October 2, 2009 Volume 110 Number 19

Plans shelved for headquarters hotel at Oregon Convention Center

Portland Mayor Sam Adams, Multnomah County Chair Ted Wheeler, and Metro President David Bragdon released a joint statement Sept. 18 announcing that they will shelve planning for a headquarters hotel at the Oregon Convention Center.

The statement read: “We have agreed that now is not the right time to move forward with pre-development efforts to build a convention center headquarters hotel due to the current economic climate. Estimates we received of likely future revenues for the Visitor Development Initiative are not sufficient to support the project’s pre-development costs. The tourism and hospitality industries have been hit hard by the national economic recession.

“The Portland metropolitan area remains an attractive tourist destination, an important economic center for the region and a vibrant hub of the arts and cultural activities. We acknowledge and are grateful for the efforts of many individuals who have worked hard on this project.

“Job creation and economic development remain critical goals for our respective organizations, and we will continue to work together in pursuit of those objectives. The current climate requires a focus on maintaining what we have, and we will work with partners and stakeholders to develop new strategies for making the most of our existing facilities.”

Construction unions and the Oregon AFL-CIO have long-supported building a headquarters hotel in Portland, emphasizing that it would create jobs and help spark other development in the Lloyd District.

In 2005, the Portland Development Commission appointed a Headquarters Hotel Evaluation Committee to explore building a 800-room hotel. By October 2006 it was evident that no developer would build a hotel of that size without a large public subsidy.

PDC then asked Metro, the regional government that operates the convention center, Multnomah County, and the City of Portland, to help research the feasibility of a 600-room publicly-owned (by Metro), privately operated (by Starwood/Westin) headquarters hotel. Metro took the lead and in November 2007 hired Garfield Traub and Ashforth Pacific to make the evaluation. The process took longer than expected, and over the next 22 months the contract was extended four times.

During that time, construction cost estimates for the hotel were whittled from $247.5 million to $197.5 million.

More than $600,000 had been spent on the feasibility research, but Metro and its partners were now up against a Sept. 28, 2009, deadline to decide whether or not to proceed with the next step — the “pre-development phase.” This phase, which included architectural and engineering drawings, had a price tag estimated at $12 million. Around $9 million of that cost was to be repaid from lodging and rental car taxes collected by the county.

On Sept. 18, Adams, Bragdon, andWheeler met and decided to put the pre-development planning on hold.

Bragdon said he has asked his staff to present to the full Metro Council within the next 60 to 90 days an action plan “to determine a strategic plan for the region’s convention efforts and the public facilities that support these efforts.We also need to consider the political and financial framework for supporting these strategies.”

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