Regional officials got a green light Thursday to start negotiations with a team led by Mortenson Development, which hopes to build one or two hotels near the Oregon Convention Center.
A rendering of one of four proposals by Mortenson Development. This proposal calls for two hotels to be built north of the Oregon Convention Center.
A rendering of one of four proposals by Mortenson Development. This proposal calls for one large hotel to be built north of the Oregon Convention Center.
The Metro Council voted 6-0 Thursday to authorize its staff to talk to Mortenson, which proposes building 600 Hyatt-branded rooms across the street from the Metro-owned center. The council would still have to approve any agreement reached with the developers.
About a dozen people spoke in favor of the proposal at Thursday's meeting, saying it would bring jobs, conventions and maybe even an NBA All-Star Game to the Rose City if it was built.
But downtown hoteliers continued to express their desire that the project have protections for the current hotel market.
Proponents of building a hotel at the convention center – a project that has been talked about for decades – argue it will help Portland attract more large conventions to the area. Regional officials say a public subsidy would be required to convince a hotel owner to keep rooms available for big conventions.
Hyatt's proposal calls for a subsidy of $10 million to $23 million, depending on which of the four Hyatt proposals is selected. It also calls for a 30-year rebate of most room taxes; Willamette Week recently estimated that could be worth $111 million to the hotel's owners.
Scott Cruickshank, the Oregon Convention Center's executive director, said several convention operators have told him they will not come to Portland or return until it is built. Meanwhile, he said, about 2,000 hotel rooms are under construction adjacent to the Neal Kocurek Memorial Austin Convention Center in Texas and 700 rooms are planned adjacent to the Spokane Convention Center.
"Spokane will quickly become one of our greatest competitors," Cruickshank said.
Sarah Mensah, chief operating officer of the Portland Trail Blazers, said the city's hotel situation is one of the reasons Portland has never hosted an NBA All-Star Game.
"Many conventions are primed for Portland and they need a convention center hotel to get here. I have seen this … as it relates to working to the NBA to try to bring an All-Star Game to Portland," she said. "To this date, we have not been able to put a viable proposal in front of the NBA because we do not have a convention center hotel."
As he did Wednesday before the Portland Development Commission, attorney Tim Ramis spoke on behalf of downtown hotel operators, calling for more study of the proposal and a room rate floor.
"See what's really happening in terms of our competition across the country," Ramis said. "Are we really in a period where there's an expanding market, or is the direction the opposite? That's an important question before you make this investment."
Metro Councilor Carl Hosticka also wanted to know more, but was ready to proceed with negotiations. He said a public subsidy could be appropriate under the right circumstances.
"I will be looking, as we go through this, to compare the size of the subsidy and shape of the subsidy to the public benefit that will come from the hotel," Hosticka said. "I appreciate the testimony from people who say we have to be very careful in scrutinizing and assessing the public benefit. If it turns out that the benefit exceeds the investment from the public, I'd be happy to support it as it goes forward."
Councilor Barbara Roberts said Metro's vote was all about a closer look at the project.
"What this next step is about is taking the time to get it right," she said.
Councilor Rex Burkholder was excused from Thursday's meeting.
Note: An earlier version of this story did not include specifics about the public subsidies requested by the developers. This version has been updated.
(Sept. 4, 2012)
(Sept. 4, 2012)
(July 12, 2012)