AUSTIN, TEXAS–Local voters will decide this weekend on expanding the Austin Convention Center, a vote which could be essential to the continued staging of the Semicon/Southwest show here.
Semiconductor Equipment & Materials International (SEMI), the industry trade group which has held its Semicon/Southwest exposition and conference in Austin annually since 1994, is officially neutral on Austin’s Proposition 1, which would increase the local hotel room tax to 15 percent, from 13 percent, to fund a $110 million expansion of the convention center and to provide $25 million for flood containment measures on Waller Creek, the waterway that flows by the convention facility. But the Mountain View, Calif.-based SEMI would clearly be delighted if the measure passes in the special election on Saturday, May 2.
Until recent years, Semicon/Southwest was a biannual show, held in Dallas and alternating with the now-defunct Semicon/East show in Boston. It was first held in Austin in 1992. After SEMI management killed off Semicon/East four years ago, Semicon/Southwest was made an annual event and has proved quite popular with exhibitors and attendees. Too popular, in fact.
“We have a lot of people (exhibitors) who would like to join Semicon/Southwest,” said Rick Heim, SEMI’s VP of operations, who runs the Semicon shows worldwide. But the size of the Austin Convention Center limits the exhibition space, and so a number of potential exhibitors are relegated to a waiting list.
Two More Halls In Plan
Opened in 1992, the convention center presently has 176,200 square feet of meeting space. If Proposition 1 passes, the facility would add two more exhibit halls and a total of another 205,000 square feet of meeting space. The center would expand northward, stretching across what is now Third Street and extending up to Fourth Street. That block of Third, between Trinity and Red River streets, would be closed to traffic, as would the perpendicular Neches Street, between Third and Fourth streets. The existing facility extends south to north from Cesar Chavez Street (First Street) to Third Street.
SEMI is not making any threats about relocating Semicon/Southwest–clearly, the Texas semiconductor industry is now headquartered in Austin, and there is prevailing sentiment to keep the show here. Motorola’s Semiconductor Products sector now makes its headquarters in Austin, shifting last year from Phoenix, and aside from Texas Instruments’ headquarters and wafer fab operations, Dallas has a relative handful of semiconductor companies compared with the capital of Texas. Austin boasts the Motorola complex in Oak Hill, the Sematech and Microelectronics & Computer Technology consortia, Advanced Micro Devices’ huge Fab 25, the new Samsung Austin Semiconductors DRAM fab, the Somerset design center for IBM and Motorola PowerPC microprocessor design and dozens of related businesses. Before the Asian financial crisis took hold in South Korea, LG Semicon was actively considering locating a DRAM fab in the Austin “metroplex,” possibly in the town of Cedar Park. The semiconductor equipment and materials suppliers have followed their customers here, with Applied Materials establishing a major manufacturing center in Austin, and other vendors setting up shop here. Even SEMI has an office in Austin.
So it’s not surprising to learn that Semicon/Southwest will be here this fall, and in 1999, and likely beyond that, too, regardless of the outcome of Saturday’s vote. “We don’t have any intention to move the show,” Mr. Heim said. Last year, SEMI expanded the exhibition into the Palmer Auditorium, a short distance across the Town Lake from the convention center, and kept a steady stream of buses shuttling between the two facilities.
There doesn’t seem to be much local controversy about expanding the convention center. Gwen Spain, public information officer for the Austin Convention & Visitors Bureau, said local environmental groups, such as the Save Our Springs Alliance, have endorsed the measure, chiefly because of the Waller Creek measures. “What’s unusual for Austin is the Chamber (of Commerce) and environmental groups agree,” she added.
Visitors, not residents, will foot the bill for the proposed expansion, and that’s usually a popular play with voters. Voters in San Francisco approved an increase in the hotel room tax two years ago to fund an expansion of the Moscone Center convention facility, which has housed the Semicon/West show annually since 1992.
Semi/West Needs Space
SEMI is facing a similar situation, on a larger scale, with Semicon/West, which has overwhelmed the exhibit capacity of Moscone Center. Last year, SEMI expanded the show to San Jose, some 50 miles south of San Francisco, in order to accommodate the sprawling needs of exhibitors, and will do so again in July. What happens to Semicon/West in 1999 and beyond is up in the air–the show clearly needs a larger exhibit facility, such as the convention centers in Las Vegas and Anaheim, but those cities are hundreds of miles away from Silicon Valley, which is why Semicon/West is in the San Francisco Bay Area in the first place. SEMI may draw in a third Bay Area facility, the Santa Clara Convention Center, to keep up with the exhibition demands of “West.”
Back in Texas, an expansion of the Austin Convention Center will take about two years to complete, so it may be ready for Semicon/Southwest in 2000. Two critical points exist about the convention center: While it is generally regarded as a success in attracting convention business to the city and helping fill the downtown hotels for more than University of Texas home football games, it has yet to bring much visible prosperity to the southeast corner of this rapidly expanding city. Part of the reason is the flooding threat from Waller Creek, known to many conventioneers as the stream which separates the convention center from the highly popular Iron Works barbecue restaurant. Some of the funds created by Proposition 1 will go toward helping funnel storm runoff in the creek down to the Town Lake.
The second critical point is parking. The city bought a 12-story parking structure six years ago to help deal with parking during conventions, but the garage is a two-block walk from the convention center. Proposition 1 doesn’t provide any money toward new parking, but it is possible the city will sell the existing garage, at a substantial profit, and then would have sufficient funds to build a more convenient garage.
Ms. Spain of the local convention and visitors bureau said of the convention center, “The demand is outgrowing the supply.” Many groups looking into the possible booking of the Austin Convention Center wind up doing business with the larger facilities in Dallas, Las Vegas and other cities because the Austin building is too small for their requirements. “We haven’t been able to accommodate some of the groups,” she said. Because meeting planners typically work two to three years in advance, now is a good time to start the Austin expansion, so the facility could start booking bigger events in 2000.
Austin wants to keep and attract high-tech events like Semicon/Southwest because “it’s a real clean industry,” Ms. Spain observed. There’s no heavy demand on local infrastructure, and conventioneers bring lots of money to local hotels, restaurants (it’s very difficult to get into the Iron Works for lunch during Semicon/Southwest week) and Austin’s famous music venues.
She commended Terry Berke, who heads SEMI’s office here, for spearheading efforts to expand the convention center and to accommodate the growing needs of Semicon/Southwest. “He wants (the show) to stay in Austin,” Ms. Spain said. “He has spoken to the City Council and been a leader.”
A bigger convention center may attract one of the bigger hotel chains to put a convention headquarters hotel adjacent to the convention center, Ms. Spain noted, and that may help resolve the parking issue, with a garage facility built into the hotel structure.