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Hotel opponents unveil new strategy

by: COURTESY OF METRO - Artist's rendition of proposed Headquarters Hotel.Local hotel owners opposed to Metro's proposal to build a Headquarters Hotel near the Oregon Convention Center are threatening to tax it and all new hotels with public subsidies.

The opposing hotel owners unveiled their plan during the public hearing held on the financing and development agreement for the proposed Headquarters Hotel before the Metro Council on Thursday. The council is expected to vote in the agreeements next Thursday.

None of the opposing hotel owners testified personally. But Michele Rossolo, a political consulant hired by the opponents, said they were considering an initiative petition to put a measure on the ballot that would require all new hotels with public subsidies to be taxed $5 million a year.

"Our initiative will require that hotels receiving large public subsidies will be required to pay a tax of at least $5 million per year which must be paid prior to bond payments, and the proceeds of that tax will be dedicated to funding specified public benefits. The purpose of this initiative would be to guarantee the community direct benefit if large public subsidies are granted to a hotel, unlike the current deal under discussion," said Rossolo, who works for the Coalition for Fair Budget Priorities. It includes Provenance Hotels, the Hilton Portland & Executive Tower and members of the Asian American Hotel Owners Association.

Rossolo said the initiative will be launched if the Oregon Court of appeals denies the opponents previous effort to refer the financing plan for the Headquarters Hotel to the ballot. A Multnomah County Circuit Court judge blocked that effort, ruling the financing plan was an administrative matter that cannot be referred to the ballot.

Metro has been working for nearly two decades to put a 600-room hotel near the Oregon Convention Center, which is owned and operated by the regional government. After several false starts, the elected Metro Council has approved entering into a contract to have such a hotel built by developer Mortenson Construction of Minneapolis. The Hyatt Hotel chain would buy and operate the hotel when the project is completed.

The project budget is around $212 million. Under the current financing plan, $60 million will be paid by bonds issued by Metro and $18 million will come from loans and grants by Metro, the Portland Development Commission and the Oregon Lottery. The rest of the project will be paid by Mortenson.

In addition to trying to refer the financing plan to the ballot, the opposing hotel owners have challenged metro's legal authority to issue bonds for the project in Clackamas County Circuit Court. Metro is trying to concentrate all other legal challenges in Multnomah County Circuit Court.