Aug. 19, 2006 - One of the Dallas Convention Center's largest scheduled events may bolt to another city because of delays in the creation of a 1,000-room hotel attached to the facility.

It remains "very, very questionable" whether the Dallas-based American Heart Association, which is scheduled to hold its national convention here in 2009, will actually do so, Dallas Convention and Event Services director Frank Poe said Friday. The organization's contract stipulates that Dallas must be operating an attached convention center hotel by summer 2009.

The heart association convention is expected to attract between 33,000 and 35,000 delegates and generate an estimated economic boost of $107 million.

"We're running out of time," said Phillip Jones, chief executive of the Dallas Convention & Visitors Bureau. "We run the risk of them moving their meeting to another city."

Said Mr. Poe: "They're assessing their options now, and they're going to monitor our progress."

A spokeswoman for the American Heart Association declined to comment.

Nearly two years have passed since Dallas unveiled plans for a city-subsidized convention center hotel, which Mayor Laura Miller last year called a "No. 1 priority for downtown."

The possibility of losing such a large convention underscores a sense of immediacy that some city and convention officials say they feel to quickly close a deal with Dallas-based Woodbine Development Corp., which City Hall has tapped to construct a Marriott-run convention center hotel.

The absence of such a hotel makes Dallas a less-attractive destination for conventioneers, especially given the lavish facilities offered in such cities as Las Vegas and Orlando, Fla., according to hospitality industry experts and Dallas city leaders.

Mr. Poe and John Scovell, Woodbine's president and chief executive, say the two parties are still crunching the hotel's financing numbers and determining city incentives, especially considering recent increases in construction and building material costs.

Dallas hasn't set a cost ceiling, but a recently opened 1,200-room convention center hotel in Houston cost $285 million to build.

"American Heart is Exhibit A -- it's the type of event that the city won't be able to house without the hotel," Mr. Scovell said. "It's up to ... [City Hall] as to what's the next move. Our interest has not changed in this.

"I don't see anything out there that we're at odds over. We'd like to move this as fast as the city deems appropriate."

Mr. Poe added that "all parties are working very diligently" and that the biggest issue is going to be project financing.

"We want this to happen sooner rather than later, because this is such an important project to us," he said.

Mr. Poe said, however, that "you don't want to rush it to a point where you create future challenges for yourself."

Guarantees sought

In the last year, more than a dozen groups have said they wouldn't book a convention in Dallas without a guarantee that a hotel would be in place, Mr. Jones said.

Of the top 20 U.S. convention destinations, only Dallas doesn't have an attached hotel in place or in the works.

Dallas has hosted two major meetings industry events recently, gaining much-needed exposure among planners. Mr. Jones said he is concerned that if a deal isn't announced soon, Dallas could miss another cycle of bookings.

Building the hotel remains "a huge priority," Ms. Miller said. "It's important to have a deal by the end of the year. We're going to get a convention center hotel because the market demands it."

Hotel occupancy rates downtown plummeted below 50 percent in 2001 and remained in that range through 2003, according to PKF Consulting. Downtown hotels are expected to reach only a 60 percent occupancy level this year -- making the prospect of another major hotel to compete for business difficult to stomach for some operators.

Broader benefit

But an attached convention center hotel stands to benefit all downtown hoteliers because of the additional convention business it would drive to Dallas, said Tom Garcia, managing director of the Adolphus hotel on Main Street.

Mr. Garcia said his hotel could lose up to $800,000 in business without the American Heart Association convention, for example.

"I'm surprised it's taken so long," Mr. Garcia said.

City Hall initially proposed, and is still advocating, building the hotel in a parking lot along Griffin Street, just south of Young Street.

But at least three other hotel sites are under consideration, including land south of the convention center, atop nearby Reunion Arena's parking garage and even where sparsely used Reunion Arena now stands, city officials say.

"It'd be a great addition, because people look for convenience and facilities when they're choosing their convention sites," said Alvin Noel, a Lake Charles, La., resident attending the Gospel Music Workshop of America Friday at the Dallas Convention Center. "A hotel right here would only enhance the experience in Dallas."

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