HOUSTON (April 1, 2026) – The City of Houston and Houston First Corporation today announced the successful sale of approximately $1.38 billion of Hotel Occupancy Tax and Special Revenue Bonds to fully fund the first phase of the Convention District Transformation Project. Made possible by strong city leadership and Houston’s growing economy, the full financing of this initial phase of the master plan sets the stage for future phases that will further redefine downtown Houston and enhance the city’s position as a top-tier convention and entertainment destination.
The first phase of the transformation project includes GRB South, a new 700,000-square-foot building that will directly connect to the existing George R. Brown Convention Center, as well as a new 100,000-square-foot pedestrian plaza connecting the facility to Toyota Center. Building on the city’s unique layout—boasting three major sports venues within a several-block radius of its convention center, the evolution of the George R. Brown convention center will transform underused blocks into a thriving, walkable district, setting the bar for convention and entertainment-centered development around North America.
“The overall success of this bond sale speaks to the confidence the markets have in Houston as a city moving in the right direction,” said Houston Mayor John Whitmire. “This project has been a priority of mine since I was a state senator, and I’m excited to see it materialize as Mayor and set the tone for what the future of Downtown Houston will become.”
Made possible through the state’s portion of the incremental Hotel Occupancy Tax and special legislation, this project serves as a model for deal structures that can support a project of this size and scope. As authorized by Senate Bill 1057, signed into law in 2023 and authored by then-Senator Whitmire, the project will be funded by the state’s portion of incremental Hotel Occupancy Tax revenue growth within a three-mile radius of the convention center for 30 years, estimated to total roughly $2 billion. This funding mechanism ensures no burden on local taxpayers. But funding construction now requires the sale of bonds that can then be paid off as revenues from the legislation build over time.
Houston First and the City structured the bond financing with three critical objectives: affordability, flexibility, and multiple pathways to access future funding. All three objectives were achieved.
“We could not be more pleased that we have reached this important milestone in this generational project for Houston,” said Michael Heckman, President and CEO of Houston First. “This is a highly complicated and ambitious project, but we have set a standard for how to move an initiative of this scale forward efficiently and effectively and bring it to market.”
The sale is comprised of $149 million of tax-exempt and $52.9 million of taxable Senior Lien revenue refunding bonds, which closed on March 25, 2026, and $1.096 billion of tax-exempt First Lien Revenue and Refunding bonds and $78 million of tax-exempt Second Lien revenue bonds, which closed on April 1, 2026. Bond proceeds will be used to refund existing debt, refund subordinate lien notes outstanding, and provide permanent financing for the transformational George R. Brown expansion.
Importantly, for its senior lien series of bonds (Series A & B), Houston received a full notch upgrade from the rating agency S&P, from A to AA-. This rating upgrade and the over subscription of all four series, reflects the rating agency and institutional investor credit analysts’ vote of confidence in the long-term credit quality of the City of Houston and the strength of its financial leadership.
Despite current market volatility, investor demand for the series was exceptional and led to bond over-subscription, indicating market confidence in the future of the project as well as in the future of Houston. Specifically, the combined four series generated significant investor demand, with 115 different accounts participating, generating over $15.8 billion of priority orders and representing approximately 10.4 times the amount of bonds offered for sale.
To create additional capacity, the City also conducted a tender process to purchase back certain outstanding bonds from bondholders. The City received nearly 480 offers from bondholders during the tender process for a total of roughly $208 million, or 22% of the outstanding principal of the relevant bonds. This level of bondholder participation created cash flow savings during critical ramp-up years and lowered the overall cost of financing the project. The bonds were underwritten through a syndicate led by joint senior managers J.P. Morgan Securities and Ramirez & Co., Inc., which also served as Dealer-Managers for the tender transaction.
“This was the most complex transaction that I have worked on in my 42 years in the bond business,” said Drew Masterson, CEO of Masterson Advisors LLC, which serves as the municipal advisory firm for both the City of Houston and Houston First. “The challenge was that the new revenue stream that the Mayor procured for the project is heavily backloaded over 30 years and we needed $1.14 billion for the project up front. The City and HFC assembled the strongest working group possible because we needed every structuring idea in the book to make this affordable while the revenues grow.”
Designed to attract the leading events in the industry as the most sellable and innovative convention facility in North America, the initial expansion will feature two exhibition halls, flexible indoor/outdoor and atrium space, the largest ballroom in Texas, and dedicated ground-level spaces for retail and restaurants, all designed with inspiration drawn from Houston’s bayous and native prairie landscape. On schedule to open in May 2028, the building’s environmental footprint will be reduced by incorporating low-carbon materials, high-efficiency building systems, and native landscaping in a new expansive living roof, with potential solar integration.
The project team includes global real estate firm Hines as development manager, Populous as architect of record, and Gilbane | Flintco as construction manager under a joint venture.
See and download project renderings here.
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About Houston First Corporation
Houston First Corporation (HFC) is a local government corporation and the destination marketing organization for the country's fourth largest city. In addition to serving as operator for the George R. Brown Convention Center and some of Houston's most prominent art, entertainment, and event venues, HFC is focused on promoting the city's vibrancy and rich tapestry of culture. By harnessing the city's collective energy, ambition, and creativity, including its diverse culinary scene, world-renowned performing arts, medical and space innovation, and elite filming locations, HFC is solidifying Houston as a premier national and global destination. For the latest news and info regarding HFC, visit www.houstonfirst.com.
About Masterson Advisors, LLC
Masterson Advisors, in independent registered municipal advisor, exists to strengthen communities and develop tomorrow’s leaders. Our in-depth experience enables us to equip clients with municipal financing knowledge, analytical support and the confidence to face rating agencies and Wall Street underwriters on equal footing. We serve our clients with the unwavering principles of integrity, humility, collaboration and excellence. From our Partners to our analysts, every member of our team is responsible for upholding these principles and fostering a culture of mutual respect, service, and life-long learning.
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Contact:
Laura Jones
DPWPR
ljones@dpwpr.com
A.J. Mistretta
Houston First Corporation
aj.mistretta@houstonfirst.com
