Sept. 28–The Oklahoma City Council voted Tuesday to authorize negotiations with Omni Hotels and Resorts to develop a 600-room luxury hotel adjacent to the MAPS 3 convention center.
Success in building the $235.5 million headquarters hotel to support the new convention center hinges on assembly of a public financing package that could total $85.4 million.
Public financing would be combined with $150 million brought to the project by Omni.
Another developer's proposal for a Marriott hotel projected higher development costs and lower annual gross revenue, and required $105 million in public financing.
A six-member committee including city finance officials and Councilmen Larry McAtee and David Greenwell reviewed the proposals by Omni and Marcus/Mortenson.
The selection committee recommended trying to strike a deal with Omni.
Advocates depicted the long-discussed hotel as an opportunity to further promote economic development and make the most of the convention center, promised to voters who passed MAPS 3.
Mayor Mick Cornett said the chance to invest in a new hotel should be seen as an opportunity the city "wouldn't have had if MAPS 3 hadn't passed."
"What happens if we don't?" asked Ward 6 Councilwoman Meg Salyer. "There is a big risk to a number of investments that we've made if we don't take this step forward."
Ward 4 Councilman Pete White suggested the need to assemble a financing package also presented an opportunity — to ask voters what they think of how MAPS 3 is progressing.
MAPS 3 voters gave city leaders the go-ahead in 2009 to raise an estimated $777 million for projects ranging from the convention center to sidewalks.
Projects largely were designed to foster economic growth and promote healthy, vibrant neighborhoods.
With the hotel and a separate, $37 million proposal for a parking garage and surface lot, the convention center complex is headed toward a total investment of $559.4 million.
Proceeds from the 1-cent MAPS 3 sales tax, public borrowing and subsidies captured in part from increased property values and business activity could comprise $400 million or more of the total.
Finance officials said money-raising options included increases in hotel-motel and rental-car taxes, which could only be approved by voters.
"This gives us an opportunity to go back to the people and ask them what they think," White said.
"We're talking about spending money that wasn't contemplated publicly at the time MAPS was passed," he said. "I think it's an opportunity we shouldn't pass up."
Omni proposal
Consultant Tom Morsch of PFM, the city's financial adviser, said Omni is "unique" in the hotel industry in that it designs, owns and operates its properties.
He said Omni planned to invest its own money rather than borrow to raise its $150 million stake.
Figures Morsch provided showed Omni is projecting, after four years, a 71 percent occupancy rate with an average room rate of $193 per night.
The company projects gross annual operating revenue of $56 million and net income of $18 million.
Morsch said Omni also sees opportunities for retail and restaurant business beyond the hotel clientele, thanks to the hotel's location.
At the corner of Robinson Avenue and the new Oklahoma City Boulevard, the hotel will be across from the new downtown park and a short walk from Chesapeake Arena.
Oklahoma City is stepping up to compete for convention business with cities such as Nashville, Fort Worth, Louisville, Dallas and Denver, Morsch said.
