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 City's Ownership of 3 Year Old Austin Hilton Hotel Is Paying Off; 
City Attracting Larger Conventions, Able to Favorably Restructure
Convention Center Hotel Revenue Bonds
AUSTIN, Texas - March 21, 2007 - Taking a line from the movie “Field of Dreams” city visionaries in 2001 believed “If you build it they will come.” And, they have been coming to Austin by the hundreds of thousands to have their meetings and conventions because now, with the three-year-old Hilton Austin Hotel, the city has the capacity to host them. 

As a result of the success of the hotel, Austin Convention Enterprises, Inc., which is the city’s entity that owns the Hilton Austin, recently was able to restructure its Convention Center Hotel Revenue Bonds and save taxpayers about $90 million. The city originally issued $245 million in bonds to finance the construction of the 800-room hotel located across 4th Street from the Austin Convention Center. The recent restructuring includes $165 million in first tier revenue refunding bonds and $95 million in second tier bonds, which will be paid off in 21 years instead of 30 years. 

This country was in the midst of a dotcom bust when the final financing package was being developed for a headquarters hotel for the convention center. Consequently, there were concerns and naysayers, but community leaders knew the appeal of their city and stayed focused on the future. The hotel opened its doors to its first guest on December 27, 2003. 

“Austin has a lot to offer visitors, from entertainment to dining to shopping to day trips into the Hill Country. But, we were getting only the smaller meetings and conventions because of our low guestroom inventory,” said Bob Hodge, Director of the Austin Convention Center Department, as well as President of the five-member board that comprises Austin Convention Enterprises and oversees the city’s and bondholders’ investment in the hotel. 

“However, by adding 800 rooms right next to the convention center and only blocks from the core of Austin’s unique personality – 6th Street, the Warehouse District, 2nd Street, SoCo and the Capitol Building – we have been able to attract the larger organizations needing a functional and modern place to meet, such as the Austin Convention Center, as well as an elegant hotel and a fun town,” Mr. Hodge said. 

“The timing happened to be perfect,” said Austin Mayor Will Wynn. “But, it’s more than just 800 additional beds. The Hilton Austin’s management and employees are the reason Austin gets repeat business from these organizations. In its first three years of operation, the hotel has exceeded all of its performance goals in each of those years, and those performance goals include everything from profitability to guest satisfaction, which translates back to profitability.” 

Andy Slater, area vice president for Hilton Hotels Corporation, who also was the general manager of the hotel at its inception and first year of operations, said city leaders knew Austin’s appeal and foresaw it continuing. 

“Progress and exceptional success, such as exhibited by our increasing convention business, requires visionaries with ample courage,” Mr. Slater said. 

The success of the Hilton Austin also means $7.9 million in bed tax for the City of Austin as well as more than $175 million spent in Austin by Hilton Austin guests during the past three years. 

“Downtown Austin businesses easily realize the impact of our expanded convention facilities,” said Bob Lander, President & CEO of the Austin Convention & Visitors Bureau. “The financial results are significant. Having tens of thousands of convention attendees frequenting their restaurants, retail shops and entertainment venues has helped to spur the economic vitality of downtown. The impact of the convention center hotel, in regards to the size and number of conventions that we host, is now front and center to downtown businesses.” 
Michael Graziano, owner of The Home Retreat, a fine home furnishings and linens store located in the 2nd Street Shopping District, said: “Austin’s convention business has brought to the district a steady flow of new customers who have continued their relationship with our store through on-line and phone purchases.” 

Al LoCascio, proprietor of Laredo Cantina, a restaurant and bar in the 2nd Street District, said: “The Hilton Austin has helped my business grow. Every time the hotel is hosting a convention, I can count on my restaurant being full.” 

Chuck Smith, managing partner of Moonshine Patio Bar & Grill, located a block from the Hilton Austin, said: “We love having an 800-room hotel as our neighbor. With its opening, we exceeded all of our business expectations very quickly.” 

“Austin’s attractiveness as a convention destination is growing and we intend to keep them coming back by demonstrating the best of Austin hospitality and enhancing our guests’ experience,” said Doug Gehret, General Manager of the Hilton Austin. 

Hilton manages the Hilton Austin for the owner, Austin Convention Enterprises, Inc. The hotel was built to support the expansion of the Austin Convention Center and to encourage more and bigger convention business for Austin. 

The Hilton Austin, located at 500 E. 4th St., and adjacent to the Austin Convention Center, features Finn & Porter™, an upscale steak, seafood and sushi restaurant (www.finnandporter.com/austin); Liberty Tavern™, a classic American grill; Java Jive On Fifth, a premium coffee outlet; and The Tower Health Club & Spa, a full-service health club featuring spa services. To find out more about the Hilton Austin, please visit our website at www.austin.hilton.com. 

Hilton Hotels Corporation (NYSE:HLT) is the leading global hospitality company, with more than 2,900 hotels and 500,000 rooms in 78 countries and territories, including 105,000 team members worldwide. 

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Contact:

Hilton Hotels Corporation
Ron Dusek, 512-682-2999
ron_dusek@Hilton.com
http://www.hiltonworldwide.com
www.austin.hilton.com

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Also See: Developer FaulknerUSA Incorporated Latest Advances in Design and Construction for 800 room HIlton Austin / December 2003
Dieter Huckestein, President of Hilton Hotel Operations, Joins Austin City Officials to Open the 800 room Hilton Austin / January 2004
With Opening One Year Away, the 800 room Hilton Austin Reports $55 million in Pre-opening Sales Activity / Nov 2002

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