statutory maximum of 9%. A 2% HOT increase is the only net new tax revenue I see that doesn't come primarily from citizens, and we could make that change with or without this facility.
The financing options I see as available can be grouped as:
- Partnerships (Bryan, A&M, Brazos)
- Sponsorships (Naming rights, etc)
- 2% Hotel Tax Increase
- Additional taxation of the citizens (which can come in many different forms, including reduction of existing services)
The study ran a scenario on page 148 that the (a) city would be on the hook for 15-50% of the cost of the center, but it does not list the funding mechanisms broken down by city and state, and I believe this analysis is flawed from the start because it includes a PFZ, which again, I do not believe College Station is eligible for.
It runs a second scenario on page 149 for the hotel that the (a) city would be on the hook for 50%. The proposed financing mechanisms here are TIRZ/TIF, HB 4347 (dead), HOT, general fund and a new entrant, a 501c(3) tax exempt bond. I don't see how a bond would work when the facility is not expected to generate a revenue surplus, but this is not my area of expertise. Without HB 4347, this is an undefined split between HOT and/or A&M (TIRZ/TIF assuming they pay property taxes) and/or the citizens (general fund).
Infrastructure ImpactWhile the Hunden report addresses existing infrastructure in the site considerations, it does not address any costs of additional infrastructure required to support a fully functional venue. To the best of my knowledge, this has not been researched or discussed to date.
I believe increased infrastructure demands and associated costs should be studied before a go/no-go decision is made in order to avoid either further taxation of the citizens or neglect of competing infrastructure needs.
Utilization / OutcomesEverything above is based on the study, differences in the current direction vs the study, or deficiencies I see in the study.
The study did not evaluate negative scenarios, such as underutilization. Hunden presented a possible outcome. I believe we will achieve a better outcome with someone like Legends Global running the facility from cradle to grave, than trying to manage it ourselves, but in no circumstance is the study outcome or any outcome a guarantee.
I believe further research should be conducted to better understand the downside risks to the citizens of College Station.
ConclusionI don't have one. I just wanted to share my notes. Please point out anything I got wrong. This is not my expertise.
