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Proposed $90 million, 600-room Omni Hotel in Downtown
 Fort Worth Seeking City Approval; Proposal Does
 Not Use Taxpayer Funds
By Anna M. Tinsley, Fort Worth Star-Telegram, Texas
Knight Ridder/Tribune Business News

July 27, 2004 - FORT WORTH, Texas -- A $90 million, 600-room luxury hotel could be built across from the Fort Worth Convention Center by November 2007 with more than $50 million in public money.

A proposal for the privately owned, Texas-themed hotel -- in discussions for nearly a year -- calls for developer Omni Hotels of Irving to get about $47.5 million in tax rebates and refunds from the city, state and county.

In addition, the city would spend about $12.5 million to construct two parking garages, one of which would be deeded to Omni, officials said.

"We believe we have a very unique opportunity confronting us," Mayor Mike Moncrief said Monday. "This is a project that does not include city ownership or risk.

"This is the result of a lot of give-and-take," he said. "It took a lot of work to find this middle ground."

Scott Johnson, Omni's vice president for acquisitions and development, said the new hotel would bring new conventions and more jobs to downtown Fort Worth.

"It's a good deal for everybody involved," Johnson said. It's not going to be an easy venture. The hotel environment in Fort Worth isn't great right now -- room rates are low, occupancy is lagging.

"We hope this helps."

The package of recommendations will be presented to the City Council today during an 8:30 a.m. meeting at City Hall, 1000 Throckmorton St.

City leaders could vote next week on whether to move forward on a deal to build the planned 15- to 21-story hotel. Discussions have included possible condominiums on the top floor, officials said.

Final approval of the deal could come in November. If approved, the hotel could be open in about three years.

The proposal is the latest evolution of a plan that has swirled around City Hall for years. In 2002 it sparked a petition drive that would have forced the hotel issue to be decided by voters.

The difference this time, city officials say, is that the proposal does not use taxpayer funds. The public contributions would come from new hotel and sales taxes generated by the project, officials said.

"We feel we have a proposal we can go forward with and recommend to the public with our head held high," said Councilwoman Wendy Davis, chairwoman of the council's economic development committee. "We feel we have a fantastic product."

The plan calls for Omni to build a first-class hotel with 48,000 square feet of meeting space, two restaurants, a ballroom, a pool and an exercise facility on two blocks of city-owned land west of the convention center.

The deal calls for the city to lease the land to Omni for 99 years at $10,000 a year and to spend up to $300,000 to prepare the site.

Omni would have an option to buy the land for $1 million after 10 years.

Under the proposal, Omni would receive:

--More than $33 million in city and state rebates of hotel and sales taxes collected at the project over 10 years. Officials said a state contribution of $16.9 million -- approved by the state Legislature last year -- helps to make the project possible.

--Refund of a projected $7.4 million in city and county property taxes generated by the development during the first 10 years. No school taxes would be used.

--A 400-space parking garage constructed by the city. The city would also build a 600-space garage at the site for the convention center, with the two garages costing about $12.5 million, officials said.

--A 10-year catering contract for convention center events.

To receive the rebates, Omni would be required to award a portion of its contracts to minority- and women-owned businesses and a share of new jobs to Fort Worth residents, according to the proposal.

As much as 80 percent of the hotel rooms could be set aside for future conventions, officials said. Omni would be allowed to sell the hotel after three years of operation with city approval.

"There's no financial, operational risk -- no risk to the general fund," said Assistant City Manager Joe Paniagua.

In its first 20 years of operation, the hotel would bring an estimated $1.6 billion to Fort Worth and nearly $35.9 million in direct benefits to the city, county and school district, Paniagua said.

More than 300 new jobs would be created, he said.

Steve Hollern, a vocal opponent of the 2002 proposal, praised the latest plan. The previous proposal would have used $160 million in public money to build a city-owned facility.

"This time, we're putting some public money into a private venture," said Hollern, a Fort Worth accountant and former chairman of the Tarrant County Republican Party. "There are some costs to the city, but not to the same magnitude.

"I think it's a plus for the city," said Hollern, who served on a blue-ribbon committee that studied the hotel issue after the 2002 petition drive. "This will be a first-class hotel."

The city last considered building a hotel with a private developer in 2001, when officials appeared ready to negotiate a deal with Atlanta-based Portman Holdings.

City leaders changed directions, however, and appeared ready to approve a publicly funded hotel in 2002. After the petition drive, they went back to developers and asked for new proposals.

"The wheels of government do move slowly," Moncrief said. "Sometimes it takes a detour ... to make common sense."

City officials have long said a hotel is needed because, despite a $75 million renovation of the convention center, Fort Worth is losing convention business to other cities.

"This hotel is an absolute, total necessity," said Holt Hickman, a Stockyards developer and member of the convention bureau's board of directors. "We just have to have this hotel for our convention center.

"I think it's the greatest thing that can happen to our city in the near future."

-----To see more of the Fort Worth Star-Telegram, or to subscribe to the newspaper, go to

(c) 2004, Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail

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