Barring a last-minute miracle, Metro, City of Portland and Multnomah County leaders will pull the plug Monday morning on the latest chapter in the long-running effort to finance a so-called “headquarters hotel” next to the Oregon Convention Center.
Speaking on background, sources familiar with the decision-making process say that the hotel is dead unless Mayor-elect Sam Adams produces a previously unknown source of cash at a meeting between Adams and other elected officials and their staffs scheduled for 8:30 am Monday.
(Although the City of Portland abandoned its most recent efforts to finance a hotel in 2006, the City and Multnomah County are part of the decision-making process, along with the Convention Center’s owner, the Metro Regional Government. That’s because all three government agencies would have to make significant budgetary sacrifices to finance the hotel).
For nearly two decades, pols and tourism boosters have tried numerous approaches to develop a hotel they hope would generate more overnight convention business for the publicly-financed facility on the inner eastside.
Back in September, Metro, which operates the Convention Center through its Metropolitan Exposition Recreation Commission (MERC) delayed a decision on what had been presented as a 600-room, $247 million project. At that time, Metro’s legal and financial staffers were trying to find a financing structure that could plausibly support the hotel.
Tentative plans included getting the City – which has a stronger bond rating to back debt for the project – and the city-owned Portland Development Commission to donate the land for the hotel. Metro then pushed back the decision to Dec. 18.
But the word from inside is that the numbers did not pencil out. Deteriorating bond market conditions have made financing more expensive; economic uncertainties have cast a pall over projections for the tourism and convention business; and finally, Metro staffers say to move to the next level of analysis would require an additional $5 million, which Metro is discinclined to spend.
None of the governments involved has proposed an alternative financing plan. Instead, in recent weeks, PDC has apparently become less interested in donating land to the project.
The proposed financing structure, which would divert property taxes generated by the hotel directly to debt service, looked increasingly costly to cash-starved Multnomah County, which is more dependent on property taxes than either of its partner agencies.
The cancellation of the hotel project comes at an opportune time for Portland Beavers and Timbers owner Merritt Paulson. Paulson wants the City to pay $85 million to renovate PGE Park into a soccer-specific facility for a Major League Soccer expansion team he hopes to buy; and to build a new baseball stadium for the Beavers.
The leading site for a new stadium appears to be property now occupied by the obsolete, under-used city-owned Memorial Coliseum, a few blocks north of the Convention Center.
If the City and PDC can now re-direct the staff time—and money—they have been considering spending on a headquarters hotel, they can far more easily devote resources to Paulson’s idea—and to Trail Blazers’ owner Paul Allen’s complementary desire to enliven the Rose Quarter.
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Tags: Convention Center Hotel, Merritt Paulson, Metro, PDC, Sam Adams
Nigel,
Call me a naysayer, but this looks like the perfect storm to move forward with the project.
Financing is more expensive;
lousy expectations for tourism;
the next level needs $5 million;
there’s no financing plan;
and the PDC is pretending to be diligent.
All reasons to expect Sam Adams will lead some half baked way to divert money from the various cash-starved partner agencies in order to save the Hotel and current Convention Center boondoggle.
After all, millions have already been spent bouncing the idea around.
Remember, the genesis behind the Hotel idea is that it will supposedly pull the Convention Center out of it’s money losing funk.
Because, in the City of Portland, few things are as natural as throwing good money after bad, we should expect Adams to green light the Hotel.
Of course the Mayor should should initiate an effort to privatized (make profitable) the Convention Center operation and spend more time tackling what local government around here has too long neglected and deferred.
I know I know,,,,,,Mayor who?
[...] long, long-proposed convention center hotel has appeared dead multiple times [...]