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Palm Beach County Approves Controversial Taxpayer-Subsidized
West Palm Beach Convention Center Hotel Deal

By Andy Reid, Sun SentinelMcClatchy-Tribune Regional News

Oct. 31, 2012--West Palm Beach gets a new hotel, while property taxpayers countywide end up with a $27 million bill.

That's the outcome of a taxpayer-subsidized development deal, given final approval Tuesday, to finance Palm Beach County's long-sought convention center hotel.

Supporters say the hotel -- plagued by construction delays and past controversies -- is vital to making the county's convention center more attractive to events that bring tourists and help businesses countywide.

But opponents question investing public money in the deal with a private developer.

South county communities won't see the same business boost as those near the convention center, County Commissioner Steven Abrams said.

"The funding is unfair," said Abrams, the former Boca Raton mayor who Tuesday cast the only vote against the development deal. "The area that benefits the most should pay the most."

The deal calls for The Related Companies, headed by Miami Dolphins owner Steve Ross, to lead the effort to build a 400-room Hilton hotel along with a parking garage on the south side of Okeechobee Boulevard, across from the City Place shopping center in West Palm Beach.

Related would cover about $70 million of the costs. County property taxpayers would provide a $27 million subsidy. In addition, taxes on hotel stays would continue to provide a $1 million a year subsidy for convention center operations.

The 3 acres where the hotel is planned already cost taxpayers $10 million.

Construction would take about two years, with the county aiming for the hotel to open in 2015.

Having a host hotel at the convention center would allow the facility to better compete with venues in Broward County and across the country, according to supporters of the hotel deal.

Landing more conventions means more tourists, which helps all of Palm Beach County, according to Jorge Pesquera, president of the county's Convention and Visitors Bureau.

"This is what it takes to get these deals done," Pesquera said about the subsidy. "It will allow us to compete."

A prior convention center hotel development deal stalled in 2008 and was linked to corruption scandals that ousted two county commissioners.

The County Commission in July gave initial approval to the new deal, but it was on hold until the developers last week settled a legal dispute with the city of West Palm Beach.

The new settlement calls for the developers to pay the city a yearly amount equivalent to what the city would have received if the hotel was taxable. The proposed hotel is not taxable because it's going to be a county-owned facility leased to the hotel to operate.

The city agreed to give the developer rebates for the first 33 years of hotel operations, which substantially reduces the annual payments. That equates to a more than $16 million benefit to the developer, according to the county.

"This is something 18 years in the making," said County Commissioner Burt Aaronson, whose district includes southwestern Palm Beach County. "It's an economic engine driver."

On Tuesday, a majority of commissioners agreed that the public cost was worth it.

"It will pay for itself in the long run," Commissioner Priscilla Taylor said.

Abrams said he didn't object to a public subsidy for the hotel, but that taxpayers in communities getting a more direct benefit should pick up more of the costs. He likened it to a dinner party opting to split the check evenly, even though one person at the table had more to eat.

"I want a separate check," Abrams said., 561-228-5504 or Twitter@abreidnews


(c)2012 the Sun Sentinel (Fort Lauderdale, Fla.)

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