Convention Center hotel closer to breaking ground

Officials at Metro expect to start negotiations with developers of a convention center hotel later this month, after final approval of the hotel’s finance plan was granted by the Portland City Council and the Multnomah County board of commissioners.

The Metro Council has been laying the groundwork for several years to build a large hotel adjacent to the Oregon Convention Center, which it operates. On the table is a 600-room Grand Hyatt Regency owned by the Chicago-based Hyatt Corp. Hyatt is teaming with Mortenson Development Inc. and Schlesinger Cos. to build the hotel.

Hyatt signed a landmark neutrality agreement with UNITE HERE Local 8 last November, which means the hotel likely will be staffed with union workers. Under the agreement, UNITE HERE organizers could meet with workers at the hotel, and hold meetings there; managers would attend and make it clear that the company has no objection to workers exercising their right to unionize. Workers would be free to join a labor organization of their choosing, and could do so through a “card check” process or through a government-administered election. If workers choose to unionize, and didn’t reach agreement with management within six months over the terms of a first union contract, the contract proposals could be submitted to binding arbitration, under the labor peace agreement.

The hotel itself will be built with a union workforce. Mortenson Construction is a union general contractor, and a project “statement of principles” signed by Metro, the City of Portland, and Multnomah County seeks assurances that the developer will utilize union building tradesmen and women.

Jodi Guetzloe-Parker, executive secretary of the Columbia Pacific Building and Construction Trades Council, estimates hotel construction will generate nearly 2,000 jobs.

The projected cost is $198 million.

Financing will come from various sources. The Hyatt/ Mortensen development team will invest approximately $117 million into the project. The Oregon Legislature approved $10 million in state lottery bond proceeds; Metro will contribute $4 million using funds it has earmarked for a convention center hotel; and the Portland Development Commission will provide a $4 million loan using funds dedicated to a headquarters hotel. The final $60 million will come from a construction bond issued by Metro. The bond will be paid off using room taxes on hotel visitors.

Because  the City of Portland and Multnomah County each have a stake in visitor lodging taxes, city and county commissioners had to agree to use money in the Visitor Facilities Trust Account to pay off the bond. In exchange for issuing the tax-free bonds, Hyatt agreed to meet a number of development conditions, including having a union workforce and leaving 500 of the hotel’s 600 rooms available to future conventions.

Multnomah County commissioners voted unanimously to approve the finance plan, and the Portland City Council voted 3-1 in favor, with Commissioner Dan Saltzman absent and Commissioner Steve Novick dissenting.

The City Council added an amendment to the memorandum of understanding at the request of Commissioner Nick Fish.  The amendment requires Metro, Multnomah County, and Portland city officials to be allowed to periodically review how much Hyatt is charging for its rooms. Fish’s concern was that with the large public subsidies, the hotel could be in a position to undercut its competitors’ rates.

Metro hopes to have a development agreement finalized by the end of the year. The deal would not need approval from the city or county.

If approved, the developer would break ground early in 2014, with a tentative opening date in early 2016.

One Response to Convention Center hotel closer to breaking ground

  1. Wow…..I can’t believe Portland is going try and actually economically compete for a change. 600 rooms is actually small and most cities like Denver have 2 hotels near the convention center of 1000 rooms. Portland needs to quit being afraid of being a big city and recognize that playing with some of the bigger boys and acting like a bigger boy is very good for it. Portland will not go to hell if it grows and attracts new corporate players to the city. Portland desperately needs to expand its national profile and STOP being this obscure, hidden, and secret city. For a metro area of 2.3 Portland has such a small profile. Make no mistake about it. By being scared and unwilling to act like a big city, it has lost out on tons of economic opportunities. Every city in America has one two or three headquarters hotels. One little 600 room Hyatt is not that big a deal but to Portland it can be a difference maker. Portland as a city is overrated for its developments. The entire Central Eastside needs to be re-developed, modernized and new energy and public spaces need to be built. More modern apartments, highrise offices, more restaurants and just new modern development need to happen on the East side. this will be good for Portland.

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