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Our Opinion: Hotel project is a good bet

The original intent of the Oregon Lottery — which was to fund projects that create jobs and economic growth — would be well served by a $12 million investment in a convention hotel in Northeast Portland.

In terms of economic payback, few projects in this state could compete with the proposed headquarters hotel next to the Oregon Convention Center. The Legislature should agree to $12 million in lottery funding to help get the long-discussed hotel moving forward.

Lottery dollars for the convention hotel would provide a small portion of the overall cost of the facility, estimated at $180 million. Metro (the regional government), which owns the convention center, has been working on the headquarters hotel concept for years, and it appears the timing is right to proceed in alliance with a private developer.

Hyatt Hotels Corp. has negotiated with Metro and other agencies for the rights to build a 600-room facility. Project developers, including Hyatt, would invest more than $100 million in the hotel. To get the hotel built, Metro also would sell another $60 million in bonds that would be repaid by the additional lodging tax revenue coming from the new hotel.

To complete the funding package, Metro and the Portland Development Commission would contribute $4 million each, and supporters of the project have asked the Legislature’s Ways and Means Subcommittee on Capital Construction for $12 million in lottery funds.

What would that $12 million bring in return?

Here’s a quick look at the project’s economic payoff:

• An estimated 2,000 construction jobs, when ground is broken next year.

• About 900 to 1,000 permanent jobs in the hotel. (For those worried about projected wages and benefits, Hyatt has agreed to a union workforce.)

• At least seven to 10 additional conventions brought into Portland per year.

• Another $120 million in annual economic activity — beyond the $450 million already generated by the convention center each year.

A headquarters hotel would satisfy a basic requirement for many national conventions, which bypass Portland for other cities that have hotels connected to their convention centers. Planners for these larger and more lucrative conventions say they would be more likely to choose Portland if this city had a comparable facility.

When those larger conventions start to book in Portland, the return on the state’s investment could be immediate. Within two to three years, the state’s initial $12 million investment would be repaid by new income taxes coming from convention-related jobs. From that point forward, the state’s coffers would benefit, while Portland’s tourism economy would be lifted to a new competitive level.