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Editorial: Hotel would bring more convention dollars

The twin spires that rise from the Oregon Convention Center do more than illuminate East Portland’s night sky. They also mark the spot where hundreds of millions of dollars enter the region’s economy, including Washington County, each year.

To keep this economic powerhouse well fueled, the region needs to take the next step toward building a headquarters hotel that will attract even larger conventions to Portland. Along with those big, national conventions, even more money will arrive. By some estimates, the convention center lost 30 large convention groups last year — and another $35 million in community spending — because it did not have an adjacent headquarters hotel.

The Metro Council looks likely to give Metro’s staff the go-ahead to negotiate with a development team that’s proposing to build a 600-room Hyatt Regency hotel (or perhaps two separate hotels totaling more than 600 rooms) on property right next to the convention center. Metro has responsibility for the convention center, and it has been talking about the need for a headquarters hotel for a decade. The proposal now under the most serious consideration was one of two competing projects to come before the council on Tuesday.

The last attempt to address the need for such a hotel died as a result of the Great Recession. Now, the economic climate has improved to the point where the concept is again viable. The question is whether the political climate also is receptive to spending public dollars to subsidize a private operation.

If residents of the Metro service area — the urbanized portions of Washington, Multnomah and Clackamas counties — give full consideration to the economic benefits of the convention center, we believe they will support a public investment. Convention organizers are passing over Portland because some conventioneers and exhibitors need the convenience other cities already are offering by having a headquarters hotel.

A headquarters hotel, with a projected cost of $157 million to $200 million, will mean construction jobs and hospitality jobs. Its true economic impact, however, will be felt in the new dollars it brings into the community with every convention landed. This money recirculates — and it reaches far beyond the city of Portland’s boundaries. The total economic impact reached $450 million in 2011, according to a Metro analysis.

As Metro seeks to push that economic benefit to the next level, it appears to be taking a sensible approach. It is considering a modest direct investment in the project as well as rebates on lodging taxes for the new hotel. Such headquarter facilities typically require some level of public subsidy because the hotel’s owners are asked to keep open large blocks of rooms for months in advance. They cannot book all their rooms as early as possible, as other hotels do.

We believe a headquarters hotel eventually will help other large hotels in the Portland area by attracting even more convention business than is possible today. We also believe the tri-county area’s general economy will benefit greatly — and that’s the most compelling reason for Metro to move forward, prudently of course, with these negotiations.