Nov. 28--San Antonio's hotel and motel occupancy tax collections plummeted in October, falling more than 33 percent after the Sept. 11 terrorist attacks greatly harmed the local tourism industry. 

The city collected $1.59 million in taxes for October compared to $2.38 million in October 2000. The figure represents taxes on business conducted in September, San Antonio Convention & Visitors spokesman Joel Williams said. 

The lost revenue not only signifies a decline in tourism, but points to coming problems that the city and county may have in funding agencies or projects. Last year, hotel tax collections totaled $35.8 million; in 1999, collections totaled $34.3 million. 

The occupancy tax, at 16.75 percent, is divided this way: 7 percent goes to city coffers, 2 percent pays for the Convention Center expansion project, 6 percent goes to the state and 1.75 percent is used by the county to make payments on bonds issued to build the SBC Center, a sports arena now under construction. 

Lou Lendman, the city's director of management and budget, said the significant drop in collections is "directly attributable" to the Sept. 11 attacks. "I have not seen it decline in this way before." Siegfried Richter, general manager of the Hilton Palacio del Rio Hotel, said tax collections aren't going to get any better until the second quarter of next year. He said the economy and Sept. 11 have affected his hotel so much that he reduced work hours for almost one-third of his 350 employees. 

"Our business is wounded by 9-11 because of people's reluctance to travel," Richter said. "Revenues are expected to be down through February and they probably won't return to normal until the second quarter of next year." Earlier this month the City Council approved $2 million to go to the tourism bureau's advertising budget to help attract regional visitors. 

Lendman said the city is hopeful that increased advertising will help offset the decline in tax collections. 

County Commissioners also are closely watching the tax collections, since a portion of the money goes for bond payments on the $175 million SBC Center. 

County officials have previously said that with principal and interest, payments would amount to $210 million. 

Bexar County Judge Nelson W. Wolff said the worst case scenario is it would take longer to pay off those bonds than originally planned. The county's bond payments are scheduled over a 20-year period, but county officials have previously said it could be paid off in 13 years. 

"Hopefully the traffic was good over Thanksgiving and we only see a temporary slowdown (in collections)," Wolff said. 

Since the completion of the Convention Center expansion project, there have been signs of a possible upturn in tourism. 

The expansion of the Convention Center has helped to bring new business from large conventions. 

Through 2020, San Antonio now has more than $1 billion in future business from conventions on the books -- groups that require at least 240,000 square feet of space. That business is made possible by the expansion. 

County financial adviser Rebecca Heflin of Dain Rauscher Investment Services in Dallas said there are also safeguards in place should there continue to be declines in tax collections. 

"This (arena) transaction is structured with a tremendous amount of flexibility," Heflin said. 

"There are three reserve funds and bond insurance. I know it will take very sustained downturn in the economy -- and when I say sustained, I mean years -- before the (county) transaction really suffers," she said. "At that point what we will end up with is having to take a longer time to pay if it off." County Commissioner Lyle Larson said the county also collects 5 percent from the 15 percent vehicle rental tax, which is added revenue to pay for the bonds. 

He added that projections that showed the bonds would be paid off in 13 years didn't factor in the construction of new hotels, which will eventually add to the tax-collection revenues. 

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