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Portland Continues 20 Year Debate Over Building a Publicly Owned
 Large Hotel Next to the Oregon Convention Center

By Ryan Frank, The Oregonian, Portland, Ore.McClatchy-Tribune Regional News

Aug. 10, 2007 - For 20 years, Portland has talked -- and talked some more -- about planting a high-rise hotel next to the Oregon Convention Center to attract more conventions of attorneys, nursery owners and stamp collectors.

Now, leaders at Portland's regional government, Metro, say they're about to make a yes-no vote on whether to build the hotel.

They say they're serious this time.

Metro officials Tuesday will host the first in a six-week series of public meetings on the hotel's fate.

Consultants are about to drop on council members' desks new studies that lay out the hotel's potential benefits. They'll use the studies to explore five options, from a 600-room hotel owned by taxpayers to simply coming up with a new, scaled-back mission for the convention center, which is managed by Metro.

This hotel, which would cost roughly $150 million to build, has garnered so much government attention because it's expected to be a driver for the regional economy. Supporters say a hotel that could accommodate large groups would attract new out-of-towners who will spend their money at Portland's restaurants and clubs while visiting, and potentially move here after falling in love with the state.

But to get that hotel, the public will have to help pay. It's not clear yet how much taxpayers would be at risk if the hotel failed and became a drain on government coffers.

Why might the public have to help build the hotel?

Convention center hotels include extra amenities, such as meeting space and ballrooms, that most business or resort hotels don't require.

"That's why the private sector doesn't want to finance it," said Rod Park, a Metro council member.

The hotel has been in the city's plans since the late 1980s.

In 2004, Portland's urban renewal agency, the Portland Development Commission, asked developers for detailed cost and design proposals. In 2005, it picked developers Ashforth Pacific of Portland and Garfield Traub Development of Dallas, Texas, to build the hotel. The commission owns property for a possible hotel near the convention center.

The city explored a privately owned hotel with public subsidies. But the size of taxpayer help required for construction -- $35 million to $90 million -- seemed more than City Hall could stomach.

Metro took over the hotel planning this year and hired its own consultants to look at a government-owned hotel that would be privately operated.

Construction would be cheaper because Metro has a top-notch bond rating and can borrow money at lower interest rates than private investors.

Tourism industry leaders have lobbied hard for a publicly owned hotel, arguing that Portland loses millions in convention spending because it lacks the hotel. But the financial and political risks behind a $150 million government-owned hotel are huge.

Some hoteliers and developers have lined up against what they see as a publicly backed competitor. Lobbyist Len Bergstein of Northwest Strategies, who's working for the hotelier group, says the convention center hotel is too risky and he calls most of the consultants' rosy forecasts "pure nonsense."

Metro Council members -- like City Hall before them -- have been doubtful so far. "I would characterize the council as being skeptical like any good steward should be," Park said.

The other options Metro will explore are:

-- A smaller, 400-room hotel, privately owned and built with taxpayer subsidies.

-- No public financing for a hotel, but increased financial incentives to attract conventions through subsidies for shuttles to more distant hotels or meals.

-- No hotel financing, but a fresh look at the convention center's long-term financial needs without a major hotel adjacent to the center.

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

Copyright (c) 2007, The Oregonian, Portland, Ore.

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