Loan Agreement - City of Austin Texas - Maximum Loan Amount $25,000,000

Sep 16, 2026

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Loan Agreement between The City of Austin, Texas (Austin Convention Center Department) as Lender and Austin Convention Enterprises, Inc. as Borrower sets terms for borrowing up to a maximum of $25,000,000.00 to fund debt service shortfalls. The recitals address Texas constitutional and local government authority, background financing of the convention center hotel facilities, planned convention center demolition and expansion timeline, and an anticipated event of default tied to gross operating revenues, which the agreement aims to neutralize through bondholder consent and related funding provisions.

LanguageEnglish

CategoryLetters

FormatPDF

Pages30

Reading Time11 min

AccessFree to download

Definitions and General Provisions

Definitions

LOAN AGREEMENT By and Between THE CITY OF AUSTIN, TEXAS by and through the Austin Convention Center Department, a department and enterprise fund of the City of Austin, Texas (Lender) And AUSTIN CONVENTION ENTERPRISES, INC. a Texas nonprofit Public Facility Corporation (Borrower) Dated as of , 2023 MAXIMUM LOAN AMOUNT: $25,000,000.00 LOAN AGREEMENT THIS LOAN AGREEMENT (Agreement), is entered into as of the date set forth above by and between AUSTIN CONVENTION ENTERPRISES, INC., a Texas nonprofit Public Facility Corporation (Borrower), and THE CITY OF AUSTIN, TEXAS, by and for the benefit of the Austin Convention Center Department, a department and enterprise fund of the City of Austin, Texas (Lender) . RECITALS Whereas, Section 52-a of Article III of the Texas Constitution authorizes the Texas Legislature to provide for the creation of programs and the making of loans and grants of public money for the public purposes of development and diversification of the economy of the state, the elimination of unemployment and underemployment in the state, the stimulation of agricultural innovation, the fostering of the growth of enterprises based on agriculture, or the development or expansion of transportation or commerce in the State; and Whereas, Chapter 380 of the Texas Local Government Code provides that Lender may establish and provide for the administration of one or more programs, including programs for making loans and grants of public money and providing personnel and services of Lender to promote State or local economic development and to stimulate business and commercial activity in the City of Austin (City); and Whereas, Lender has established programs to provide for economic development grants to promote and foster economic development in the City; and Whereas, Borrower previously issued bonds to finance the costs of constructing the convention center headquarters hotel, garage, and supporting facilities operated as the “Hilton Austin Convention Center”(the Hotel), which is immediately adjacent to the Austin Convention Center, located at 500 East Cesar Chavez, Austin, Texas 78701 (the Convention Center); and Whereas, Borrower operates, repairs, and maintains the Hotel for use by convention attendees, among others; and Whereas, in 2017, Borrower issued its $135,340,000 Convention Center Hotel First Tier Revenue Refunding Bonds, Series 2017A and its $59,315,000 Convention Center Hotel Second Tier Revenue Refunding Bonds, Series 2017B (collectively, the Outstanding Bonds); and Whereas, the City intends to expand the Convention Center, which the City currently anticipates will require the closure and demolition of all or a portion of the Convention Center (Demolition); and Whereas, the City currently anticipates Demolition to commence in the second quarter of 2025 and the City currently anticipates the opening of the Expansion (defined below) in the first quarter of 2029 (the time between the commencement of Demolition and opening of the Expansion, the Expansion Period); and Whereas, Section 9.02(n) of the Indenture of Trust (defined below) related to the Outstanding Bonds states that it is an Event of Default (the 9.02(n) Event of Default) if the City closes the Convention Center or changes the use of the Convention Center and a Hotel Consultant (defined in the Indenture of Trust) forecasts such closure or change will have a material adverse effect on Gross Operating Revenues (defined in the Indenture of Trust); and Whereas, the closing and Demolition of the Convention Center for the construction of the Expansion may cause a 9.02(n) Event of Default; and Whereas, the Borrower has, subject to entering into this Agreement (among other conditions), obtained bondholder consent to amend the Indenture of Trust, to provide, among other things, for the funding of Debt Service Shortfalls (as defined in the Indenture of Trust) and to provide that the closing and Demolition of the Convent

FAQs

Who are the parties to the Loan Agreement and what roles do they play?

The City of Austin, Texas, through the Austin Convention Center Department, acts as Lender. Austin Convention Enterprises, Inc. acts as Borrower.

What is the maximum loan amount under the agreement?

The agreement sets a maximum loan amount of $25,000,000.00 for funding debt service shortfalls.

What is the purpose of the loan in relation to the convention center expansion?

The loan is intended to provide funding for any debt service shortfalls arising in connection with the planned demolition and expansion, which could otherwise trigger an event of default.

Sep 16, 2026

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