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Palm Beach County, Florida Endorses $27 million for Long-Stalled
Hilton Convention Center Hotel

By Andy Reid, Sun Sentinel, Fort Lauderdale, Fla.McClatchy-Tribune Regional News

July 25, 2012--A $27 million taxpayer boost could jump start Palm Beach County's convention center hotel development deal, plagued by construction delays and corruption scandals.

Business leaders and county officials for years have pushed to build a hotel next to the convention center in downtown West Palm Beach in the hopes of luring more conferences and other tourist-attracting events.

After years of stops and starts, the County Commission on Tuesday gave initial approval to an updated hotel development deal with The Related Companies, led by Miami Dolphins owner Steve Ross. The commission also recommitted to the $27 million subsidy proposed a year ago.

The latest version of the deal calls for Related to coordinate building a 400-room Hilton hotel along with a parking garage on the south side of Okeechobee Avenue, across from the City Place shopping center in West Palm Beach.

The hotel would rise from about 3 acres that already cost taxpayers $10 million.

Taxpayers would be on the hook for the $27 million subsidy, with Related responsible for about $70 million of the deal. In addition, countywide taxes on hotel stays would continue to provide a $1 million a year subsidy for convention center operations.

Hotel proponents contend that adding $27 million to county debts during a time of budget cuts and flat-lined tax revenues will be worth the long-term economic development return.

"We are looking forward to getting the shovels in the ground and the doors open," County Commissioner Paulette Burdick said.

Business leaders warned that without a "headquarters hotel," Palm Beach County would keep losing convention business to Nashville, Fort Lauderdale and other cities that can offer event planners more convenience.

"This project is critical," said Dennis Grady, Chamber of Commerce of the Palm Beaches CEO. "This project will have a significant impact on the county's economic environment."

But others question why taxpayers from Boca Raton to Jupiter should be helping pick up the tab for a hotel expected to deliver most of its economic boost to downtown West Palm Beach.

"My problem is how this if being funded," said Commissioner Steven Abrams, who represents Boca Raton and who cast the only vote against the hotel proposal. "It is the surrounding area that benefits the most."

Before moving forward, hotel developers must work out a deal with the West Palm Beach to change a long-standing requirement for the hotel to include 100 condominiums.

With West Palm Beach already dealing with a glut of empty condominiums, the city and Related will be working on an alternative to the requirement, which came from a 2005 settlement to litigation over the planned hotel site.

City officials encouraged the county to approve the deal, but raised concerns about being left out of talks.

A statement released from West Palm Beach Mayor Jeri Muoio's office Tuesday said city officials are "disappointed that the city was not brought in earlier in the process of constructing a possible deal to make this project a reality."

The deal calls for the county to retain ownership of the land and the hotel. That keeps the hotel off the property tax rolls, which benefits hotel operators at the expense of county coffers.

A hotel lease deal with CityPlace Hotel LLC could bring the county a portion of the hotel revenue, but the county's share would be capped at $1 million a year.

A previous convention center hotel construction deal stalled in 2008 and was linked to corruption scandals that toppled two county Commissioners.

Construction is expected to take a little more than two years, targeting the opening for the summer of 2015.

The county would start paying the subsidy in 2013. County officials plan to borrow the money, which will add to the more than $100 million a year taxpayers are currently stuck paying for past county debts that range from Scripps Florida to a jail expansion.

The per capita cost of paying off the county's long-term debts is about $814 per resident by the time the hotel subsidy kicks in, with the hotel accounting for $19 of that total.

"If this was such a great idea, why aren't hotels and builders clamoring to build this without $27 million of taxpayer dollars?" asked Iris Scheibl, of the Palm Beach County Taxpayer Action Board, a Tea Party spin-off group.

abreid@tribune.com, 561-228-5504 or Twitter@abreidnews.com

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(c)2012 the Sun Sentinel (Fort Lauderdale, Fla.)

Visit the Sun Sentinel (Fort Lauderdale, Fla.) at www.sun-sentinel.com

Distributed by MCT Information Services



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