Oct. 9, 2003 - RALEIGH, N.C.--The city Wednesday dropped local hotelier Bob Winston from consideration to build a 450-room property on city land next to a proposed convention center downtown. 

Winston said the reason he's out is simple: He doesn't think the deal can be done if the city only provides incentives in the range of $20 million, which is one of the financing assumptions about the convention center project. 

The overall plan calls for a $180 million convention center next to an $80 million hotel on the south end of downtown, an idea that has momentum but has not yet received final go-aheads from city or county elected officials. 

Hotel and meal taxes would pay for the convention center and part of the hotel. 

The question for elected leaders has been how much the city would have to contribute to the hotel portion, seen as critical because meeting planners want lots of rooms near events they book. 

The city's latest plans call for no more than $20 million going toward the hotel part of the deal. 

"But it's going to take $35 million to $50 million," said Winston, president and chief executive officer of Winston Hotels, which builds mid-range properties such as Hampton and Comfort inns. "We took a very blunt, very straight forward approach. And we looked at the numbers and looked at what the city wants to do and what the public and the politicians can support, and we saw a big problem." 

Winston was a member of the appointed steering group that recommended building a hotel and convention center downtown. He had said early on that he wouldn't make an offer to build the hotel, then changed his mind. 

Winston said the city will have to offer more than just parking, land and meeting-room space -- the types of incentives discussed as possible to lure the hotel -- to get anything done. 

"There's going to have to be other under-the-table incentives," he said. "That's my opinion. We could be dead wrong. And the city disagrees with me. But we went straight at it." 

He said the gap is the result of a city desire for a three- or four-star property that stands apart from the convention center. 

Winston said the predicted profit on the proposed hotel, which would charge an average of $110 per night, simply won't support a $60 million investment. 

City Manager Russell Allen said he didn't recall that level of discussion with Winston. And, he said, the incentive amount hasn't been a focus as the city seeks developers for the hotel project. 

"Our process has been to include, not exclude," he said. "We've been looking at the teams with the best vision, the best financing team, the best understanding of the project." 

On Wednesday, the city also cut an Austin, Texas, group -- FaulknerUSA -- that sought to develop the hotel. 

That leaves three groups in the mix: 

--A partnership of Marriott International with local hoteliers Summitt Hospitality Group and Davidson and Jones Hotel Corp. 

--Stormont Noble Development of Atlanta, which has developed convention Marriotts in Norfolk, Va., and Wichita, Kan. 

--A team that includes Trammell Crow of Raleigh and Garfield Traub of Dallas. 

Winston said he thought his honesty might have hurt his proposal. 

"We could have tried to win the beauty contest," he said. "We could have said what they wanted to hear and then worked it out later. Everybody thinks this deal is going to have to change. They're banking on that. But we were up front." 

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(c) 2003, The Philadelphia Inquirer. Distributed by Knight Ridder/Tribune Business News. MAR,