EDINBURG, RGV – Edinburg Economic Development Corporation’s plan to become a destination city for sports events has received a boost with the passage of legislation that redefines how hotel-motel taxes can be used.
Senate Bill 1136, authored by state Sen. Juan “Chuy” Hinojosa and sponsored by state Rep. Terry Canales authorizes the use of municipal hotel occupancy tax revenue for sporting-related facilities for the City of Edinburg.
“Edinburg is experiencing rapid growth and quickly becoming a tourist destination, having just finished the construction of a 9,000-seat professional soccer arena attracting tourists from all over the state,” said Hinojosa.
“SB 1136 will allow Edinburg to use the municipal hotel occupancy tax revenue to pay for the construction, maintenance, and expansion of the new soccer stadium and other sports related venues.”
Canales said SB 1136 amends the tax code to allow hotel-motel tax (HOT) revenue to be used if certain criteria are met. Specifically, if the municipality’s sports facilities and fields have been used in the preceding year a combined total of 10 times for district, sate, regional, or national sports tournaments.
Hinojosa said the city has ten years to ensure the tax revenue on the sports facilities are less than the revenues of the area hotels attributable to sporting or other events held at the facility of fiend. If not, the city will reimburse the municipal HOT revenue fund from the city’s general fund.
“I am proud to author legislation that allows Edinburg to utilize municipal hotel tax revenue to build more sports related facilities, and at the same time attract tourists to the Rio Grande Valley so that our hotels and restaurants continue to experience significant growth and sales,” Hinojosa added.
Mayor Richard Garcia
Edinburg Mayor Richard Garcia chairs the Edinburg EDC board of director. After a meeting of the board on Tuesday, Garcia gave his views on SB 1136 and other economic development projects.
“The hotel/motel tax has been good for us. It is growing because we have been growing. There has always been a little bit of contention with the hoteliers because they want the money used for. The law is very definitive on what you can spend the money on. They want to promote their businesses so they get more business. I think the Legislature has realized that if we look at the whole big picture, we can help these hotels by investing in projects that can bring people into the city so they can stay at the hotels and motels,” Garcia told the Rio Grande Guardian.
“The good news is we can use this money for a variety of things and basically spend it on sports-related projects. We have the Vipers, we have the Toros, we have the arenas and the stadiums, what have you. We can think about spending these monies to help promote the city in a big way.”
Garcia said that hotel and motel owners are protected by SB 1136.
“You have ‘must stay’ sections (within) the contract when you bid on an event. Which means that people that are going to participate, perhaps a competition that is coming to your city, that they must stay within the hotels and motels in the city, and then the hoteliers provide a package deal, such as a reduced rate amount for the night. It is a win-win for everybody, as opposed to just spending the money to advertise in the media, you are taking it to the next level,” Garcia said.
Asked if SB 1136 was Edinburg’s No. 1 legislative agenda item, Garcia said: “It was very important given the direction the city has taken. We were hoping and pushing for it.”
Asked if passage of SB 1136 gives better direction on how Edinburg EDC can spend hotel-motel tax revenues, Garcia said: “The law takes any issue out of it. As it was before, there was some contention about whether we could use the monies for other things. Now, it is spelled out well and it is set aside for a certain thing and there is transparency. We have to provide reports every four years, two years, etc., as to how the money is being spent. It keeps us in line with what it is supposed to be used for.”
Another benefit of the legislation, Garcia said, is that it will free up money for other uses. “We are hopeful that in some ways, also, it will free us some other money so we can participate in a bigger way… there are some big, sporting-type venues that are more on the retail side but that are looking at our area and we are competing on at this point. It is a big picture.”
One of the conversations Edinburg leaders are having right now, Garcia said, is setting up a sports authority.
“We have had a conversation about the future. Most big cities, the Dallas-Fort Worth area, San Antonio, Houston, they are sports authorities. We are looking at this possibility. You form a board, you have a director and you move towards, not just promoting but bidding on sporting events for the area, all types of different events,” Garcia said.
Asked if this would be the first time a sports authority has been set up in the Valley, Garcia said: “I think so. We are talking about Edinburg here. We have worked hard to develop these destinations in our city. This would be a partnership with hoteliers, with the county, with various groups in the area, so it is more regional in scope. Certainly, we would lead the charge in our city.”
Asked if passage of the new legislation would allow Edinburg to compete for bigger sports events, Garcia said: “Absolutely. Sometimes I hear from folks here, we have got the new Valley Metro Transit Terminal going up and EDC is part of the partnership, they are moving their offices there, and I have heard at least one fellow say, why are you doing that. It is a big waste of money, you have just done this new building. It is not a waste of money. You don’t just dream big, you act big, you be big and then you are going to get to where we are today. With that type of mentality, that type of thinking, we would still be the sleepy little town we were 15, 20, years ago.”
Garcia said it is important to publicly thank Sen. Hinojosa, Rep. Canales and the entire Rio Grande Valley legislative delegation for its support of SB 1136. “I cannot begin to say how thankful I am for our senator. He has done so much for our area,” Garcia said.
UTRGV School of Medicine
Garcia said Valley legislators should also be thanked for the funding they helped secure for UT-Rio Grande Valley’s School of Medicine.
“Since we are saying thanks, our medical school funding was in trouble because they were trying to give us $20 million plus, and we requested $70 million. That is what it takes to operate a medical school. I think with our Senator having the position and influence that he has, he was able to negotiate us up to $53.5 million. It keeps us in the game. I think with the way the cities are participating, which we are, we will be okay,” Garcia said.
“My big fear was our medical school might stumble and fall right out of the chute. But, we have bridged that hurdle. We have some wonderful people presenting us in the House of Representatives. We have our local rep that has his offices right at the EDC building, Terry Canales has done a great job for us. Bobby Guerra also. He covers some of our area. We are very grateful for all the help they give us on a daily basis.”
Many Valley cities are hurting right now because less Mexican shoppers are coming to the region. Asked if Edinburg was suffering, Garcia said:
“Fortunately for us, we get a lot of that market but most of our market is local so we have not been affected. However, I will tell you that our presence has grown in Monterrey and Mexico City, through the media, with these new destinations.”
Garcia said he has been asked to participate in private gatherings of Mexican entrepreneurs who have made the Valley home. He said he has been impressed by the enthusiasm of the entrepreneurs.
“It is a gathering of business men and women from Monterrey and Mexico that have homes and a presence in this area and it is a business networking opportunity. You sit down, there are four domino tables and there are four gentlemen at each table. Without revealing too much here, because it is a private gathering, some of the powers that be from McAllen were at the first gathering and at this last gathering it was just us (from Edinburg). It is all about business networking and proposed projects,” Garcia said.
“Mexico is still looking to work with us and I think we are going to see a lot more of that in a bigger way with our city. We now have a customs facility in our city so, that is opening a lot of eyes in Mexico and certainly with the security situation in Mexico, people are looking more and more to have a foot in each country.”
Garcia noted that Edinburg EDC has an office in Monterrey. “We are having a bigger and bigger presence there, through the public media and Facebook. We are in the game.”
Asked if there are any other big projects coming up, Garcia said: “We are looking at a couple of things that I cannot reveal at this stage. I am just so happy to be involved in all the big things that are going on in our region and certainly Edinburg.”
Editor’s Note: The main image accompanying this story shows HEB Park in Edinburg, home of FC Toros. Reporter Apolonio Sandoval, Jr., assisted with this story from Edinburg, Texas.