Aug. 21, 2003 - VANCOUVER, Wash.- A proposed downtown hotel won't make nearly as much money as the city expects, according to a feasibility study released Wednesday by a consultant working for Clark County hotel operators opposed to the project.

The hoteliers' study focused on the $71.2 million project's first 10 years. Its conclusion sharply differed from those of the city's consultant.

The hotel and its adjoining conference center would generate only enough money to pay debt service on city-issued bonds, but would not make enough to pay bonds purchased by the builder and hotel operator, according to the study produced by Jinneman, Kennedy & Mohn, a hospitality consultant in the Puget Sound area.

Furthermore, the study says, Clark County government should not expect payback for the nearly $700,000 a year it will invest.

Also, the city is in error as it plans for extra money to contribute to funds created to support the long-term project's viability.

City officials should at least take a look at the hoteliers' study and test its conclusions so they will better understand another perspective of the proposed project, said Tom Kennedy, principal with Jinneman, Kennedy & Mohn.

"We're encouraging them to plug our numbers into their model," Kennedy said.

Steve Burdick, the city economic development director who has overseen the project, said he has not seen the study, but "we will review it."

The city's consultant, Stephen Walker of HVS International in Boulder, Colo., said he also had not seen the study. He stood by his conclusions.

"I would be interested to see their support for a really negative outlook for Vancouver," Walker said. "It seems like most indicators seemed to point to a more healthy outlook."

The city proposes building a 225-room, seven-floor hotel and a 30,000-square-foot conference center on the south side of Esther Short Park at Columbia and Sixth Streets.

The project awaits a decision by Hilton Hotels on Sept. 8 whether it will be the project operator. The proposed agreement also calls for Hilton to purchase bonds and be a minority owner.

Hilton is conducting its own performance analysis. Earlier this year, Marriott International conducted a feasibility study and withdrew as the potential operator without explaining its decision.

The city's and the hoteliers' studies differed sharply on occupancy and room rate projections.

By 2008, the HVS study presumes a 74 percent occupancy and a $121.84 average room rate for the proposed hotel. Kennedy's study forecast a 67 percent occupancy and $105.75 average room rate.

"We went into this trying to give (the downtown project) every benefit and give them a nonpartial point of view," Kennedy said.

The association has opposed the hotel and conference center, saying it amounts to unfair subsidized competition during challenging economic times. Hotel operators had supported a proposed 6,500-seat special events center and convention center -- which would have been built with public money until the city dropped the idea in June 2002.

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