A rendering of the proposed Hyatt Regency hotel near the Oregon Convention Center.
The deal is solid, and it's time to move on.
That was the argument Metro councilors made Thursday as they voted unanimously to approve an agreement for building a 600-room Hyatt hotel across from the Oregon Convention Center.
The council also voted to authorize the sale of revenue bonds to support construction of the $212 million hotel project. Those bonds would not be issued until closing, which is expected next year.
In the meantime, the agreement will let Metro, Mortenson Development and Hyatt start designing the hotel.
Metro's agreements call for $78 million in public financing to be matched by about $134 million in private-sector investment. Room taxes, designated to pay for visitor promotion in Portland, will pay off the $60 million in bonds Metro expects to issue next year.
The bond issuance is unlikely to happen, though, until legal challenges to the hotel project are resolved. Some hotel owners, primarily backed by the owners of the Provenance hotel group, are fighting the project's public investment in lawsuits at the Oregon Court of Appeals and Clackamas County. Meanwhile, Metro is asking a Multnomah County judge to review its work and say the bond sales can proceed.
There was little comment from the public at Thursday's council meeting. Portland Trail Blazers vice president Michael Lewellen said the hotel will help the Rose Quarter venues attract new events.
"Just imagine what we can accomplish together with a 500 room block within walking distance of the Rose Quarter," Lewellen asked the council. He stopped short of saying the hotel would help Portland attract an NBA All-Star Game, but said "the day has arrived for the hotel project to move forward."
All the council members gave their reasoning for voting in favor of the development agreement.
Councilor Craig Dirksen, in his second year representing the southwest part of the region on the council, said he was skeptical of the project when he was running for council in 2012.
"We have come up with a solution, something that really meets all of my concerns and allows me to be very supportive of this," Dirksen said.
He pointed out that for every dollar the public is investing, the private sector is immediately investing another $2. He then pointed out that the hotel is expected to bring $120 million in business to the Portland region every year.
"I look at that $60 million bond over 30 years, that's roughly $2 million a year," Dirksen said. "But in return, we're generating 60 times – 60 times! – that amount. That's a great return on investment."
Councilor Bob Stacey, whose district includes southern Portland, said he too was skeptical of the project at first, wondering if the public investment could be put to other uses.
"We're using resources… from a tax on visitor accommodations. The room tax," Stacey said. "That is significantly restricted by state law, and further restricted by intergovernmental agreements, on visitor facilities. … We don't have the choice of spending it on potholes or community services. We do have a choice to make a prudent investment."
In his closing remarks, Metro Council President Tom Hughes said that "every credible authority we've asked to opine" on the finances has said the public sector's investment works.
"Our opponents have taken a somewhat different tactic," Hughes said. "From the beginning, theirs has been a political campaign. They've not, to my knowledge, brought a single financial expert to the table, they've not brought a single report to the table, that would indicate whether this project can be successful or not. They've brought us a series of unsubstantiated claims we answer, and instead of saying 'Thank you,' they say 'How about these claims?' and come back with other stuff."
Hughes said the finances have been scrutinized not only by financial experts, but by the elected Portland City Council and Multnomah County Commission.
"This has stood the test of everyone who has scrutinized the finances," Hughes said. The public investment is secure, and the public investment comes from a source that can't be used for anything else. It's a great way to finance this project."
In a statement released shortly after the unanimous vote, the project's opponents, the Coalition for Fair Budget Priorities, said they will continue to try to refer the finance plan to the voters.
“We live in a democracy and Metro does not have the authority to authorize this hotel without a vote of the people," the coalition said. "In 1987, when the legislature gave Metro the ability to operate major cultural, convention and entertainment facilities, they added a restriction to the legislation stating, 'unless the electors of the district first approve the financing of the facilities, the district shall not construct new facilities.'"
Metro has argued that the same law gives Metro home rule, which allows the Metro Council the power to issue the bonds. Metro also says that the issue is moot because the project is part of a public-private partnership, and would not be a Metro-run facility.