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After Marriott Walked Away, Hilton Commits to Operate
 $71.2 million, 225-room Hotel and 30,000 sq ft
 Conference Center in Vancouver, Washington

By Allan Brettman, The Oregonian, Portland, Ore.
Knight Ridder/Tribune Business News

Sep. 9, 2003 - VANCOUVER, Wash.--Another puzzle piece appears to be falling into place for downtown's continuing reformation, an overhaul officials hope will distinguish the city as more than just a Portland suburb.

Officials announced Monday that Hilton Hotels Finance Committee had "confirmed their commitment" to manage and operate a $71.2 million, 225-room hotel and 30,000-square-foot conference center to be built across from downtown's Esther Short Park.

City leaders and others regarded the committee's oral commitment as a solid indication that the hotel chain would participate.

"This was the last major hurdle," said Greg Williams, an executive with FaulknerUSA, the project builder based in Austin, Texas. Williams said a Hilton official contacted him Friday after the committee reached its decision.

It was a redeeming validation after Marriott International walked away this year without explanation and after plans for a 6,500-seat special events center -- in addition to a hotel and conference center -- vanished in June 2002 for lack of money.

Hilton has not signed anything, however. If all goes as planned, Hilton will have signed on and bonds will be sold next month. Construction would begin soon after, with a projected spring 2005 completion. A Hilton spokeswoman said last week the corporation would not comment until operating agreements are signed.

The hotel would join other projects that have been completed or in progress surrounding the five-acre Esther Short Park, the grassy city living room that officials have compared to Portland's Pioneer Courthouse Square. It has the added distinction of being the oldest municipal park in the Northwest.

Condominiums, offices, apartments and retail space are planned, under construction or built on all sides of the park, which the city and local benefactor George Propstra spent more than $5 million to refurbish. The buildings include a permanent home for the Vancouver Farmers Market -- in a space that has been likened to a miniature version of Pike Place Market in Seattle.

The projects add up to "a messy vitality" downtown with "a diversity of things going on," said Steve Burdick, the city manager of economic services who has overseen much of the revitalization.

The intention is to complement offerings in Portland, not compete, Mayor Royce E. Pollard said.

"This adds to the fact we're creating our own identity in this community," he said.

The conference center would open about the same time as similar projects in other parts of Washington. Burdick said he liked Vancouver's chances of competing against other cities -- such as the Tri-Cities area of Pasco, Kennewick and Richland -- among nearly 20 other communities that have some type of meeting center planned.

Much of the money for all those projects comes from a fraction of the state sales tax that the Legislature allowed communities to retain to build conference, convention and special-events centers. Clark County government also is keeping part of the sales tax with tentative plans to spend the money on the conference center.

The city plans to pay for the hotel, however, with proceeds from a hotel-motel tax, enraging local hotel operators. The Clark County Lodging Association is expected to announce today that it will sue the city over its spending plans.

Local hotel operators see the city-owned hotel as subsidized competition in a challenging hospitality market.

"We don't fault Hilton one bit," said Mark Stearns, the association president. "It's a great Christmas gift the city is giving them."

More downtown puzzle pieces are hovering.

City officials, working with the Port of Vancouver, hope to someday acquire 37.5 acres -- much of which fronts the Columbia River downstream of the Interstate Bridge -- that is owned by Boise, formerly known as Boise Cascade. As envisioned, the property could be enlivened in the same manner as the restaurant- and housing-filled area east of the Interstate Bridge.

On a more modest scale, the city owns a vacant city block adjacent to Esther Short Park but has said it won't be developed until new downtown buildings are occupied.

Burdick cautioned that Hilton, which would be called on to invest as much as $1.75 million in project equity, could still drop out. Burdick said he didn't think that scenario was likely, although the city still must negotiate operating agreements with the company.

He said Hilton's attitude is, "We don't pop the corks on the champagne bottles until the deal is done."

-----To see more of The Oregonian, or to subscribe the newspaper, go to http://www.oregonian.com

(c) 2003, The Oregonian, Portland, Ore. Distributed by Knight Ridder/Tribune Business News. HLT, MAR,

 
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