Some say new hotel is key to more conventions

Latest step in debated project is to ask Metro to build, own 600 rooms

On Thursday the Metro Council will be asked to consider building a publicly owned headquarters hotel at the Oregon Convention Center to increase convention business and spur development in the surrounding blocks.

Metro, the regional government charged with managing growth, owns the center at 777 N.E. Martin Luther King Jr. Blvd. The request will include a report on the long-stalled hotel project prepared by the staffs of the Portland Development Commission and the Metropolitan Exposition Recreation Commission, which operates the center.

The appointed MERC board of directors also will be at the meeting, scheduled for 11:30 a.m. at Metro headquarters, 600 N.E. Grand Ave.

Some downtown hotel owners and developers question whether any public subsidy is needed for such a project - and worry that too large of a headquarters hotel will create a glut of rooms and leave no money for other convention-related efforts.

No decision is expected to be made on how to proceed with the project until after the PDC board receives a similar briefing next month. Even then, a final financing package probably will not be completed until next spring.

Until last year, the PDC had studied subsidizing the construction of a privately owned and operated hotel on two blocks owned by Metro across MLK Boulevard from the center. The PDC board selected a private development firm to build and run a 400-room hotel on the site last October. At the time, the construction cost was estimated at $104 million, with $35 million coming from public sources, including $4 million in urban renewal funds.

But when Mayor Tom Potter balked at the public subsidy, the board agreed to study more options. In June, it agreed to look at a publicly owned hotel funded by Metro.

The staff report to be presented Thursday says that a series of economic studies concludes a 600-room headquarters hotel could help bring up to 25 more conventions a year to the center by 2013, creating 1,500 new jobs and pumping $104 million into the regional economy annually. Such a hotel would cost approximately $150 million to build. The report says Metro might be able to fund the construction with the regional hotel-motel taxes it would otherwise pay to Portland and Multnomah County.

The report also says the project could help achieve the goals of the Development Vision for the Oregon Convention Center Blocks, a PDC-approved redevelopment plan for the 16 blocks near the center to be submitted to the City Council for approval in November. The plan calls for the area to be developed into an entertainment district that includes new restaurants, retail stores and housing. It is supported by organizations representing the area's residents, businesses and property owners.

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