Mar. 6--FORT WORTH, Texas--City leaders took the first step Tuesday toward making a luxury 600-room convention center hotel a reality, voting 8-0 to approve $2.6 million for the project's initial phases. 

The money, which will be advanced from the city's general fund, will be used for preliminary design and development work on the hotel. 

The facility could cost about $120 million. 

City Council members said the hotel will help attract large, high-dollar conventions, and will complement the $75 million in renovations under way at the Fort Worth Convention Center. 

"I think it will have a great effect on our ability to bring those types of conventions that we've really been seeking," Councilwoman Becky Haskin said. "We can't do one of these projects without the other. The two have to go hand in hand." 

Councilman Jim Lane was absent from the meeting. 

If given the final go-ahead, the hotel would be financed with tax-exempt bonds that could be sold this year. The bonds, which do not require voter approval, would be used to repay the city's general fund for early expenses, officials said. 

City officials dismissed long-standing concerns that the hotel would harm the existing market, saying they are confident that downtown Fort Worth can absorb the additional hotel rooms. 

But Bruce Walker, president of Source Strategies, a San Antonio-based hotel consulting firm, has said the new facility could saturate an already struggling market. Hotel occupancy in the downtown area was about 48 percent for 2001, he said. 

The proposed hotel, which could be have 400 to 600 rooms, would be on Houston Street between 11th and 12th streets. 

A 400-room facility, which had been discussed previously, would cost $75 million; a 600-room hotel would cost $110 million to $120 million, officials said. 

The hotel would probably offer additional meeting and ballroom space, 500 parking spots and a full-service restaurant. Additional amenities such as room service, on-site laundry service and a health club are also likely, city officials said. 

Councilman Frank Moss said the hotel's perks -- particularly the additional meeting space -- are important selling points. 

"When we got out and started pursuing those quality conventions, we realized we didn't have the hotel space," Moss said. "With a hotel -- with the meeting space the hotel brings -- we'll have a chance to go out after them. 

"But right now we don't." 

Atlanta-based Portman Holdings is working with the city on the development project and has been participating in discussions as the city searches for a company to manage the facility. 

City officials have interviewed several hotel operators and could announce a formal agreement with one of them within 60 days. 

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(c) 2002, Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News.