Jul. 1, 2003 - Denver Mayor Wellington Webb tossed a shovel of dirt on Monday to break ground on a $354.8 million, 1,100-room Hyatt hotel and buried a decade of battles over constructing a new downtown hotel. 

The ceremony -- on a dirt patch carved out of an asphalt parking lot across the street from the Colorado Convention Center -- ended years of union spats and court fights, financing woes and site searches. 

The event caps Webb's 12-year mayoral tenure with a hard-won economic-development victory that began paying dividends immediately with the signing of two conventions that promise to bring $33 million worth of business to the city in the years ahead. 

The Society of Cable Telecommunications Engineers on Monday announced plans to bring a 9,000-person conference to the city in June 2006, while the Denver-based American Water Works Association said it will host a 12,000-delegate meeting here in 2013. 

Both groups said they wouldn't come to Denver unless the city built the new hotel -- a 37-story tower that will jut from the block bounded by 14th, 15th, California and Welton streets. Construction is expected to be completed by December 2005. 

"It doesn't make sense to build a convention center if you don't have beds to put people in," Webb said. "I said to someone it's like building a new football stadium with no seats in it." 

The two conventions are a tiny portion of the overall flood of money the hotel is expected to bring to the city. 

Rich Grant, spokesman for the Denver Metro Convention & Visitors Bureau, said the group estimates that 54 groups representing $710 million in convention business plan to come to Denver between 2006 and 2010. 

The convention business currently generates about $190 million to $200 million in spending per year -- the costs of hotel rooms, car rentals and other traveler expenses, Grant said. 

The new hotel is expected to boost that spending by about $100 million per year. 

Some City Council members challenged several aspects of the city's plan to build a hotel -- ranging from closed-door committee meetings to using the city's tax-exempt status to issue bonds. 

The city created a nonprofit affiliate, the Denver Convention Center Hotel Authority, which issued $354.8 million in bonds last month. Those bonds are to be repaid with revenues from the hotel. 

Even as Webb and a half-dozen other dignitaries tossed dirt with chrome-plated shovels, one major question still lingered: Can the hotel meet its projections? 

Under current projections, the city expects that a new hotel will charge an average rate of $155 per night and fill 62 percent of its rooms during its first year of operation in 2006 . 

Current projections call for the hotel to fill 75 percent of its rooms and charge an average rate of $180 per night by 2009. 

Since 2001, businesses have cut travel budgets to cope with a sluggish economy and some vacationers cut back on their trips after the terrorist attacks in September 2001. 

As a result, hotel occupancy and room rates have been in decline. Downtown hotel rooms were filled 64.7 percent of the time in 2002 while charging an average nightly room rate of $114.75, according to Denver-based Horwath Hospitality Advisors LLC/Montgomery & Associates. 

Eugene Dilbeck, president of the convention bureau, said the hotel will help other hotels raise their rates by attracting more business to the city. 

"That's a legitimate worry if there is not any incremental new business coming to town," Dilbeck said. 

"It's our opinion, this hotel will actually help other hotels raise rates." 

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(c) 2003, The Denver Post. Distributed by Knight Ridder/Tribune Business News.