News for the Hospitality Executive
|By Anna M. Tinsley, Fort Worth Star-Telegram, Texas
Knight Ridder/Tribune Business News
Dec. 3, 2003 - FORT WORTH, Texas--City leaders agreed Tuesday to formally negotiate with two companies -- Austin Commercial and Omni Hotels -- to develop a luxury, 400-room or larger convention center hotel downtown.
Now the clock starts ticking.
The city has 90 days to negotiate with both companies over everything from number and quality of rooms to the amount of required public participation.
If they can't reach a deal during that time, they'll go back to the drawing board with other developers that submitted proposals.
"We have two finalists in an extensive competition to determine what this city expects from the proposals submitted," Mayor Mike Moncrief said. "It's time to get down to serious negotiations and make some decisions."
This is the latest development in a process to determine whether the city should build, or find a partner to build, a downtown convention center hotel.
Officials have long said a headquarters hotel is needed because the city is losing convention business to other cities, despite a $75 million renovation of the Fort Worth Convention Center.
City Council members voted unanimously Tuesday to move forward with negotiations at the recommendation of a committee that interviewed the top four developers behind closed doors last month.
"I think by the end of the 90 days, we'll have an with one of those groups," said Councilwoman Wendy Davis, who heads the committee.
The two proposals now being considered would be luxury facilities with different types of financing.
Omni Hotels of Irving proposes building a hotel through a mostly private partnership in which the developer would own the hotel and take the bulk of the financial risk. But the city would pay for a parking structure and could use sales tax, hotel-motel tax or property taxes to help defray some hotel costs.
Omni is proposing a 21-story, 600-room hotel with about 50,000 square feet of dedicated meeting space. The plan includes a grand ballroom and a junior ballroom, and the guest-room amenities would be considered four diamond, said Scott Johnson, vice president of acquisitions and development for Omni.
The company has not yet identified partners for the project but would work with the city, if selected, to find an architect, designer and general contractor, Johnson said.
"We will have all the amenities and features needed to make it the finest hotel in Fort Worth," Johnson said.
Austin Commercial proposes building a city-owned hotel that would probably be financed with revenue bonds, which don't use sales or property taxes to repay debt.
Austin Commercial, which oversaw renovations at the convention center, has indicated that it would work with Hilton Hotels for an 18-story, 560-room hotel that would include ballrooms, meeting space and a full-service concierge.
Guest-room amenities would be considered three- to four-star, said Ralph Cook, a senior project manager for Austin Commercial. The company has indicated that it would partner with local consultant Gideon Toal, The Projects Group and Hellmuth, Obata Kassabaum.
Cook said he believes that a convention center hotel would greatly help Fort Worth.
"This is the right way to go," he said. "It maximizes the investment in the convention center."
City staff sought hotel proposals this summer and received nine. City consultants and elected leaders reviewed the proposals and narrowed the list to four last month.
The council's revitalization and economic development committee narrowed the list to Omni and Austin Commercial. Also making the top four were Hines in Dallas and Stormont Hospitality Group in Atlanta.
The city last considered building a hotel with a private developer in 2001 but changed course the next year with plans to build a city-owned hotel financed with the sale of certificates of obligation.
That proposal was tabled after a petition drive against it would have forced the issue to be decided by voters. Officials have said that neither of the recent proposals would be financed by certificates of obligation.
A blue-ribbon committee studying the issue this year recommended that the city's portion of any hotel project be funded by selling revenue bonds. The bonds would use hotel profits and a share of the hotel-motel tax to repay the debt.
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(c) 2003, Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News.