A Mid 2016 Opening is Planned

June 14, 2013 –The developer of the 50-story, $350 million Fairmont hotel planned for downtown Austin said Friday that the project will break ground in November at Red River Street and East Cesar Chavez.

Developer Doug Manchester, president of Manchester Texas Financial Group, released new details Friday about the project. He also released a new market study highlighting how much convention business Austin is losing annually because it doesn’t have enough hotel rooms downtown, an issue local convention officials and other experts have talked about for years.

With 90,000 square feet of convention and meeting space planned, the 1,035-room Fairmont Austin is expected to help Austin attract additional convention center business and meet pent-up demand, according to a market analysis performed by Hospitality Valuation Services. The analysis was prepared for Manchester Texas Financial Group, the Fairmont’s developer.

From 2006 to 2012, Austin on average lost more than 1.3 million room booking per year “as a result of an overall lack of room supply” downtown, according to the analysis.

Bob Lander, president and CEO of the Austin Convention and Visitors Bureau, said the Fairmont brand “will generate incremental demand for Austin with high-value clientele.”

Lander has often said that a key reason Austin has lost major convention business is because it doesn’t have enough large blocks of rooms in one to three hotels, the industry norm.

Manchester also said the hotel will include 125 high-end Fairmont Gold rooms and a Fairmont Gold lounge — amenities that will set a new high-water mark in Austin’s hospitality industry when it opens in mid-2016.

Fairmont’s Gold rooms function as a “hotel within a hotel,” differentiated by larger room sizes, separate elevators and check-in areas, a lounge and complimentary food and beverage service, among other offerings.

“Everything about this hotel is being designed to embody Austin in an authentic, upscale way,” Doug Manchester said.

Jeff Doane, vice president of hotel sales for Fairmont Hotels & Resorts, said Fairmont Gold’s Austin debut “will enable us to market to a wide range of customers, from high-end corporate to luxury group and leisure as well.”

“Austin is an in-demand market and a city where we are very excited to soon fly the Fairmont flag,” Doane said in a statement. “It is a tremendous destination for convention and meeting business,” which is a key market segment for Fairmont.

The Fairmont Austin will include a signature restaurant and lobby bar lounge, a sky deck with views of Lady Bird Lake and the Capitol and 555 underground parking spaces. The building’s acoustics, lighting and sound will be engineered to support annual SXSW music events.

The hotel is being designed by Gensler Austin. Locally sourced materials will be used on the building’s exterior and the interior, including Texas limestone, granite and walnut and mesquite woods, said Todd Runkle, Gensler’s managing director.

The Fairmont would be the second-tallest building on Austin’s skyline, after the 56-story Austonian, which rises 683 feet. The hotel is expected to create 800 jobs during construction, and about 1,000 permanent jobs after it opens.

The hotel is projected to generate about $6 million a year in hotel occupancy taxes and $4 million in annual property taxes, most of which will go to a special financing district that will help pay for improvements to nearby Waller Creek.

Manchester Texas signed an agreement last year for Fairmont to manage and operate the hotel. Austin would become only the second Texas city to have the prestigious brand, along with Dallas.

In signing the deal with Fairmont, Doug Manchester told the American-Statesman last year that Manchester Texas remained “committed to fulfilling the required equity, and we continue to receive a great deal of interest from financial partners around the globe who are bullish on Austin and this project. We are confident that our alliance with Fairmont will successfully wrap up our financing efforts. “

Manchester on Friday did not provide an update on the project’s financing.

Another convention hotel is currently under construction in downtown Austin, a 1,012-room JW Marriott being developed by Indiana-based White Lodging Services Corp. The 34-story, $300 million Marriott is due to open in 2015.

Austin’s only existing downtown convention hotel, the 800-room Hilton, opened nearly 10 years ago.