Nov. 21, 2008 --Omni Hotels should operate Dallas' planned convention center hotel, the Dallas City Council's economic development committee recommended Thursday.

The choice of Omni over co-finalist Marriott to run the publicly owned, $500 million-plus convention hotel project hinged on the company offering Dallas a more cost-effective proposal, Assistant City Manager A.C. Gonzalez said in recommending Omni to council members.

Other factors included the company's local headquarters, reputation for quality and growing brand identity, Mr. Gonzalez said.

City staff will now begin negotiating a final operating agreement with Omni, which they plan to bring back for the economic development committee's review in January, said Frank Poe, director of Dallas convention and event services.

A final, full council vote on a hotel operator is also slated for January, Mr. Poe added.

"Each of the hotels had pluses and each of the hotels had minuses. They're both great companies," said Ron Natinsky, chairman of the economic development committee. "At the end of the day, you have to make a decision."

Dallas City Hall did not release specific deal points or financial numbers related to negotiations with either Omni or Marriott. Nor did it release either company's operation proposals.

The reason, Mr. Poe explained, is because the city has not established an operating agreement with Omni and therefore continues to consider the matter an ongoing negotiation.

Not all council members agreed with the committee's 5-1 recommendation to the full City Council.

"I don't believe we have the full value that we can get up front," said District 6 council member Steve Salazar, who voted against the Omni recommendation.

District 3 council member Dave Neumann and District 7 council member Carolyn Davis, who attended the committee meeting but do not sit on the committee, also expressed reservations about Omni. Both said they didn't have enough information from staff to make an informed decision.

"If this was a vote today, I would not be supporting it," Ms. Davis said.

At this juncture, however, most city officials and council members consider Omni's proposal better than that of Marriott, in large part because it will cost Dallas less money.

"Staff has done a tremendous job," Deputy Mayor Pro Tem Dwaine Caraway said.

"You've made a good deal on what you're trying to get for the city of Dallas," District 9 council member Sheffie Kadane said.

Omni vice president of corporate communications Caryn Kboudi said hotel executives are "extremely pleased" with the council committee's endorsement, while quickly adding that Omni and the city still have weeks worth of work ahead of a final operation agreement.

Acknowledging the concerns of several council members, Ms. Kboudi said, "We're more than happy to sit down with them at any time and talk to them about any part of the deal."

Marriott vice president of communications Roger Conner says company officials are "disappointed" with Dallas' decision, especially since Marriott has a significant presence in North Texas and "there's probably no one in the meeting-planning industry that has a stronger position than us."

Omni operates convention center hotels in Atlanta, Orlando and San Diego, and is scheduled to open a convention hotel next year in Fort Worth as well. The closest local Omni is located just across Dallas' city limits in Farmers Branch.

Aside from solidifying a hotel operation agreement, Dallas leaders are also in the midst of signing a hotel development agreement with Dallas-based Matthews Southwest -- a document that is scheduled to go before the council next month.

Meanwhile, a small group of hoteliers led by developer Harlan Crow and his top executives this month successfully petitioned Dallas government to hold a May referendum on the issue.

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