“Magic Hole”: New film takes hard look at $1.6 billion Austin Convention Center

A new documentary, “The Magic Hole,” critically explores the Austin Convention Center’s coming expansion. The short movie by local filmmaker Steve Mims and Austin Free Press premieres this Monday, Feb. 24. Tickets for the 7:30 pm showing of “The Magic Hole” are free – or $1.6 billion less than the new convention center’s lowest estimated cost. View “The Magic Hole” here.

Mims shot “Magic Hole” in visually arresting black and white, underscored by a staccato orchestra that doesn’t let up during the 20-minute film. Cutting so fast between talking heads, archival news footage, and fleeting steamrollers — it can leave viewers short of breath (watch the trailer).

Nationally recognized convention center expert Heywood Sanders opens the film speaking directly to the camera. “The politics that drives this is the politics of land and development,” he says.” “This business of closing it, demolishing it, and digging out a big hole — It’s jaw droppingly stupid.”

Mims juxtaposes shots of talking heads delivering such admonitions with clips of cheerful local news anchors breezing through the city’s talking points over a sunny soundtrack.

In archival footage, former Austin Tourism Commission Member Bill Bunch grills city council members about advancing a plan with no publicly released budget. “This project was gonna be $1.3 billion four years ago and now they’re still saying $1.3 billion,” Bunch said – raising his voice and arms with incredulity. “Your water utility tells us that construction costs have gone up 100 percent. This is a $3 billion project.” In summation, Bunch warns, “You’re getting scammed!”

In the film Austin Convention Center (ACC) Assistant Director Katy Zamesnik reassures the City Council that, “We’ll have the opportunity to really think about what those spaces are while we’re digging out that big giant hole in downtown.” And so it went. The City Council recently authorized an initial $600 million expenditure to demolish the existing 881,400-square-foot building and replace it with one of almost twice that size. Construction is due to start as early as April.

The ACC did not return calls seeking comment. The offices of Mayor Kirk Watson and all 10 council members either did not respond to inquiries or declined to comment.

“Terrifying” TV

Mims said in an interview that he scoured local television coverage of the issue while making the film. He described the way that TV reporters cheerfully parroted the Austin Convention Center’s talking points without asking tough questions as “terrifying.”

Explaining why he thinks the new convention center will easily cost twice what the city says, Mims notes that the city is expediting the project to finish it for South by Southwest in early 2029.

“If I buy something online and have it delivered to me, a lot of people will ship it for free,” he said. “But if you have to have it by tomorrow, you’ll pay a premium.” Continuing the Amazon analogy, Mims said, “With this convention center, you’ll pay a premium over and over — not just for the materials but in terms of paying overtime for the labor.”

On camera, Bunch tells “Magic Hole” viewers that optimistic ACC projections historically have collided with harsher realities on the ground. Over a black screen with stark white text, the film shows ACC’s projection that its 2000 expansion would boost ACC-related hotel bookings from 150,000 room nights per year to 336,000. The actual numbers peaked at 246,000.

ACC has its explanation for why it doesn’t attract more business. “We currently turn away nearly 50% of the business leads we receive due to size constraints and availability,” its website says. “With an inadequate convention center, we lose out to competitors and, consequently, miss out on millions of dollars for our Austin community,” concurs a Mayor Kirk Watson quote on that site.

Darwinian conventions

“Every city that has a convention center will typically hire an out-of-town consulting firm to do an analysis,” Heywood Sanders, the University of Texas San Antonio professor who wrote the book “Convention Center Follies,” says on camera. “What they typically hear is they need more space.” This triggers a chain reaction, with that convention center – and its competitors – building costly expansions.

Calling convention centers a “money pit,” Austin Tourism Commission Member John Riedie says in the film that the industry entered a terminal decline in the 1990s, with cheaper virtual meetings eating their lunch. In a contracting market, convention centers offer deep discounts to attract customers. Calling it “a race to the bottom,” Bunch tells the council, “They have to give away the space for free.” In the film, a leading supporter of expanding the ACC, Texas Hotel & Lodging Association President Scott Joslove, acknowledged to the City Council that ACC does “cover spaces” when big customers threaten to go to Dallas instead.

No wonder, then, that ACC loses money. From fiscal 2015 through 2021, ACC earned revenues of about $160 million while paying out about $557 million, according to an Austin City Auditor report. ACC covered that deficit with a $391 million infusion of local hotel occupancy taxes. This business model doesn’t attract private investment, “which leaves the tab with taxpayers,” according to a Texas Comptroller report that found convention centers rarely turn a profit.

Dismal math makes the convention center investments akin to supermarkets that advertise “loss-leader” sales on products knowing many customers will buy other stuff. With ACC customers spending money on hotels, restaurants and stores, Mayor Kirk Watson says that expanding the ACC will boost its overall economic impact from $468 million to $750 million a year.

Those big economic projections float in a wider sea of such projections. Last year, ACC’s biggest customer, SXSW, reportedly generated $377 million of economic impact – or 80 percent of ACC’s total impact. That same year, just one film studio, Austin Film Society’s Austin Studios, generated over $2.6 billion in economic impact.

Whose priority?

Riedie argues on camera that Austin spends 72% of its hotel occupancy tax on the convention center, which generates about 1% of Austin’s tourist traffic. He told Austin Free Press, “We have a lot more to do than go to conventions in Austin, yet somehow we’ve gotten suckered into spending all our money on the convention center.”

The film suggests that any expenditure of Austin’s hotel occupancy taxes impose so-called “opportunity costs.” Every dollar spent expanding ACC could be spent instead on other Austin tourism attractions, including the arts, historical preservation, parks, and Rodeo Austin (discussed below). Bunch argues in the film, “That should be money going into the pockets of cultural tourism: live music, the film industry, nature.”

To that point, in 2019 Travis County voters passed a proposition to increase hotel taxes 2 percent to renovate East Austin’s aging Exposition Center. It’s home to Rodeo Austin, which spurs about $77 million of economic impact in just 15 days of each year. At the time, then-Travis County Judge Sarah Eckhardt warned that the county might need to abandon the ailing Expo Center. Yet Austin has claimed those same tax dollars for the Convention Center, creating a local-government rift.

At the time, Travis County Commissioner Jeff Travillion criticized the inequity of spending more than $1 billion in a downtown area with fewer than 20,000 residents while denying funds to an eastside venue serving a population of “more than half a million people.” “We’re denying the expo center the right to grow in a way that would help the city and resolve past pain created by Austin’s history of racial injustice,” Austin Free Press Content Editor Alberta Phillips agreed in an interview.

This isn’t the first Austin City Council film produced by Mims, who said he started making movies at age 12. His short 2023 documentary, “Zilker, Inc.,” zeroed in on a $200 million proposal to install three large parking garages, several bridges, and a 5,000-seat amphitheater in Zilker Park. The film explored how the plan suspiciously looked like a way to maximize Live Nation’s revenues from its annual ACL Fest in that park. Zilker, Inc. attracted 5,000 views within the first 48 hours of its YouTube release on August 2, 2023. Five days later, Mayor Kirk Watson announced that the city would indefinitely pause the project.

“We’re in an ecosystem where people get their news in different ways,” editor Alberta Phillips said, explaining why Austin Free Press asked Mims to make “Magic Hole.” “You’ve got to be able to tell a story in more than one way, one platform.” Mims was a great fit, Phillips said, because he already was “capturing stories so underreported by our media.”

Recalling his Zilker movie, Mims said, “Hopefully this next film will have a similar outcome.”

Get your free tickets to the “The Magic Hole” premiere and panel discussion on Monday, Feb. 24 starting at 7:30 pm.

Alex Chew is a filmmaker and co-founder of the Black Auteur Film Festival. She also runs the writers-first production company Sequence 8. Her next short story will be published in Haunted Reels: Volume 2. Her films can be found on Roku’s Genre TV and sequence8films.com.

Disclosure: Bill Bunch sits on the Austin Free Press advisory board.