|By Anna M. Tinsley, Fort Worth Star-Telegram, Texas|
Knight Ridder/Tribune Business News
Mar. 10, 2005 - FORT WORTH -- After months of negotiations, city leaders say they've hammered out the final details for Omni Hotels to build a 600-room luxury hotel downtown -- and construction could start by the end of the year.
For more than seven months, the city and Omni have been negotiating over a privately owned, Texas-themed hotel across from the Fort Worth Convention Center. The plan includes nearly $50 million in public money. The overall cost is projected to be more than $90 million.
"This is going to light up the south end of downtown," Mayor Mike Moncrief said. "It will provide more opportunities to attract larger conventions.
"There are some city incentives, but this will be a privately built hotel," he said. "The city is not getting into the hotel business, nor should it."
The final proposal -- which includes an underground garage and possibly condominiums on top of the hotel -- will be presented publicly during a City Council meeting March 24.
Council members could vote on the deal by March 29, and if they approve, Omni could break ground by the end of the year, officials said.
The plan calls for about $48.5 million in tax rebates and refunds from the city, county and state and $6 million for a city-built, 400-space parking garage.
"We are coming to Fort Worth because we believe it's a great American city and a place we want to do business," said Scott Johnson, Omni's vice president for acquisitions and development. "We're ecstatic about the progress we've made.
"It has been a long road, and we are anxious to kick this project off."
In the works for more than two years, this plan differs from one in 2002 that called for the city to build a hotel with taxpayer money. Public outrage and a petition drive to force the issue before voters quelled that plan.
City leaders say this version is better because the bulk of the public funds would come from hotel and sales taxes generated by the hotel.
Johnson said that it could take about two years to build the hotel -- of "four-diamond" quality -- and that it could open in late 2007 or early 2008.
Omni plans to build a 15-to 21-story hotel, with 48,000 square feet of meeting space, two restaurants, a pool and an exercise facility on two blocks of city-owned land west of the convention center.
Omni would lease the site from the city for $10,000 a year for 99 years and could buy the land for $1 million after 10 years. It could sell the hotel after three years of operation, with city approval.
"This hotel is so important for the convention and tourism industry in Fort Worth," said Kirk Slaughter, the city's public events director. "It will really help attract business to the community.
"It is going to be a great addition to Fort Worth."
Under the plan, city officials say Omni would receive:
--$29.8 million in city rebates and funding, mainly through hotel and sales taxes collected at the hotel over 10 years. This includes $6 million for a 400-space garage to go under the hotel and be paid for with reserve funds. Previous plans called for an above-ground garage that would have been shared by the city and Omni.
--$16.9 million in state rebates from hotel and sales taxes generated by the hotel in its first 10 years.
--$1.8 million in refunded county property taxes generated by the hotel in its first 10 years. No school taxes would be used.
--A 10-year catering contract for convention center events.
In return, Omni would be required to award a portion of its contracts to minority- and women-owned businesses and a share of new jobs to Fort Worth residents. As much as 80 percent of the hotel rooms could be set aside for future conventions.
Johnson said a decision on whether to include condos at the top of the hotel will be made in coming months.
"We're doing our due diligence on that now, studying the market," Johnson said. "We believe that condominiums on top of our hotel would be a great addition. Now we need to figure out if there's a market for it."
Assistant City Manager Joe Paniagua said any condos would add to the total $90 million cost and would not receive a tax abatement from the city.
City officials have long said a hotel is needed because, despite a $75 million renovation of the convention center, Fort Worth is losing convention business to other cities.
"We have everything the people of Texas, United States and around the world would want to come and see," Councilman Jim Lane said. "We upgraded the convention center, and now we need a convention center hotel.
"There are good hotels downtown, but not one really dedicated to the convention business," he said. "This hotel will be a great amenity for Fort Worth."
Not everyone is convinced.
Stan Kennedy, vice president and general manager for the Radisson Plaza Hotel, said he's concerned that a convention center hotel could strip business from other downtown hotels.
"Our concern is, can the existing market take on additional supply without increased demand?" he said. "Short-term, this is going to have a negative effect on all the hotels here.
"It's our hope that long-term, we can fill in with new business."
Omni officials said they believe such fears are unfounded.
"We don't feel that we're going to be picking off business from the current market," said Robert Rowling, owner of TRT Holdings, Omni's parent company. "Whatever we take away, we hope would be more than made up from new business brought to town."
Steve Hollern, a vocal opponent to the 2002 plan, served on a blue-ribbon committee that reviewed the proposal. He maintained through the process that a privately financed hotel would be best.
"I think this is far superior to the plan on the table two years ago," he said. "I still have a nagging worry that if we don't grow the room nights, it could hurt other hotels.
"I hope my concerns are not well-founded," Hollern said. "I hope we get the tourism we're shooting for. It's a necessary thing that we go forward on this."
Paniagua said the past few months have been spent negotiating the finer points of the deal.
But it was time well spent, Paniagua said, because he believes that this is a good deal for the city.
"If the hotel has a rough year, the city still doesn't put any additional money into it," he said. "We don't bear any of the financial risk."
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Copyright (c) 2005, Fort Worth Star-Telegram, Texas
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