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MarkDaMan
Jan 19, 2007, 5:00 PM
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-------------------------

Original Post:


Metro plans vote on headquarters hotel
By Jim Redden

The Metro Council will consider early next month whether to take over management of the proposed headquarters hotel across the street from the Oregon Convention Center.

The most recent studies suggest that if the project is going to proceed, it would have to be owned and operated by Metro, and could cost $150 million or more.

The council received a staff briefing on the project Tuesday. At the end of the briefing, Metro staff was directed to prepare a series of recommendations that would authorize the council to take over the project from the Portland Development Commission, which decided it did not have enough money to finance it last year.

“No one on the council has said they either support or oppose the project,” said Ken Ray, Metro’s senior public affairs coordinator. “If the council votes to take over the project, we’ll need to conduct more studies before we can decide how to proceed.”

Before it abandoned the project, the PDC had selected a development team to build a 600-room hotel on two city-owned blocks across from the center, which is at 777 N.E. Martin Luther King Jr. Blvd.

They had proposed building a 23-story Westin hotel on the blocks bordered by Northeast Holladay and Oregon streets and Grand Avenue and Martin Luther King Jr. Boulevard.

Publicly owned hotels have been built near other convention centers in Austin, Texas; Denver; and St. Louis.

A headquarters hotel long has been considered necessary to spur private investments in the convention center urban renewal area. Plans already are under way to build a new Portland Streetcar line through it.

Some downtown hotel owners have opposed the project because they fear it would take business away from them. They have argued that if a hotel is built, it should be smaller and privately owned.

jimredden@portlandtribune.com
http://www.portlandtribune.com/news/story.php?story_id=116915514825223300

pdxtraveler
Jan 19, 2007, 5:15 PM
Sad we have another project lost due to politics. We really needed this. A waste of $100 million on the convention center unless Metro steps up.

pdxstreetcar
Jan 19, 2007, 5:42 PM
I have faith that one will be built eventually. Perhaps the best use of that money would be to plan and begin to implement infrastructure improvements in the Lloyd District to attract and create fertile ground for development there and possibly with it a hotel.

65MAX
Jan 19, 2007, 6:42 PM
In the case of the Convention Center, a hotel WOULD be an infrastructure improvement. It would complement the new streetcar line and spur further development of the surrounding (depressing) area.

pdxstreetcar
Jan 19, 2007, 7:26 PM
I'm thinking more like traffic calming streetscape improvements and maybe add a few small parks/squares particularly in the area a few blocks NW of the Lloyd Center.

tworivers
Jan 19, 2007, 11:43 PM
Uh-oh. Bad fire-station-move memories are returning. It will be even more "too expensive" if they keep studying the idea forever.

EastPDX
Jan 20, 2007, 8:05 AM
... the prior RFProposals from the other interested parties. I was so angry when the Starwood proposal for the block North of OCC was pushed aside in favor of the local Ashford proposal.

Maybe Metro will open the bidding again.

Having the Convention Center HQ Hotel closer to the Rose Quarter makes better sense and the PDC/City owned lots could be sold/leased for other uses.

EP

sirsimon
Jan 20, 2007, 5:53 PM
When I drive through that area (yes, drive, as it is indeed terrible for pedestrians) I am amazed at how poorly executed it is. I think that pdxstreetcar has a solid idea in spending the money to improve the area in general to attract private investors, but 65max has an excellent point in saying that this hotel would add a lot to the area.

I find it remarkable that no private investor has the vision (and daring) to build a signature hotel in this area. Perhaps infrastructure improvements along with some kind of zoning incentives would help?

mhays
Jan 20, 2007, 6:59 PM
Private investors don't do it because the demand isn't there except during big national conventions. You can't have 100% occupancy 1/5 of the time and 40% occupancy the rest. I don't know what the projected numbers are but you get the point.

bvpcvm
Jan 20, 2007, 7:56 PM
besides, isn't the hotel vacancy rate still fairly low? it was a few years ago when they were really talking about this...

PacificNW
Jan 20, 2007, 8:02 PM
I think it should have been apart of the convention center expansion and completed at the same time.....although the Doubletree people implied they would expand only when the convention center did and, guess what? no expansion of the hotel.

PDX City-State
Jan 21, 2007, 7:26 AM
Sad we have another project lost due to politics.

Don't be sad. Local governments should not be in the hotel business. Government should provide planning laws, infrastructure, education, health care, and other basic services. They should offer tax advantages to private companies who build things like hotels--but they should not be developing them.

Urbanpdx
Jan 21, 2007, 5:05 PM
I agree with you PDX City-State, the Govt. should not be in the hotel business. The convention center was a mistake and continuing to follow it with more bad investments is silly. Also, how is it fair to other privately owned hotels that would have to compete with a huge hotel that has no bottom line accountability?

However, on health care, education, and other basic services we probably differ. Government should only provide those services that cannot be provided adequately by the private sector, and which are necessary for the public interest. Government should not provide any services that can be provided adequately by the private sector.

Government monopolies in education, housing and health care can and do result in decreased service and quality. The best quality at the best price is obtained with the most competition. If we decide we need to help out a portion of society with the cost of some things vouchers are better than providing the services. ie. providing food stamps is better than a government operated grocery store. In cases of essential services, such as infrastructure or assistance for the needy, the government should step in if adequate services can't be provided in the private sector. Recipients of government assistance also have a responsibility to help themselves if they are able. Government assistance should aim to get people to the point where they can take care of themselves, if at all possible.

This is probably not worth debating here though.

bvpcvm
Jan 21, 2007, 9:05 PM
This is probably not worth debating here though.

You're absolutely correct.

I hate to say it, but I actually kind of agree about the hotel, though. I think the convention center is totally justifiable, the hotel has some justification, but not enough to convince me that it should be a government project. Better to spend that money on light rail or something.

PDX City-State
Jan 21, 2007, 9:56 PM
I don't debate libertarians anyways--it's like debating with evangelical Christians or token liberals. At the point where ideology becomes the basis of every decision because a person has adopted a basic philosophy that becomes a lens through which they see the entire world--there's no point in discussing anything. It's like talking about science with Pat Robertson or business with Erik Sten. Having said that, welcome back to the forum. I missed your antagonism.

westsider
Jan 22, 2007, 12:40 AM
Yeah, welcome back. It's been too boring the last week or so.

tworivers
Jan 22, 2007, 3:09 AM
Ultimately, I agree that this should not be an entirely "public" project, for all the obvious reasons. On the other hand, the government (at all levels) is at least partially responsible for the dead zone that the district is today.

While we're on the subject, let's change the name to something other than "Lloyd", which brings to my mind the image of a sunburned alcoholic riding around in a golf cart.

Urbanpdx
Jan 22, 2007, 3:35 AM
now that is funny

WonderlandPark
Jan 22, 2007, 4:29 AM
Stupid for the government to be in the hotel business, tax breaks or other incentives to get it done, sure, but financing and building the thing, no way. Gotta go with the "dark side" on this one. :P

PDX City-State
Jan 22, 2007, 4:46 AM
Personally I think the city should have built the Convention Center downtown. Then there would have been more incentive for a developer to build something big. The Lloyd District is hardly prime real estate. (Though I wouldn't mind owning a piece of it.)

westsider
Jan 22, 2007, 8:33 AM
I bet in 20 years the Lloyd district will have the best property on the east side, more than likely it will eventually resemble a spread out SOWA.

MarkDaMan
Feb 9, 2007, 4:27 PM
Metro adopts hotel project
The council, with reservations, votes to take over the convention center hotel from PDC
Friday, February 09, 2007
DYLAN RIVERA
The Oregonian

The Metro regional government took its first step Thursday toward building and owning a $150 million, 600-room convention center hotel.

But even as the Metro Council voted unanimously to take on the hotel, several councilors expressed skepticism and indifference about whether the project, considered a high priority for 18 years by the Portland Development Commission, would ever become a reality.

At a public hearing Thursday, dozens of landowners, business owners and tourism promoters nearly uniformly praised the proposed hotel as a potential savior of the financially weak Oregon Convention Center and the mostly vacant neighborhood around it.

Several councilors said they would not risk Metro's assets on the project. They called for more information on the hotel's financing and cast doubt on the rosy picture painted by proponents.

"The state office building was going to change this area; our initial investment in the convention center was going to change this area," Councilor Carl Hosticka said. "Now we're hearing that the convention center hotel will do it. I'd be happy to be surprised."

The Metro Council on Thursday took over the project from the Portland Development Commission, which had been studying it and soliciting developers to build it. Metro accepted the development team chosen by the PDC, rather than launching its own search for a developer, which staff said could delay construction by two years.

The council also ordered a study by staff and consultants of how the hotel financing should be structured for public ownership. Some councilors said they wanted the study, expected to take three to six months, to include smaller and cheaper hotel options. However, Metro attorney Dan Cooper said he doubted there would be time for that.

Advocates say the hotel, also known as a "headquarters hotel," would enable the Oregon Convention Center to compete for larger gatherings that would bring millions in tourism spending to the region.

Planners of conventions with 3,000 to 4,000 delegates demand the ability to book large blocks of rooms near a convention center. They also want a hotel with meeting space that can support the convention center facilities.

Because such hotels are built with more rooms and meeting space than the private sector would normally build, they are financially perilous and often rely on government subsidy. A study last year indicated a privately owned 400-room, $150 million hotel in Portland would require as much as $79 million in upfront government subsidy.

A group of downtown Portland hotel owners has protested a government subsidy for the project, saying it would undermine their business just across the river.

Local government ownership, though, might make the project eligible for low-interest financing, thus lowering its overall costs, Metro staff have said. That raised the possibility that the city or another agency should consider owning it.

The Portland City Council has balked at the idea of city ownership or subsidy.

PDC President Mark Rosenbaum told the Metro Council that because the regional government owns the convention center, it makes sense that Metro should have oversight of the hotel serving it.

"You give this entire center the greatest opportunity for positive results," he said.

As is usual for the hotel project, the tourism industry offered nearly universal support and urged action.

"Don't get in the trap of endless studies," said Jeff Miller, president and chief executive of the Portland Oregon Visitors Association. Miller is the immediate past general manager of the Metropolitan Exposition Recreation Commission, an arm of Metro that runs the convention center.

Also as usual, an attorney for some downtown hoteliers expressed skepticism and pleaded for more study of a smaller hotel and other ways of subsidizing large conventions.

But councilors said they wanted to pursue some sort of new strategy for a convention center in need of help. Some councilors called for the tourism industry to support a higher hotel-motel tax to ensure financial feasibility for a project that would benefit the industry.

"Who's going to bear the risk if things don't work out as we hope?" said Councilor Robert Liberty. "Is the industry committed to the point they would bear the risk?"

Dylan Rivera: 503-221-8532; dylanrivera@news.oregonian.com

MarkDaMan
Feb 9, 2007, 4:29 PM
Metro adopts hotel project
The council, with reservations, votes to take over the convention center hotel from PDC
Friday, February 09, 2007
DYLAN RIVERA
The Oregonian

The Metro regional government took its first step Thursday toward building and owning a $150 million, 600-room convention center hotel.

But even as the Metro Council voted unanimously to take on the hotel, several councilors expressed skepticism and indifference about whether the project, considered a high priority for 18 years by the Portland Development Commission, would ever become a reality.

At a public hearing Thursday, dozens of landowners, business owners and tourism promoters nearly uniformly praised the proposed hotel as a potential savior of the financially weak Oregon Convention Center and the mostly vacant neighborhood around it.

Several councilors said they would not risk Metro's assets on the project. They called for more information on the hotel's financing and cast doubt on the rosy picture painted by proponents.

"The state office building was going to change this area; our initial investment in the convention center was going to change this area," Councilor Carl Hosticka said. "Now we're hearing that the convention center hotel will do it. I'd be happy to be surprised."

The Metro Council on Thursday took over the project from the Portland Development Commission, which had been studying it and soliciting developers to build it. Metro accepted the development team chosen by the PDC, rather than launching its own search for a developer, which staff said could delay construction by two years.

The council also ordered a study by staff and consultants of how the hotel financing should be structured for public ownership. Some councilors said they wanted the study, expected to take three to six months, to include smaller and cheaper hotel options. However, Metro attorney Dan Cooper said he doubted there would be time for that.

Advocates say the hotel, also known as a "headquarters hotel," would enable the Oregon Convention Center to compete for larger gatherings that would bring millions in tourism spending to the region.

Planners of conventions with 3,000 to 4,000 delegates demand the ability to book large blocks of rooms near a convention center. They also want a hotel with meeting space that can support the convention center facilities.

Because such hotels are built with more rooms and meeting space than the private sector would normally build, they are financially perilous and often rely on government subsidy. A study last year indicated a privately owned 400-room, $150 million hotel in Portland would require as much as $79 million in upfront government subsidy.

A group of downtown Portland hotel owners has protested a government subsidy for the project, saying it would undermine their business just across the river.

Local government ownership, though, might make the project eligible for low-interest financing, thus lowering its overall costs, Metro staff have said. That raised the possibility that the city or another agency should consider owning it.

The Portland City Council has balked at the idea of city ownership or subsidy.

PDC President Mark Rosenbaum told the Metro Council that because the regional government owns the convention center, it makes sense that Metro should have oversight of the hotel serving it.

"You give this entire center the greatest opportunity for positive results," he said.

As is usual for the hotel project, the tourism industry offered nearly universal support and urged action.

"Don't get in the trap of endless studies," said Jeff Miller, president and chief executive of the Portland Oregon Visitors Association. Miller is the immediate past general manager of the Metropolitan Exposition Recreation Commission, an arm of Metro that runs the convention center.

Also as usual, an attorney for some downtown hoteliers expressed skepticism and pleaded for more study of a smaller hotel and other ways of subsidizing large conventions.

But councilors said they wanted to pursue some sort of new strategy for a convention center in need of help. Some councilors called for the tourism industry to support a higher hotel-motel tax to ensure financial feasibility for a project that would benefit the industry.

"Who's going to bear the risk if things don't work out as we hope?" said Councilor Robert Liberty. "Is the industry committed to the point they would bear the risk?"

Dylan Rivera: 503-221-8532; dylanrivera@news.oregonian.com

zilfondel
Feb 9, 2007, 8:12 PM
double post!

mcbaby
Feb 10, 2007, 9:20 AM
lloyd center needs a master plan

Urbanpdx
Feb 10, 2007, 4:48 PM
Sad we have another project lost due to politics. We really needed this. A waste of $100 million on the convention center unless Metro steps up.

Look up the accounting term "sunk costs"

http://en.wikipedia.org/wiki/Sunk_cost

...a rational actor does not let sunk costs influence one's decisions, because doing so would not be assessing a decision exclusively on its own...

sirsimon
Feb 10, 2007, 4:49 PM
mcbaby: "lloyd center needs a master plan"

^ Good call. It is surprising that the city doesn't already have one.

PacificNW
Feb 10, 2007, 7:56 PM
Yup, the Lloyd Center area could use some more planning but I think maybe the downtown "powers" want to focus on making the west side of the river very strong before pushing for more development in the Lloyd area..I am probably wrong. I know they got kicked in the pants years ago (60's) when the center was constructed. Many felt, at the time, the nail had been driven into the coffin of downtown PDX.

tworivers
Feb 11, 2007, 1:02 AM
"lloyd center needs a master plan"

It's called Lloyd Crossing, an award-winning long-term sustainable dvlpt plan. Pretty close to a master plan, I think. Look on the PDC (or maybe Metro) website, it's on there somewhere. The link has also been posted on this forum several times.

I still think they should change the name to something a little sexier.

PDX City-State
Feb 11, 2007, 5:22 AM
The Lloyd Center doesn't need a damn thing that it doesn't already have. What it needs is time. A lot of the property owners over there have very deep pockets--I'm sure they'd love city help; but they don't need it. Then again, the PDC has never feared paying off its big developer friends in the past.

PacificNW
Feb 11, 2007, 5:44 AM
↑I tend to agree. Plus, those super blocks over there could support more than one slim condo tower per block and office towers could be huge (if the future zoning permitted).

MarkDaMan
Feb 12, 2007, 4:40 PM
^check out the Lloyd Crossing plan. It is ambitiously green, and already award winning even though it isn't expected to be completed before 2050. I can only hope with help from the PDC, that it will come to fruition sooner. The Lloyd would be forever changed in a very good way!

http://www.pdc.us/pubs/inv_detail.asp?id=332&ty=17

MarkDaMan
Feb 12, 2007, 4:51 PM
some renderings of the project

http://www.aia.org/aiarchitect/thisweek05/tw0422/0422cote_11lloyd_b.jpg

http://archrecord.construction.com/resources/images/0511greenmarket1.jpg

http://www.metropolismag.com/webimages/1510/sustainablestrat_t.jpg

tworivers
Feb 13, 2007, 1:27 AM
Oregonian editorial today:

New hope for an old idea
Should Metro shoulder the headquarters hotel? If it pencils out, then yes, there's a real logic in the idea
Monday, February 12, 2007

T he Metro regional government has always done a hodgepodge of jobs, from overseeing recycling to purchasing open space. Some of its assignments are plum ones, to be sure, even if somewhat miscellaneous, such as running the Oregon Zoo.

To be perfectly frank, however, Metro also has gotten saddled over the years with some jobs that just needed doing, jobs no one else was keen to do. When the idea first emerged that the regional government might oversee construction of a headquarters hotel, it definitely fell into the second category. No one else wanted the job.

In this case, though, the real question for most people is whether the job needs doing. We continue to think that the $150 million, 600-room hotel still needs to be built, if there's any way to get it done. The Metro Council made a good call last week when it voted unanimously to at least explore the idea a little further.

True, skepticism is rampant, even on the council. And the hotel project would have to overcome many hurdles. There's no question it was daunting last year when a Portland Development Commission analysis concluded that a $79 million public subsidy and public ownership could be required.

But building a headquarters hotel has been in the city's plans for nearly two decades. And it remains vital to boosting the city's tourism revenues. For anyone who has already been to Portland, it's not a hard sell to convince them to return, and to bring a convention here. It's not hard, that is, except for the lack of a big hotel adjacent to the convention center. That's often a deal breaker. Convention organizers expect it and need it to reserve big blocks of rooms.

Although the idea of Metro overseeing the hotel's construction might have seemed, at first glance, farfetched, it's not in the least. There would be a real logic to it, and actually more so than with some of Metro's assignments. The reason? Metro runs the Oregon Convention Center.

The Metro Council is far from sure that it would be wise to pursue the project. But it was wise, and smart for the region, that the council voted to explore the prospect. Clearly, Metro councilors are far from sold; all the more reason that they deserve praise for entertaining the idea.

Portland will have them to thank, if the hotel gets built and winds up entertaining big conventions and happy tourists with money to spend in Portland.

Dougall5505
Feb 13, 2007, 3:14 AM
If this cc hotel gets built Portland would have almost a sure shot at getting the NBA all-star game. The commisioner David Stern has said that Portland does not have enough hotel rooms but with the cc hotel, the nines at the new macy's, and a future hotel at sowa he would have no reason not to let Portland host the all-star game. The game would be a huge boost to our economy and would showcase out great city.

pdxman
Feb 13, 2007, 3:23 AM
Aside from the obvious financial questions about the CC Hotel, i really think getting this hotel built, and built fast should be a priority. If conventions are passing us up because of the no-hotel issue--then something needs to be done quickly. Every year that passes us by is another 5+ conventions that pass the portland area by.

westsider
Feb 13, 2007, 6:43 AM
Mark, exactly what cross streets are we looking at in those renderings, is that east-west street between the two blue buildings Multnomah?

PDX City-State
Feb 13, 2007, 7:01 AM
The Lloyd Center area will be far denser than these photos by the year 2050. I think Portlanders will be shocked at the amount of development in the next 20 years.

pdxman
Feb 13, 2007, 7:09 AM
Maybe i'm just missing something, but why is it going to take so long to accomplish that development? Is he waiting for something?

65MAX
Feb 13, 2007, 8:30 AM
Mark, exactly what cross streets are we looking at in those renderings, is that east-west street between the two blue buildings Multnomah?

That view is looking NE. Holladay is the street with the red line down the middle (presumably denoting MAX) at the bottom right corner. Multnomah is two blocks north of that, in front of both blue buildings and the new park.

Dougall5505
Feb 17, 2007, 9:23 PM
here is a quote from a update on the convention center urvan renewal update by pdc:


Bee Car Rental Disposition

In December, PDC received three responses to a request for interest (RFI) for the Bee Car Rental Property at 84 NE Weidler St. Much less demanding than a request for proposals (RFP), the Bee Car RFI requested only basic information from potential developers. Developers were required to propose an “active” use and a minimum 30,000 square foot building(s). Otherwise potential developers were given broad leeway in proposing a use/building.

Of the three proposals received, one was for a 14-story mixed-use building, another for a restaurant and/or hotel, and the third for a 2-3 story office building.

Given the limited information required by the RFI and the varied development concepts proposed, PDC staff has recommended continuing the solicitation process by issuing an RFP. In addition to the information required by the RFI, potential development teams will provide a conceptual budget, details on team qualifications, and several drawings/renderings of the new building(s). The RFP will be open to all qualified development teams and is expected to be issued Tuesday, February 13, 2007. Teams will have until April 3, 2007 to respond. Those interested in the RFP should check www.pdc.us/bee for additional information about the solicitation, along with a factsheet to tell you more about this project.

zilfondel
Feb 19, 2007, 5:06 PM
Darn, no proposals for a parking lot? Sounds like they're pushing the envelope here!! /sarcasm

MarkDaMan
Mar 6, 2007, 5:26 PM
Who will pay for HQ hotel?
BACKSTORY: Sides debate worth, funding of a facility near convention center
By Jim Redden
The Portland Tribune, Mar 6, 2007

East Bank Saloon co-owner Connie Hunt always knows when a big event is being held at the Oregon Convention Center.

Even though the center is more than a dozen blocks from the restaurant Hunt and her husband, Robert “Pudgy” Hunt, own at 727 S.E. Grand Ave., lunchtime business always doubles when a convention is in town.

“I can tell the minute I walk in the door,” she said.

For that reason, Hunt supports the construction of a 600-room headquarters hotel on two blocks across the street from the center, which is located at 777 N.E. Martin Luther King Jr. Blvd.

Her position is shared by a coalition of regional business owners and area residents, including some who are not actively involved in the tourism industry. They believe such a hotel would attract more than a dozen new conventions to Portland a year, contributing more than $100 million annually to the regional economy.

Metro, the regional government that owns the center, currently is considering building such a publicly owned hotel on that site. It could cost $160 million or more — including the donation of the two blocks that were purchased several years ago by the Portland Development Commission for almost $12 million.

Regional Hilton Hotel executive Brad Hutton also believes a hotel should be built across from the center. But Hutton — joined by a coalition of other regional hotel owners and operators — favors a smaller hotel built and owned by a private developer. They worry that if the publicly owned hotel does not succeed, area taxpayers will be forced to bail it out.

“We believe that something in the way of a hotel next to the convention center needs to happen, but we are concerned about the size and scope of what is being asked for, in terms of the current headquarters hotel proposal,” Hutton said.

Hutton and the others are not completely against the public subsidizing the project. They believe the PDC might still need to donate the land and pay for some road improvements for it to happen. The PDC has set aside $3.7 million in next year’s budget that could be spent on the project.

“Given the market, the support could include favorable terms on the land and some assistance with the infrastructure improvements that will be required,” he said.
Public contribution debated

The two sides are battling before Metro with dueling studies on the benefits and shortcomings of other headquarters hotels in the country. But some of the region’s residents are opposed to any amount of public money going into such a project.

The Cascade Policy Institute, a free-enterprise think tank based in the Tigard area, argues that tax money should not be spent on projects that compete against private businesses. The CPI also believes all regional taxpayers could be on the hook if the project fails to pay for itself.

“There should be no public subsidy in the hotel. If it’s worth doing, the private sector should do it. As a taxpayer, I don’t want my money going down in flames in a bad investment,” CPI director John Charles said.

The public already has invested more than $200 million in the construction of the center — $90 million for the first phase that opened in 1989 and $116 million for the expansion that opened in 2003.

The public funds include $65 million in bonds backed by property taxes and $111 million in bonds backed by hotel, motel and rental-car taxes. Paid mostly by visitors from outside the region, hotel, motel and rental car taxes also are supplementing the operation and marketing of the center to the tune of more than $5 million a year.

The Metro Council formally voted to consider the project Feb. 8. It appropriated $250,000 to the Metropolitan Exposition Recreation Commission, the multijurisdictional agency that operates the center, to study how much a 600-room hotel would cost and how to finance it.

“We are very skeptical about whether such a project will pencil out, but we are willing to take a serious look at it,” said Metro Councilor Rod Park, who was assigned to oversee the research.

According to Park, if the council decides against the hotel project, it still must do something about the center’s finances. Without new revenue, the operating budget deficit is projected to grow from about $300,000 last year to approximately $1.5 million by 2014.

“We’re not going to allow that to happen,” Park said.

The council hopes to make a final decision on the hotel by the end of the year.
Center built with lottery, bonds

The Oregon Convention Center is not a traditional infrastructure project like a road, a bridge or even a public office building. The center was built as an economic development project, a facility designed to attract new people to the metropolitan area — people who boost the economy by spending money at area businesses.

State voters made economic development a government priority in November 1984 when they overwhelmingly passed a constitutional amendment to create the Oregon Lottery with its profits earmarked “to create jobs and further economic development.”

Voters in Multnomah, Clackamas and Washington counties approved a $65 million bond sale to fund the center two years later. The Oregon Lottery contributed $15 million to the project, with the balance coming from bonds and a Local Improvement District in the area.

Tricounty voters defeated a bond measure to expand the center in November 1998.

Former Mayor Vera Katz subsequently persuaded Metro and Multnomah County officials to support a 12.5 percent hotel, motel and rental-vehicle tax to support the expansion and a number of other projects, including paying for bonds issued in 2001 to support remodeling the Portland Center for the Performing Arts and PGE Park.

“The center is a loss leader. It was never intended to pay for itself. It was always meant to bring people into the area who would spend money here,” said Brian McCartin, executive vice president of sales and marketing for the Portland Oregon Visitors Association.
Not your average hotel

The arguments in support of the bond measure in the November 1998 Voters Pamphlet were, in fact, silent on the issue of the center’s operating deficit. But a May 2006 study commissioned by MERC found that the center has generated more than $6 billion in convention-related spending in the region since 1990, including $185 million in state and local tax revenues.

The study, conducted by the KPMG financial management firm, found the center contributed more than $500 million to the regional economy in 2005 alone, the most recent year for which figures are available.

Although Hutton accepts these figures, Charles suggests they were inflated because the study was financed by the center’s operators.

But POVA argues the center would contribute even more to the regional economy if a headquarters hotel is built across the street. According to POVA officials, the center could attract up to 17 more conventions a year with such a hotel — increasing the number from 36 in 2005 to 53 by 2014.

A headquarters hotel is not a conventional hotel. Within the tourism industry, the term denotes a hotel with special features that allow it to be used in conjunction with large meetings, including additional suites, extra meeting rooms that can be configured to accommodate different-size gatherings, and more than one restaurant and lounge.

The idea is that when a convention books the center, the organization’s leadership and exhibitors will be based at the hotel, filling the suites and using the meeting rooms for executive sessions.

POVA also believes that in order for the headquarters hotel to work in Portland, it must include at least 600 rooms so that a 500-room block can be reserved by convention organizers. The rest of the conventiongoers — who can number in the thousands — will be booked at other hotels in and around downtown and the Lloyd District.
PDC bought the blocks

The PDC originally thought that a privately owned hotel could be built with limited public subsidies — primarily the donation of the land and $4 million in urban renewal funds — on two blocks it owns across the street from the center.

The agency bought the blocks between 2001 and 2005 for more than $11.8 million. Two of the properties were acquired through condemnation. With the court setting the prices, the PDC paid more than $6.6 million for them.

The third piece was bought from real estate developer Barry Menashe for more than $5.2 million after the PDC threatened to condemn the property. Today, Menashe is still bitter about what he views as a forced sale.

“They took my property and treated me badly,” Menashe said.

After buying the property, the PDC got so far as selecting a development team for the project. It selected the Ashforth Pacific development company and Garfield-Traub Development of Dallas to build a Westin Hotel on the site.

But after the team was chosen, new cost estimates suggested that a much larger public subsidy would be required. When the gap grew to more than $87 million in July 2006, the City Council decided that a privately owned hotel was not feasible. In response, Metro agreed to consider building a publicly owned hotel on the site.

The debate involves more than the future of the two PDC-owned blocks, however. After voters approved the Convention Center bond sale in 1986, the council created the Oregon Convention Center Urban Renewal Area three years later.

A master plan approved by the PDC calls for the creation of a “bright lights” district with new housing, restaurants and entertainment facilities. Although the PDC currently is negotiating with some area property owners on future projects, much of the work is stalled until the hotel question is settled.
POVA, PBA express support

Many regional business owners favor continued study of a publicly financed headquarters hotel, including some who are not directly involved in the tourism industry.

When Metro considered the issue Feb. 8, testimony and letters in support of the project came from POVA, the nonprofit organization that represents 1,100 tourism-related businesses and helps book most of the conventions at the center; the Portland Business Alliance, the advocacy organization that represents many downtown businesses; and the Oregon Association of Minority Entrepreneurs, who represents minority-owned business in the region.

“In order to maximize investment in the Oregon Convention Center, a headquarters hotel must be constructed. This will help prevent the loss of future business to Portland, benefiting the community at large and the economy in the long-term,” PBA President and Chief Executive Officer Sandra McDonough wrote.

Project supporters also included many businesses owners and neighbors in the Lloyd District, the retail and residential area located east of the center between the Willamette River and Northeast 16th Avenue, and between Northeast Broadway and Interstate 84.

“The need for, and the commitment to, a Convention Center Hotel have been in place in this community for at least 20 years,” wrote Clinton Shultz, chairman of the Lloyd District Community Association, which represents both area businesses and residents.

Those supporting the construction of a smaller hotel include existing hotel owners and operators throughout the region, including the Tri-County Lodging Association, which has gone on record supporting a 400-room hotel with minimal public subsidy.

Others favoring the smaller, privately owned hotel include the regional Hilton Hotel executive Brad Hutton and members of the Aspen Group, which owns the Governor Hotel, Hotel deLuxe and the Portland Paramount Hotel.
Other cities give examples

More than two dozen cities already have such hotels near their convention centers. From 1991 to 2003, most were privately owned and publicly subsidized. Since then, the trend has been for publicly owned hotels. Over the past four years, publicly owned headquarters hotels with 600 or more rooms have opened in Austin, Texas; Denver; Houston; Omaha, Neb.; and Myrtle Beach, S.C.

The two sides disagree over how many of these cities are comparable to Portland and how well their hotels have performed.

Both sides agree that the hotels in Omaha and Myrtle Beach have not lived up to expectations. But the PDC notes that the Omaha hotel has only 450 rooms, not the 600 it considers necessary for success. The PDC also responds that Myrtle Beach is a seasonal beach resort, unlike Portland.

Of the other hotels, PDC figures show that total hotel bookings in Austin, Denver and Houston increased in the years after their headquarters hotels opened.

“Although bookings at other hotels tend to drop the first year the new headquarters hotels open, they increase in all following years,” said PDC development manager Fred Wearn.

The other side argues that — contrary to early promises — few new conventions have been booked into either Austin or Houston. And they say it is too early to tell whether Denver’s hotel is a success because it only opened in December 2005.

“Supporters of headquarters hotels have consistently overstated their potential,” said Portland attorney Tim Ramis, who has been hired by Hutton and some of the other opponents of the public-ownership plan to represent them.

According to Hutton, the mixed results mean Metro should have a Plan B that includes building a smaller hotel near the center with less public support and helping other Portland hotels upgrade hundreds of existing rooms to create the large block of high-end rooms that meeting planners say are necessary to attract more conventions.

“We think that’s a reasonable approach at this time,” Hutton said.

The CPI’s Charles is opposed to spending any more public money in support of the center, however.

“There’s never going to be an end to it. First it was build the Oregon Convention Center, then it was expand the center, now it’s build a hotel, next it will be something else. What they should do is let the market decide what to do there,” Charles said.

jimredden@portlandtribune.com
http://www.portlandtribune.com/news/story.php?story_id=117313606780921900

65MAX
Mar 6, 2007, 6:18 PM
Since when is John Charles an expert on hotel operations. Why the hell are they quoting him anyway? Because he's the only idiot they could find to give a dissenting opinion? This is a no brainer, HQ Hotel = hundreds of millions of new tourist dollars. How hard is that to understand?

MarkDaMan
Mar 6, 2007, 6:54 PM
^because the Tribune seems to be in bed with the CPI. I seem to see Bog and the CPI quoted in every few Tribune articles. In fact, Jim Karlock's recording of a town hall meeting in Lake O actually made the news in today's edition of the PORTLAND Tribune.

Pamplin is a big time Conservative...he's probably using the only people he can find to help push his agenda in print.

cab
Mar 6, 2007, 7:16 PM
The East Bank Saloon was a big supporter of anti-tax Anti-subsidy activist Ted Piccolo when he ran for city council. Typical when a public subsidy helps them personally they are all for it. Remindes me of Dwight James at the Tribune railing against MAX lines and then turning around and being all for the public subsidy for the baseball stadium.

Urbanpdx
Mar 6, 2007, 9:42 PM
Or you guys who like to look at pretty buildings or ride trains that someone else pays for.

:cheers:

mhays
Mar 6, 2007, 9:45 PM
Arguing for smart public investment is not the same as being self-serving.

MarkDaMan
Mar 6, 2007, 10:35 PM
Or you guys who like to look at pretty buildings or ride trains that someone else pays for.

seriously urbanpdx, knock this crap off, it's unnecessary here.

brandonpdx
Mar 6, 2007, 10:55 PM
Or you guys who like to look at pretty buildings or ride trains that someone else pays for.

:cheers:

Or you guys that like to drive on roads and pollute the air that we all pay for.

:cheers:

Urbanpdx
Mar 7, 2007, 2:10 AM
Arguing for smart public investment is not the same as being self-serving.

I'll let Charles know, I don't think he is self-serving either.

65MAX
Mar 7, 2007, 6:14 AM
<cough>
don't feed the troll
<cough>

westsider
Mar 7, 2007, 5:47 PM
Or you guys that like to drive on roads and pollute the air that we all pay for.

:cheers:


WE all pay for roads, we all pay for rail, the difference is that everyone uses the roads. In my 24 years in Portland I've been on MAX or a bus maybe 15-20 times, mostly to go 10 blocks or less downtown when I didn't feel like walking.

MarkDaMan
Mar 7, 2007, 6:26 PM
^too bad for you. Seems like if you are paying for it, you might take better advantage of it.

PacificNW
Mar 7, 2007, 6:42 PM
I deleted my response 'cause I was being mean spirited. :)

zilfondel
Mar 7, 2007, 8:50 PM
Geez, I usually walk around 3-4 miles per day. Nice benefit to being in downtown: I don't have to spend time looking for parking. Did I mention I don't have to go to the gym?

Urbanpdx
Mar 8, 2007, 12:26 AM
Geez, I usually walk around 3-4 miles per day. Nice benefit to being in downtown: I don't have to spend time looking for parking. Did I mention I don't have to go to the gym?

I too take advantage of the urban environment for walking but I am told that we still need to lift weights to keep bone density, etc. I hate the gym but will try to start going...again!

65MAX
Mar 8, 2007, 6:30 AM
WE all pay for roads, we all pay for rail, the difference is that everyone uses the roads. In my 24 years in Portland I've been on MAX or a bus maybe 15-20 times, mostly to go 10 blocks or less downtown when I didn't feel like walking.

This REALLY is a tired argument. If rail went everywhere that roads went, you'd use rail too. You've already admitted that you used transit when it was convenient for you. You don't think you'd use MAX if it was more convenient than driving?

The other problem with your argument is we all use roads, but we don't all use EVERY road. So since I live on the westside, why should I have to pay for improvements to Sandy and Hawthorne? I don't use them, right?

westsider
Mar 9, 2007, 12:55 AM
This REALLY is a tired argument. If rail went everywhere that roads went, you'd use rail too. You've already admitted that you used transit when it was convenient for you. You don't think you'd use MAX if it was more convenient than driving?

The other problem with your argument is we all use roads, but we don't all use EVERY road. So since I live on the westside, why should I have to pay for improvements to Sandy and Hawthorne? I don't use them, right?


I do, I live on the westside and I drive on sandy and hawthorne all the time. I also drive in Gresham, Lake O, West Linn, Sherwood and many other places that have rail and bus service that I choose not to use because it takes twice as long (or longer) to get there.

65MAX
Mar 9, 2007, 2:57 AM
Great, so you pay for those transportation facilities, and I'll pay for the ones I use.

MarkDaMan
Mar 20, 2007, 3:17 PM
Council to eye hotel
Plans not yet firm, but some already fear a ballooning budget
By Jim Redden
The Portland Tribune

Ownership has yet to be determined for a possible headquarters hotel on land owned by the Portland Development Commission across the street from the Oregon Convention Center.

Although Metro still is studying whether to build a publicly owned hotel across the street from the Oregon Convention Center, the City Council will soon be asked to authorize the Portland Development Commission to contribute $11.85 million worth of land and $4 million in urban renewal funds to the project.

On Wednesday the PDC board of directors voted to ask the council to authorize the contributions by amending the Oregon Convention Center Urban Renewal Plan, which governs the urban renewal district around the center. The Portland Planning Commission is scheduled to consider the amendment Thursday, after which it would be submitted to the council for approval in May.

PDC project manager Fred Wearn said council authorization was necessary to allow Metro to complete its analysis of the project and is not legally binding on the city. Wearn said if Metro agrees to build such a hotel, both the PDC board and the council will need to formally approve the agency’s contribution again.

“We would go back to both the PDC (board)and City Council before spending capital dollars or releasing the land,” Wearn said.

At least one critic of the potential project believes the council should withhold any commitment until the details of the project are known, however.

“This is a rush to judgment before all the information is available,” said Len Bergstein, a political consultant retained by a number of Portland-area hotel owners and operators.

Bergstein compares the authorization request to the early phases of the Portland Aerial Tram, whose budget grew from around $15 million to more than $58 million after the council first authorized it. Last week Mayor Tom Potter announced he was commissioning an outside audit of that project to understand why the costs increased so much.

“Metro hasn’t completed its financial analysis yet. Why not wait until the details are known?” Bergstein asked.

The project under consideration is known within the convention industry as a “headquarters hotel.” It would include 600 rooms and such special features as extra suites and meeting rooms that can be configured for groups of different sizes. The Portland Oregon Visitors Association argues that such a hotel would bring more than a dozen additional conventions to town, pumping millions of dollars into the regional economy.

The PDC – the city’s urban renewal agency – has long supported the construction of a headquarters hotel on two blocks it owns along Northeast Martin Luther King Jr. Boulevard across the street from the center.

It had considered contributing the land and up to $4 million in urban renewal funds to a privately owned hotel until late last year, when internal studies showed that the project would require more than $80 million in public support. Total costs were estimated at more than $150 million.

At the direction of the City Council, the PDC then asked Metro to consider building the hotel as a public project. The elected Metro Council voted to consider the project in February and appropriated $250,000 to the Metropolitan Exposition Recreation Commission – which operates the convention center – for more study.

MERC is recruiting consultants to prepare an economic analysis and potential financing package for the Metro Council to consider this summer. Options to be considered include using lodging taxes generated by the hotel to finance construction bonds issued by Metro.

“The council won’t proceed unless a financial package is in place that will protect the public,” said Ken Ray, Metro’s senior public-affairs coordinator.

Bergstein’s clients argue that a 600-room hotel is financially risky. They favor the construction of a smaller, privately owned hotel on the same site, although they say the PDC may still need to donate the land and urban renewal funds to make it happen.

jimredden@portlandtribune.com
http://www.portlandtribune.com/news/story.php?story_id=117434212234434800

PDX City-State
Mar 20, 2007, 3:33 PM
Plans not yet firm, but some already fear a ballooning budget

As they should

tworivers
Apr 10, 2007, 11:41 PM
In Lloyd District, let's aim high
MY VIEW • The convention center area is all some visitors see

By Christopher LoNigro
Apr 6, 2007

There are thousands of people every week flowing in and out of the Oregon Convention Center area like the tide … from the Barbershop Quartet international convention to the Portland International Auto Show.

While in town, the majority of these conventioneers never leave the Lloyd District. They stay scattered about in various hotels spending free time at the Lloyd Center shopping or catching a movie.

The adventurous head downtown to see and experience what Portland has to offer, but ultimately, they are here for a convention, not vacation. In addition to the conventiongoers, many travelers experience the Lloyd District via MAX before entering the central city.

The overall perception from Portlanders and visitors alike is that the Lloyd District, specifically the immediate area around the convention center, lacks an identity or a sense of place. It is an urban collage of surface parking lots, hotels with hidden entrances, seemingly abandoned buildings, gravel-filled lots and fast-food joints creating a pedestrian experience that is truly unfriendly.

The Portland Development Commission, Metro and the city of Portland have initiated immense infrastructure improvements in the district, but a predominant element is still missing.

Metro has taken the understandably controversial first steps toward building a 600-room hotel across the street from the convention center.

However, the questions should go beyond the financing of the proposed headquarters hotel. The questions should be how to organize the Lloyd District while welcoming the rest of the world to the city of Portland and the state of Oregon.

All of the proposed urban projects for the area – including the headquarters hotel, the east-side streetcar, the award-winning Lloyd Crossing and the Oregon Convention Center Blocks – could and should be revolutionary.

By creating a sustainable and vibrant district through implementation of these projects, visitors would receive a remarkable first experience of Portland.

The headquarters hotel will become the catalyst project igniting all other projects on the many underutilized properties in the district. It will provide a focal point between the Lloyd Center and the Rose Quarter, organizing and connecting the various elements of the district.

One of the key elements is the Martin Luther King Jr. Boulevard-Grand Avenue corridor, which will be transformed by the addition of a better pedestrian environment, new local restaurants and retailers featuring local wares.

For the hotel to be truly successful, the Lloyd District landowners must improve their partnerships and make the countless planning studies come to fruition. They must be willing to replace the many underutilized properties with the proposed urban projects.

All of these projects, including the hotel, are contingent upon one another’s success.

The issue is not solely about financing the construction and operation of the hotel, but rather the economic and development potential it should provide. Metro, the Portland Oregon Visitors Association and other various organizations must fulfill their promises of attracting bigger and more diverse conventions.

If they aim higher and succeed beyond expectations, the headquarters hotel will be successful on its own.

Ultimately, this success will help the overall hospitality industry grow, create jobs and enhance the regional economy.

Portland has a tremendous amount to offer with immense potential for residents and visitors alike. Whether people are here for a convention, vacation, business or as residents, that potential needs to be exposed at Portland’s front door.

Chris LoNigro is a designer at DiLoreto Architecture and has been active in developmental planning within the Lloyd District, where he lives.

PacificNW
Apr 11, 2007, 1:56 AM
I agree, completely, with this guy....

Drmyeyes
Apr 11, 2007, 6:54 AM
"All of the proposed urban projects for the area – including the headquarters hotel, the east-side streetcar, the award-winning Lloyd Crossing and the Oregon Convention Center Blocks – could and should be revolutionary." excerpt from Christopher LoNigro's article

Yes, but he's not volunteering much in terms of suggestions of how to do this. Uncertainty about what will make convention activity gel with areas outside of the Rose Quarter/Oregon Convention Center Blocks has been the stumbling block for years.

"The overall perception from Portlanders and visitors alike is that the Lloyd District, specifically the immediate area around the convention center, lacks an identity or a sense of place. It is an urban collage of surface parking lots, hotels with hidden entrances, seemingly abandoned buildings, gravel-filled lots and fast-food joints creating a pedestrian experience that is truly unfriendly.

The Portland Development Commission, Metro and the city of Portland have initiated immense infrastructure improvements in the district, but a predominant element is still missing." Christopher LoNigro

He goes on from there and mentions the proposed convention hotel as a first step. Really helpful would be to offer some realistic suggestions of how to counter "a pedestrian experience that is truly unfriendly.". MLK, Burnside, Weidler are all very high volume auto streets. Needed, are ideas in addition to the streetcar that would help the area to be more pedestrian friendly. All successful ideas would probably depend upon a reduction in auto traffic volume where it's presently in proximity to pedestrians. And we know how popular that idea is. So far, a lot seems to be riding on hopes for the couplet and the eastside streetcar.

Really examining what "pedestrian friendly" means for this area is very important. Right off the top of my head, to me, this means pedestrian specific connectivity. between the convention center blocks and the outlying areas they want to benefit from convention business. Right now, there really isn't any. Riding the MAX is fine, but walking from the convention center anywhere is for the hardy. More clearly defined pedestrian routes equipped with more easily accomplished crossings over the busy thoroughfares could really help.

I think business in general will continue to be slow to gamble on this convention hotel. Downtown has stressed out about it for years. All those conventioneers having a fine time at the all bases covered hotel...what's to get them over the river to downtown to spend money?

Also, the convention business is a very competitive, high risk industry. It's big money, all upwardly mobile cities want them, but it's highly dependent on transportation, i.e. flying. Once you got the machine running, if the conventions aren't coming in, its big trouble.

Snowden352
Apr 11, 2007, 5:45 PM
At issue, for me, seems to be the lack of perception by planners. By which I mean to say is that there isn't exactly what I would say a very high demand for any additional ammenities in the area (beyond Urbanists envinced in posts here). The whole district seems geared towards a more "suburban" and middle-class environment (contrasting with the more elitist Pearl District).

I simply don't believe that any additional city spending can significantly alter this area. Personally, rather than trying to form an "entertainment district" as envisioned by the Convention Center blocks (which would fall flat, especially considering we already have one) or a massively subsidized green district (I just don't think Portland has that kind of money) I would prefer to see a neighborhood of mid-rises for families. Honestly, I think it would work better than the existing plans which over-reach and assume too much that something can be created wholly out of nothing.
The city needn't spend excessive amounts of money, but rather just investing it wisely (rather like reducing property tax rates for apartments that offer housing to persons of a middle-income) a great deal more can be done to alter the area.

Let's face it, the Lloyd District won't be another Pearl. The property is divided between dozens of landowners, pre-existing business (much of which isn't stagnating as was the Pre-Pearl), and is home to a frequently noisy urban youth culture. We need a different plan; one that caters to reality rather than fantasy.

Thank you for reading my brief but long-winded response.

MarkDaMan
Aug 23, 2007, 3:24 AM
Reports drive home point: PDX requires a HQ hotel
Metro expects to make development decision on Sept. 27
Portland Business Journal - August 17, 2007
by Wendy Culverwell
Business Journal staff writer

Proponents of building a convention headquarters hotel have new evidence to back their objective. Two recent reports attribute the Oregon Convention Center's checkered performance to the lack of such a hotel.

A study by KPMG LLP attributes the drop in large convention business on growing competition for big events from other cities and the absence of a headquarters hotel.

"OCC event activity during calendar year 2006 supports findings that the lack of a headquarters hotel is negatively impacting the facility's ability to attract certain groups associated with relatively higher spending, and consequently, the economic and fiscal impacts to the region are similarly impacted," the authors note.

Meanwhile, Strategic Advisory Group, a consultant to the Portland Oregon Visitors Association, updated its own report on the subject at the end of July. Hotel issues eclipsed other reasons the center lost business, according to Strategic.

Other reasons included rental rates, organizers' needs for larger facilities and the center being unavailable for specific dates.

While the Oregon Convention Center itself is capable of housing most large meetings, Portland simply lacks the overnight accommodations of its competitors, including Long Beach, Calif.; Phoenix, Ariz.; Austin, Texas; Seattle; Salt Lake City; San Diego; Denver; and San Francisco, to name a handful.

Portland has about 1,000 total rooms within six blocks of the convention center. Its next-nearest rival, Long Beach, has nearly 2,000 rooms. San Francisco leads the class with nearly 9,000 rooms within a similar distance.

Not surprising, the headquarters hotel subject is far from dead. Discussions about building a headquarters hotel at the Oregon Convention Center promise to heat up substantially in the coming weeks.

The Portland Development Commission studied the idea and even selected a development partner to get it built, but eventually turned the matter over to Metro earlier this year.

A fresh round of studies has been completed and a series of meetings over the next month will culminate on Sept. 27, when the Metro Council is set to decide how or if it wants to proceed with development of a 600-room, privately managed, publicly owned hotel.

The connection between convention center success and a headquarters hotel is undeniable, said Jeff Blosser, executive director of the Oregon Convention Center.

"This is an industry and a business. You've got to listen to your clients and stay ahead," he said.

Jeff Miller, president and CEO of POVA, said he'll be there, advocating for a hotel at the convention center, every step of the way.

While the 2006 numbers were disappointing, Miller said it reflects a cycle. POVA already has booked a number of lucrative events for the convention center over the next few years.

But increasingly, meeting planners want headquarters hotels, he said.

"Those larger, more lucrative events are looking for the headquarters hotel packages. We get a lot of them. We lose a lot of them," he said.

wculverwell@bizjournals.com | 503-219-3415
http://portland.bizjournals.com/portland/stories/2007/08/20/focus2.html?t=printable

tworivers
Sep 3, 2007, 3:39 AM
This struck me as a slightly convoluted editorial. Isn't the time for "delving deeper" over? Finally? The cartoon that accompanied this was very funny btw.

Don't give up on the hotel
The Metro regional government should go deeper in exploring two alternatives, one public and one private
Sunday, September 02, 2007

F or nearly 20 years, the city of Portland has known it would need a headquarters hotel to attract big conventions.

We still need it. In the intervening decades, the competition for this lucrative business has only intensified. Lacking such a hotel, Portland loses conventions even to Spokane now, including three big ones recently, involving 14,432 room nights.

That hurts.

Austin, Boston, Denver, Houston, Indianapolis, Sacramento, very soon San Antonio, and even Vancouver boast convention center hotels. But Portland? No. Which to many national convention planners means:

"No go."

Such planners are a quirky lot. In sizing up Portland, though, most have a minimal requirement we can't meet -- a block of 500 rooms, adjacent to the Oregon Convention Center.

Not across a bridge, or a half-mile away, but right there. Exhibitors, organizers and a hard core of delegates need to be able to take their weary frames back and forth quickly to the solace of their minibars.

And we hope they're weary from the serious business of having fun. A study showed such delegates spend, on average, $300 a day. That gives a tremendous boost to our economy. If you have a right-sized hotel -- not too large but also not too small -- bringing conventions to town also helps "induce" demand in other hotels.

On Sept. 27, the Metro regional government will make a momentous decision: Should it press forward with the hotel, planned since 1989? Or should it walk away?

Metro has been meticulous in examining the potentially $150 million project. Not content to take any projections at face value, Metro has restudied existing studies. And more hard numbers about feasibility and financing must still be pinned down before the final call.

Based on what we know so far, though, it appears Metro should pursue two options simultaneously. It should revisit the idea of a smaller hotel that would be privately owned, but ramp up to 600 or more rooms quickly in two phases. True, last time the private model was investigated, it required a gigantic public subsidy, which made it a nonstarter. The long lead time in the convention business also works against the idea, since competitors can offer already-built rooms.

But the hotel market is so strong there's a chance that prospects for private ownership have improved. Meanwhile, Metro should aggressively pursue the more realistic alternative of public ownership. Under that scenario, Metro would issue revenue bonds to build a four-star hotel with a private operator.

Metro needs to put the public ownership model through its paces, ascertaining exactly what has happened with it all over the country and exploring every possible worst-case scenario.

True, every city's situation is different. But in Vancouver, a 226-bed convention center hotel opened two years ago that is publicly owned and privately operated -- by Hilton, no less. And it's helping to rejuvenate Vancouver's downtown.

Although some competing hoteliers are still grumbling, they are also benefiting from overflow convention business. "Everybody's boat is floating higher," says Pat McDonnell, Vancouver city manager.

Risky as it may sound to go forward in Portland, abandoning the hotel carries risk, too. It would have serious repercussions for the region, effectively demoting the Oregon Convention Center into a second-fiddle operation. (No offense to the 8,100 square dancers who came here in 2005.)

Without a hotel, the convention center will still attract local and regional meetings. People, expecting to spring for a sandwich, will drive in from Beaverton for the day. The big bucks for the economy will go elsewhere, though, along with the big national conventions.

The Metro Council has been properly skeptical in its approach to this project. Done wrong, a 600-room publicly owned hotel could be a disaster. Done right, it would be an economic development engine for the region and the state.

Pressure from some area hoteliers is intense, so the easiest decision, by far, would be for Metro to walk away. But the right thing to do is delve deeper. Build the best base of knowledge in the country about convention center hotels. Test the model thoroughly. And, if it holds up, build the hotel.

MarkDaMan
Sep 14, 2007, 6:17 PM
Q&A: A conversation with Gregg Mindt
The lodging lobbyist stands alone as a critic of the HQ Hotel
POSTED: 06:00 AM PDT Friday, September 14, 2007
BY LIBBY TUCKER

After decades of talk about building a headquarters hotel for the Oregon Convention Center, Portland took a step toward action Wednesday.

The Metropolitan Exposition and Recreation Commission, which manages the Oregon Convention Center for Metro, voted unanimously to support a publicly owned and privately financed hotel.

Developers, labor representatives and city officials lined up to praise the proposal and the commission’s progress.

But Gregg Mindt, a lobbyist for the hotel industry, criticized the project, even as he voiced his support for MERC’s resolution to further study a headquarters hotel’s financial feasibility. The hotel industry says a publicly owned headquarters hotel would unfairly compete for visitors with private hotels.

They want Metro to guarantee hotel tax money will not be used to finance the hotel’s construction or its operations. And they want a greater portion of hotel tax dollars to go toward tourism and marketing efforts by the Portland Oregon Visitors Association.

DJC: You in the past have been against the headquarters hotel proposal. But today you supported MERC’s resolution. Why?

Gregg Mindt: Originally the Tri-County Lodging Association was opposed to any publicly owned facility and the discussion (was) at a 400-room level. But clearly the data and the information shows that a 600-room is the number that gets the room block that best serves the convention center. And most data is showing that a privately owned hotel is difficult to achieve in this kind of environment for a headquarters hotel.

We still have concerns for a headquarters hotel, but we really want to be at the table to see if it’s the right thing for the convention center, the city and the region before we say absolutely not. We want to be in the dialogue rather than say no.

All the data has shown there will be an impact on the industry in the short term. We’re trying to say, How can we minimize that impact on the market and how do we get this broader discussion?

DJC: Was it the additional research that changed your mind? Or has it been the discussion?

Mindt: I think it’s been the discussion. Probably half a dozen hotel folks were involved in PDC’s technical advisory committee, which I was included in. And it was really reviewing a lot of the data last year and eventually that was kicked over to Metro.

The issue is we understand the importance of the hotel on the facility, but we’re concerned about the impact that hotel would have. It would be the second-largest hotel in the city. You can’t put a 600-room hotel in Portland and not have it affect all the other hotels.

DJC: Wasn’t one of MERC’s recommendations to pursue a marketing strategy?

Mindt: It’s starting to enter conversation now. It really hasn’t been in any meaningful way over the last couple of years. There’s been no talk about more dollars for marketing.

And not just to the convention center but for the leisure segment as well. So if we can market an expanded convention center with the headquarters hotel, we can market to the leisure traveler as well. The conversation starts to shift a bit, so the attention’s not purely on the hotel itself.

DJC: So it’s more if you can do something that benefits all the hotel industry and not this particular hotel, then you’re on board?

Mindt: Yeah, it’s kind of that rising tide theory. How do we benefit everybody?

POVA just doesn’t have the resources to do more. And it’s very complex, because you’ve got Metro that owns the convention center, but the city of Portland receives the lion’s share of the hotel tax that goes into the general fund. And very little goes into marketing or POVA.

In most cities, the convention center money is given away as a loss leader. And so what it is here is a very complex structure set up to have hotel tax money paid through the visitor development fund paying for the cost of the OCC to get groups to come here. So we’re already starting off at a competitive disadvantage.

DJC: The concern that you voiced was how this would be financed, through additional hotel taxes, and if that will benefit every hotel.

Mindt: When these financials come through, they’ll begin to say, We need more money to cover debt service or as a backstop. We’re saying no new taxes on the lodging industry to support that. The lodging industry won’t stomach that. We’re already doing our fair share for this facility and for lots of facilities in this area.

The other piece that’s always lost on these discussions is the hotel industry offers room rebates that go back to event planners for these events to come here. POVA will come to a hotel and say they’d like $10 or $15 per room to subsidize the cost of the event. It’s complex competitive issues.

They said, If we build the convention center, all the development will follow. It didn’t happen.

They said, Let’s build the Rose Quarter. Development didn’t follow. Now they’re saying, If you build the headquarters hotel, all the development will follow. And that’s partially true, but it’s not completely true.

Everybody has this euphoric approach that this hotel is going to solve all of our problems. And it’s still based on POVA’s ability to sell and compete against other markets and to deliver.

DJC: How should Metro proceed with this issue now that it’s being presented to them?

Mindt: At the joint MERC-Metro meeting, there was a lot of discussion about financial models. I think there was a lot of disappointment that we weren’t further along in that discussion. Now they’re saying, We need more time; we need to have $600,000 of investment to further study this to get some real numbers to look at.

There’s some disappointment from the lodging industry. A year ago the cost was $250,000 per key. That number continues to go up. I don’t know what that is now; it’s certainly more than $250,000, which is significant.

DJC: But you’re supporting it without exactly knowing the cost?

Mindt: Until we have answers based on some of our concerns, we’re not willing to support it. When we have some more clarity, then we’ll have a discussion of do we support it or not.

Our conversations with city commissioners have not been positive in getting general fund money that is hotel tax-based back into the industry. It’s been a very lukewarm discussion of that.

Let’s have a bigger discussion of how to make the whole industry grow and prosper. Right now POVA gets roughly $2.5 million in hotel tax money for marketing. We’re saying more marketing will work.

DJC: I know there likely will be a funding gap. It will be difficult to come up with the money for this project solely based on public funds. Is the hotel industry willing to pay into the construction or upfront costs of the headquarters hotel in order to receive that guarantee to put taxes back into marketing?

Mindt: No, we wouldn’t.
http://www.djcoregon.com/articleDetail.htm/2007/09/14/Lodging-lobbyist-alone-as-critic-of-HQ-Hotel-A-conversation-with-Gregg-Mindt-Developers-unions-and-c

MarkDaMan
Sep 20, 2007, 3:57 PM
Hotel vote is finally near, but wait -- there's a gap
Convention Center - After 18 years, Metro is to decide on a facility, but now it seems more public aid is needed
Thursday, September 20, 2007
RYAN FRANK
The Oregonian

For the Oregon Convention Center to survive, tourism boosters say, it needs a companion 600-room, $244 million hotel owned by taxpayers. To run the hotel, it turns out, the project also would need about $7.8 million in annual public aid.

Bill Stringer, Metro's chief financial officer, said recent projections by financial consultants pointed to that annual gap -- the most definitive estimate of its kind in the long-debated project.

Portland's regional government, Stringer told the Metro council, would have to find a way to supplement the hotel's annual revenue to cover twice-a-year mortgage payments for the first eight years.

The question threatens to delay the Metro council's decision on the project, despite its intentions of making a final decision after 18 years of deliberation.

Today, the council will debate the financing gap in its final public hearing before a Sept. 27 vote on the hotel's fate. A "no" vote would kill the hotel. But a more likely "yes" vote would provide an additional $600,000 and about six months to firm up all financial figures.

Metro council members are likely to approve more work, but David Bragdon, Metro council president, is less than gung-ho.

"I'm very cautious about getting into an enterprise activity that's normally provided by the private sector," Bragdon said. "I don't want my legacy to be a white elephant."

The decision before Metro -- which owns the convention center -- is not an easy one. Politicians have wrestled with it since 1989.

Opponents, including other hoteliers, argue a publicly subsidized hotel would flood the market and drive down rates across the board. They prefer a privately owned hotel with less taxpayer help.

Supporters say the hotel would attract more and larger conventions, helping spur the economy through spending at restaurants and art galleries. Consultants estimate the hotel would attract eight new conventions a year. Without a hotel, consultants say, Portland would lose about 15 percent of existing conventions to cities with similar hotels.

Bragdon thought he'd be almost done with the hotel decision by now. The hang-up, he said, is the annual financing gap.

Without an extra $7.8 million a year, Stringer wrote to the Metro council, "Metro does not have the financial ability to adequately finance the project without putting Metro's general fund and existing programs at undue risk."

Under the current proposal, Metro would sell bonds to raise money for the hotel's construction. A publicly owned hotel is cheaper to finance, supporters say, because governments can borrow money at lower interest rates.

The construction is estimated to cost $168 million. The total project cost -- including interest, reserves and fees -- is forecast at $244 million. The bonds would be paid back over 30 years or so with the hotel's revenue. (All figures are estimates until the hotel's builders provide a guaranteed price.)

Metro's problem is that the hotel revenue isn't expected to be enough for the first eight years. Things look OK after that because revenue is expected to grow.

The annual mortgage payment averages about $14.6 million. If projections hold up, the hotel has just enough revenue to cover the mortgage. But bond investors want to see a cushion in case revenue falls short.

For example, one "shock scenario" developed by PiperJaffray, Metro's bond underwriter, projected revenue would drop 41 percent in a recession that's less severe than the one following the Sept. 11, 2001, terrorist attacks. Without the cushion, taxpayers would be more likely to cover the additional shortfall.

That's why Stringer and bond investors want the cushion.

The exact amount of the cushion depends on questions that haven't been answered -- among them, would Metro put up its general fund as a backstop?

A Standard & Poor's report issued this week shows similar hotels elsewhere -- Austin, Texas, Baltimore, Denver and San Antonio -- needed an extra 40 percent to 90 percent of the mortgage payment to make the bonds work.

The hotel is expected to generate $13.5 million in net operating income. If Metro backs the bonds, it would need $21.3 million annually to service the debt and provide a cushion, leaving the $7.8 million gap.

Metro is looking at a few options.

The most likely ones revolve around hotel-motel taxes, said Daniel B. Cooper, Metro's attorney.

Portland's hotel guests pay a 12.5 percent room tax, which helps pay for tourism marketing and debt that built the convention center, among other things.

Under one proposal, the hotel would keep all of the room taxes it generates and add a 2 percent surcharge for its own coffers. Those steps would generate $3.4 million a year.

Under another idea, the city and Multnomah County would refinance bonds that built the convention center. Those bonds are paid back through existing hotel room tax revenue. A refinance would reduce the bond payments and free up about $2.9 million in annual tax revenue for the convention center hotel.

Together, the two measures would still leave a $1.5 million shortfall.

Bragdon mentioned two options: state lottery funds, or a fee on property owners near the hotel, also known as a business improvement district.

With a yes vote next week, Bragdon and Metro would spend the next few months seeking political support to pull together the financing package.

Ryan Frank: 503-221-8519; ryanfrank@news.oregonian.com

http://www.oregonlive.com/news/oregonian/index.ssf?/base/business/1190258702155510.xml&coll=7

MarkDaMan
Sep 20, 2007, 3:59 PM
^it appears that every month they wait another mil gets attached to the project. Just think how much more affordable this would have been if done in conjuction with the OCC expansion. They need to either shit or get off the pot!

zilfondel
Sep 21, 2007, 7:33 AM
luckily, according to industry sources, materials costs are supposed to drop (first time in a decade!), so perhaps inflation will catch up to construction estimates.

tworivers
Sep 25, 2007, 12:38 AM
I am somewhat surprised that Adams would touch this with a ten foot pole.

Too bad he wasn't mayor when the Fire Station 1 move got nixed.

City could fill money gap on HQ Hotel
Sam Adams says Metro may get a public bailout if it lacks partners for the project

POSTED: 06:00 AM PDT Monday, September 24, 2007
BY LIBBY TUCKER

Portland City Council could help Metro float a convention center hotel, Commissioner Sam Adams told Metro Council last week. Metro faces a multimillion dollar funding gap if it develops the $185 million publicly financed and privately operated hotel.

“If (a partnership) doesn’t impact operations,” Adams said Thursday, “there’s potential for support” from the City Council for financing a headquarters hotel.

Metro Council this week will vote on studying a range of financing options and setting a firm cost estimate for the project. A no vote on the $600,000 six-month study would likely once and for all kill the project, which various public agencies have considered building for nearly 20 years.

If the study is approved, Metro will seek to partner with other public agencies, including the city of Portland, Port of Portland and others to fill the financing hole. Metro Council will meet again in six months to decide if it will give the project a final go-ahead.

“This is not a vote that locks Metro into building a hotel,” Metro Councilor Rod Park said.

Preliminary cost estimates by Starwood Hotels and Resorts, which would operate the proposed hotel, place construction costs and operating costs near $244 million. But uncertainty in the bond markets and rising construction costs could push price estimates higher. To lessen the risk for investors, Metro says it needs several million dollars as a funding backstop.

A Metro bond sale would likely cover construction of the 600-room hotel, to be built adjacent to the Oregon Convention Center on land owned by the Portland Development Commission.

And a room tax on visitors would largely pay for the hotel’s operating costs, the Metropolitan Exposition and Recreation Commission says.

But the study completed by Metro consultants was “deeply flawed,” Joe Cortright, an economist with Impresa Consulting, told Metro Council, and should not be used as a basis for Metro’s decision.

The Metro study estimates an increase in hotel nights that “is not supported in the data,” Cortright said. The study also did not include a competitive analysis of other cities vying with Portland for conventions and the capacity of future private hotels in the city, he said.

“A publicly funded hotel,” Cortright said, “... pushes off into the distance private investment.”

Taxpayers, critics say, could be left holding the bag if the region fails to meet projected demand for hotel rooms or its goals for recruiting eight large conventions a year.

But bond holders, not the public, would ultimately be responsible for a failed hotel, said Matt Raine, an executive with Starwood.

MarkDaMan
Sep 26, 2007, 4:09 PM
Hotel plan banking on boom in visitors
Convention Center - A consultant says higher room rates and demand will offset costs; opponents are skeptical
Wednesday, September 26, 2007
RYAN FRANK
The Oregonian

The case for Portland's Convention Center hotel is built on the assumption that a growing number of visitors will come to Portland and pay rising room rates to stay here.

Metro, Portland's regional government, will vote Thursday on the fate of a proposed-600-room Westin hotel that would be government-owned. The decision will be made in part on a forecast by consultant HVS International that projects a 16 percent spurt in national, state and regional convention visitors. The consultant expects the new visitors will pay room rates that, on average, increase 4 percent annually, four times the rate of the previous 11 years.

If HVS is right, the hotel would cover its yearly mortgage payments with a little help from taxpayers. If the consultant is off, as opponents believe, taxpayers may be forced to help cover a bigger share of the debt payments.

The post-Sept. 11 recession dragged down the travel industry in recent years, driving down average room rates. The downturn prompted Omaha, Neb., and Overland Park, Kan., to dip into reserves to cover debt payments on similar hotels.

But Thomas Hazinski, HVS' managing director, says business is better at convention center hotels and the travel industry in general is headed for a continued upturn that will propel Portland's proposed Westin.

The hotel's opponents say HVS paints a picture that's too rosy to justify the risk of a government-owned hotel. While a list of tourism boosters back the hotel, at least three Portland hoteliers warn it could swamp the market and drive down rates for everyone. The two sides have set up a heated political battle.

"These estimates are so seriously flawed that they should not be relied upon," Joe Cortright, a Portland economist who isn't working for either side, wrote Metro about HVS' forecasts for new demand.

Hazinski says his projections are conservative and based on reams of research for similar hotels elsewhere. The critics, Hazinski says, "should really know better. I stand by our projections."

Conventions go elsewhere

The hotel's public benefit -- and the reason for Metro's involvement -- is to spur the economy. New visitors would boost spending on meals, museums visits and wine country trips.

The hotel's success rests mostly on the idea that if Portland builds the Westin, more people will come to town.

Convention planners have passed over Portland because they like to have a block of 500 rooms next door, industry experts say.

Surveys by the Portland Oregon Visitors Association show that about 82 conventions skipped the city in 2005 and 2006, in part, because it lacked such a hotel. About 28 percent of those said they didn't come exclusively because Portland lacked the hotel.

Based on those figures, Hazinski estimates, Portland would get about 20 percent of the lost business. "We have to make a reasonable assumption," Hazinski said. "I thought 20 percent was a pretty safe number."

Hazinski says those new conventions -- plus new leisure and business travelers and visitors for smaller meetings and group gatherings -- would drive growing demand for hotel rooms.

Forecast calls for growth

For the hotel to meet its goals to boost the economy, HVS forecasts:

The city will score a 10 percent increase in the number of regional, state and national conventions and 24,000 new convention visitors, a 16 percent increase.

Room rates at the Westin must average 4 percent growth annually, from $118 in 2006 to $161 in 2014. That compares with a 1 percent average annual growth rate from 1996 to 2006 for high-end Portland hotels.

Cortright notes that HVS expects room rates to increase like clockwork in future years without a decline. "It's hard to buy that," he said.

On an average night, about 424 of the hotel's 600 rooms would be rented. That's a 71 percent occupancy rate, a little higher than the 69 percent rate for top-flight hotels between 1996 and 2006.

Hotel room demand across Portland from conventions, meetings and groups -- a significant driver of overall demand -- would jump 14 percent in the hotel's first year.

The Lloyd District will finally turn around in time to serve new convention visitors. City leaders have worked since the 1980s to revitalize the area, but the top restaurant remains a Red Robin.

HVS cautioned the hotel would "not be expected to perform as well if the neighborhood does not transform into an area that will generate strong appeal to the general public." Hazinski said the hotel would need all planned projects in the area -- a condo tower, an office building and the streetcar extension -- done by 2014.

If the hotel meets those projections, the regional government will still have to fill an annual financing gap for the hotel's first eight years or so, says Bill Stringer, Metro's chief financial officer.

Stringer said Metro must find $7.8 million annually to provide a financing cushion to satisfy bond investors in case HVS' forecasts fall short.

That figure jumps to $10.7 million if the Metro Council won't offer its full credit as a backstop.

Ryan Frank: 503-221-8519; ryanfrank@news.oregonian.com
http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1190778935210210.xml&coll=7

chepe
Sep 26, 2007, 6:52 PM
I don't really have an opinion one way or the other about this hotel project but the deal structure sounds ominously like that used for the River Park Square project in Spokane. I'm sure most here aren't familiar but in a nutshell, it was a downtown renewal project that involved a public/private partnership for the parking garage aspect that went wrong in every way possible and cost everyone involved a good deal of time and money (much of it apparently due to overly optomistic consultant reports about garage usage and revenue). In the end, the project is actually a good thing for Spokane (in my opinion) but it took a lot to get there. If this deal goes forward, here's hoping it goes more smoothly.

http://seattlepi.nwsource.com/local/222003_spokane28.html

City officials moved to put a long-running civic nightmare behind them yesterday, approving settlement of the last lawsuit filed over the River Park Square mall.
...
That ends nearly all litigation over the downtown shopping mall, a project that has consumed local government for five years and destroyed the political careers of three mayors.
...
The deal means the city will have paid $32.6 million over the past year to settle fraud claims by bond investors while collecting $11.2 million in settlements from former co-defendants.

River Park Square, which opened in 1999, is a $110 million shopping mall and entertainment complex built with public and private money to help revitalize the downtown core.
...
Numerous lawsuits were filed. City officials estimate that $20 million was spent on attorneys fees over the past five years.
...
The parking garage, also built with public and private money, was supposed to be backed by city parking-meter revenues. When those revenues fell short, the council refused to spend the meter money, resulting in lawsuits in state court. Meanwhile, investors who bought about $31 million in garage construction bonds sued in federal court, alleging fraud and misrepresentation.

Sioux612
Sep 28, 2007, 1:22 AM
A blurb from Ch.8 news said one possibility is the Oregon Native American Tribes operating a Casino Hotel next to the convention center. Though, this is probably a long shot.

PacificNW
Sep 28, 2007, 1:41 AM
I think a Confederation of all the Tribes in Oregon going into this project would probably eliminate fighting between the tribes but the present Governor is on the record of no casino in Portland... He probably should meet with the Washington Gov to discuss "any positive" benefits Washington is experiencing by allowing casino's in their cities.....those Washington casino's are probably sitting on tribal lands, though. Although a precedent has been set by the Oregon Governor by allowing a casino to be built and operated on non-tribal land in Cascade Locks.

Snowden352
Sep 28, 2007, 5:00 PM
I am an open critic of this project, but after reading this article I find myself cheered:


Thursday, September 27, 2007 - 4:33 PM PDT
Metro delays hotel decision
Portland Business Journal

The Metro Council on Thursday delayed a decision on whether to build a headquarters hotel.

Rather, it voted to authorize the creation of a financing plan for the potential development of a 600-room publicly owned, privately operated headquarters hotel near the Oregon Convention Center.

The seven-member council unanimously agreed to ask hotel supporters to commit to the project and indicated it wants a financial plan that will prevent tax dollars from ever supporting the multimillion dollar project.

The council unanimously approved plans to solicit political and financial support from other public agencies as well as private supporters. It also directed its underwriter and financial counselors, Piper Jaffray and Seattle Northwest Securities, to create financing plans, one of which must include hold-harmless language protecting Metro taxpayers from being forced to bail out the hotel if it fails to meet revenue expectations.

Supporters want the hotel to complete the convention center, which consultants say loses business because meeting and convention organizers want large blocks of hotel rooms available on site or nearby. With no private developer willing to build such a hotel on its own, Metro is being asked to construct a publicly-owned, privately operated hotel.

The hotel would be built with financial support from partners as well as proceeds from bonds. Bonds would be repaid with revenues generated by the hotel. But the Metro Council indicated it wants assurances that bonds will never be paid with tax revenues, even if hotel revenues fall short.

One way to hold taxpayers harmless is to not pledge the full faith and credit of Metro's tax base to the bonds.

Without that kind of government guarantee, the hotel revenue bonds would be riskier and carry higher interest rates. The developer could be required to insure against a default. Higher interest rates and added insurance requirements would raise the cost to construct the hotel.

Councilman Robert Liberty said he will only support a financial plan that includes language holding taxpayers harmless for an inherently risky project.

"It's clear to me that we're in a highly competitive convention business and a lot of capacity is being added around the country," he said, referring to hotel-building activities in cities that compete for convention business.

Liberty said the risk that the hotel won't meet financial expectations should fall on those who most benefit from its construction.

The headquarters hotel returns to the Metro agenda in early November, when the council will consider terms of a development agreement

In the interim, councilors want hotel supporters to commit their political and financial support.

"The success of the plan depends on commitments from partners we don't have yet," said Councilman Carl Hosticka.

All contents of this site © American City Business Journals Inc. All rights reserved.

tworivers
Oct 28, 2007, 6:18 AM
from the Oregonian:

HQ Hotel: Talks near done
Posted by Ryan Frank October 25, 2007 14:36PM

The politics of Portland's proposed convention center hotel may become a tad bit clearer next Thursday when City Hall and Multnomah County weigh in on the idea.

Officials from Metro, Portland's regional government, will finish talks with city and county leaders by Wednesday. Reed Wagner, the Metro council's staff manager, says Metro is asking all 10 city and county elected leaders to agree in writing to support the hotel and be part of future talks about its financing. Metro has started to pass around a draft letter that it hopes the electeds will sign.

Metro, which owns the Oregon Convention Center, is considering floating public bonds to build the 600-room hotel. But first, it must plug a gap in the hotel's budget. Metro must find $7.8 million to $10.7 million annually to fill the gap over the first eight years. The money is a necessary cushion in case hotel demand falls short of projections. (Ashforth Pacific of Portland and Garfield Traub of Dallas, Texas, would be the developers.)

Wagner said Metro is looking for majority support from both City Hall and Multnomah County. If they get it, Metro may move ahead with more studies to get more firm construction cost estimates and fill the financing gap. If they don't find the support, the hotel -- and 18 years of talks -- may officially die.

Michael Jordan, Metro's chief operating officer, will make his recommendation to the Metro council on Thursday. The council is scheduled to vote Nov. 8.

MarkDaMan
Oct 30, 2007, 3:32 PM
Rumors add intrigue to headquarters hotel vote
Sources Say

The Portland Tribune, Oct 30, 2007 (1 Reader comment)
New Seasons Market

Is it a real offer or a last-minute effort to muddy the waters?

Just as the Metro Council is gearing up to vote on whether to spend $150 million to build a publicly owned 600-room headquarters hotel across the street from the Oregon Convention Center, one or more private hotel operators are rumored to be preparing offers to build their own projects on the site with far less government dough.

Lobbyist Len Bergstein, who represents some hotel owners opposed to the public project, confirms that the Red Lion Hotel chain is among those expected soon to contact the Metro Council with a potential offer.

One concept would promise to build a 300- to 400-room hotel with the possibility of expanding in the future in exchange for only the land, which is owned by the Portland Development Commission.

The elected Metro Council is expected to receive a report Thursday on whether other local governments would support such a hotel, and one week later would vote on whether to proceed.

– Tribune staff
http://www.portlandtribune.com/news/story.php?story_id=119369272198498400

pdxtraveler
Oct 30, 2007, 3:51 PM
Rumors add intrigue to headquarters hotel vote
Sources Say

One concept would promise to build a 300- to 400-room hotel with the possibility of expanding in the future in exchange for only the land, which is owned by the Portland Development Commission.

– Tribune staff
http://www.portlandtribune.com/news/story.php?story_id=119369272198498400

300-400 room isn't enough. We need a minimum of 500 rooms for the major meeting planners to look at us. I hope they stick with the 600 rooms.

designpdx
Oct 30, 2007, 3:55 PM
Red Lion? Not exactly a Westin or similar quality hotel chain. I also think more rooms are needed if you are going to build a convention center hotel. We have hotels in the 300-400 range. This needs to provide a larger block of rooms to bring in the larger conventions.

PacificNW
Oct 30, 2007, 4:19 PM
Is it possible for a government/private partnership? Say, for instance, the Red Lion build their 400 room portion and government backed bonds build another 300-400 rooms..We need 600-1,000 rooms in one location for the larger conventions/events to consider Portland. For instance: In order to get the NBA All Star game won't this be necessary?

pdxman
Oct 30, 2007, 5:31 PM
Red Lion? Eeesh...why not shilo inn? Affordable excellence right? I can't even imagine how horrible that hotel or motel would look like

PacificNW
Oct 30, 2007, 7:39 PM
I think the Red Lion brand is quite a few steps up the rung from a Shilo....Most conventions hotels, in my convention experiences, aren't necessarily "top rung"... A Ritz Carlton is not necessary, and in some instances, either is a Westin or Hilton... At one time the Red Lion brand was "upper middle"....perfect for conventioneers....as long as they had plenty of their own meeting/ballroom facilities located right in the hotel. The rooms/meeting spaces in the Red Lions, at one time, in the Jantzen Beach area were more than adequate.

Maybe, since their split from the Hilton brand, Red Lion is attempting to build their image.

sopdx
Oct 30, 2007, 7:41 PM
Red Lion? Not exactly a Westin or similar quality hotel chain. I also think more rooms are needed if you are going to build a convention center hotel. We have hotels in the 300-400 range. This needs to provide a larger block of rooms to bring in the larger conventions.

This is entirely true. Putting a 300-400 rooms would not accomplish the goal of attracting larger conventions

Okstate
Oct 30, 2007, 9:49 PM
I say build a 35 story Hyatt Regency!

pdxman
Oct 30, 2007, 9:52 PM
^^^That would be nice

joeplayer1989
Oct 31, 2007, 3:52 AM
something like this

https://www.resourcenter.net/images/NANPA/EmailImages/Hotel%20Exterior.jpg

Okstate
Oct 31, 2007, 4:19 AM
That's the exact one i had in mind ;)

PacificNW
Oct 31, 2007, 5:23 AM
↑ Cool..

MarkDaMan
Oct 31, 2007, 2:52 PM
one things for sure, that building you guys are referencing would fit in with the Lloyd District...I'd like to see something spectacular, preferably with more angles and curves.

EastPDX
Nov 1, 2007, 8:33 PM
A consultant/advisor/third party has already said the 600 number is the minimum number of rooms at the start in order for this to pencil out. You need a block of 500 rooms available for the client. What a waste of time. PDX never can move forward because "old money" and entrenched special interests hate to have their slice of pie changed.

Paul Allen and the hotel owners are the number one examples of this point of view. No wonder the Rose Quarter, Convention Center Area, and the Lloyd Center District can't move forward.

EP

sopdx
Nov 2, 2007, 12:54 AM
My god, if you follow the history of this thing and the freaking money spent on report after report after report, it's astounding, think of the trees wasted - they probably could have built the damn thing for less. I'm surprised they haven't contacted each and every one us to write another one.

tworivers
Nov 2, 2007, 2:16 AM
Metro voted today to spend the 600K to further study the proposal and nail down some hard numbers. This after receiving tepid support from city and county that they'd try to provide some financial support. I can't remember the current timeline.

Potter is apparently against the hotel, as he did not send a letter of support. Not surprising. I was shocked, though, to read that Leonard is one of the project's "strongest supporters". That guy is all over the place. I was thinking the other day that someone should go down to the old Oak Tower site and hang a big sign on the fence that says "Randy's Hole".

PacificNW
Nov 2, 2007, 2:49 AM
The mayor, for all his talk, lacks a true vision for Portland...The convention center is a reality. It needs a headquarters hotel to remain competitive...or there needs to be some "visionary idea's" to get attendee's to/back to the center from the downtown hotels in an efficient/speedy/convenient manner.

zilfondel
Nov 2, 2007, 5:48 AM
I just read that NYC might get a 1,800 room hotel.

Heh. I suddenly feel rather smallish...

urbanlife
Nov 2, 2007, 7:06 AM
I just read that NYC might get a 1,800 room hotel.

Heh. I suddenly feel rather smallish...

NYC can do that to any American city.

sopdx
Nov 2, 2007, 3:29 PM
I think thats mid-sized in Vegas.

tworivers
Nov 5, 2007, 5:16 PM
Oregonian editorial this morning. Good they are sticking to the minimum 600 rooms in the context of this mysterious private sector "possibility". They also have a great editorial on the ag bill this morning -- sometimes the O surprises me.

Metro on the mezzanine
Support for a hotel from the city and county should push the regional government to figure out financing
Monday, November 05, 2007

Never mind the multiplier effect. In 2006, travelers of every variety -- international, national and within Oregon -- spent $7.9 billion in our state. That's how much they spent directly on hotels, restaurants and other goods and services.

And it's nearly 7 percent more than the year before. Last year was the third straight year of growth for the tourism industry, which now employs nearly 90,000 Oregonians. It's easy to sneeze at tourism-related jobs, and it's true that some are entry-level, modest or minimum-wage. But tourism also keeps many sole proprietors going (including outfitters, specialty retailers and B&B operators). When tourism is strong, these small businesses make a very decent living.

This is the crucial context, the backdrop, if you will, for a dramatic decision Metro will make this week on the Oregon Convention Center hotel. The project is critical if Portland is going to keep landing big conventions, which, in turn, keep a steady stream of tourists coming to our state. On Thursday, the regional government will decide whether to move forward with the hotel or drop it.

In the past few weeks, Metro has been scrambling to gauge the city and county's interest in the project, since they would, potentially, have a role to play in a revamp of hotel taxes to help pay for it.

In these back-channel conversations, tentative majority support for the hotel has materialized. How reliable it really is, though, in the absence of a reliable set of numbers for the hotel is anyone's guess. Still, the Metro Council should now go forward to obtain final figures for financing a publicly owned hotel project.

Meanwhile, a very intriguing possibility has emerged from the private sector. Clearly, if it's possible to get a 600-room hotel built privately without a huge public subsidy, that is ideal. The private developers should hasten to put exactly what they're willing to do in writing. But Metro shouldn't delay the next step in its investigation of the publicly owned model while waiting for this private proposal to take shape.

Hard to quantify, but not unimportant is the question of how a convention center hotel would boost the state's tourism industry. It would be worthwhile for Metro to explore that question more fully, too. Anecdotally, we know big conventions bring big dollars in, not only to the region, but also to the state. That's why Todd Davidson, executive director of the Oregon Tourism Commission, has testified in favor of the hotel project.

Visitors expand their convention weeks with pre- and post-convention trips. And those who come for a conference often return to visit other parts of Oregon. (As vital as tourism is to the metro region, some less populated areas in our state are even more economically dependent on it.)

No one knows yet if it makes sense for Metro to build this hotel, but many across Oregon are watching and hoping it does. They, too, await the numbers, knowing that where the future of tourism is concerned, a convention center hotel could have a multiplier effect on their own bottom lines.