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The Skanner It's Easy
By Helen Silvis of The Skanner News
Published: 17 August 2012

The circled land is publicly owned and could be used to site a convention center hotel. One of the developers under consideration also owns a site within a block of the convention center

The Oregon Convention Center could have brought around $35 million more into Portland's economy in 2011, but for one thing. Our city didn't have enough hotel beds close to the convention center.

We know this because Travel Portland surveyed convention decision makers to find out why they don't choose Portland. At least 30 convention organizers cited the lack of a 500-bed hotel as the number one reason they bypassed our city. Now that's likely to change, as city leaders gear up to approve a new plan for a convention center hotel.

"It was always part of the plan, but it has proved hard to achieve," says Andy Shaw, chief of staff to METRO Council President Tom Hughes. "Now we're feeling optimistic. There are still a few hurdles to get over, but we're feeling pretty optimistic."

Two proposals are currently under consideration. A Hyatt hotel has been proposed by Portland-based Schlesinger Companies, working with the Minneapolis developer Mortenson. A Sheraton hotel has been proposed by the Lloyd District developer Langley Investment Properties, working with Garfield Traub Development of Dallas, Texas.

Once the evaluation committee has made its choice, both METRO and the Portland Development Commission will vote to accept or reject the decision. The votes are scheduled for Sept. 12 (PDC) and Sept. 13 (METRO). After that Multnomah County and the City Of Portland will work with METRO and PDC to hammer out financial agreements, such as tax rebates.

"The goal is to have an agreement by December 14," Shaw said. "We'd like to have an agreement before Sam (Mayor Adams) leaves office."

The full agreement may take up to six months, however, with the goal of completing construction in 2015.

But wait. Are you feeling as if you suddenly landed in the middle of Groundhog Day? Haven't we seen this all before?

It's true. Plans for a convention center hotel have gone from optimism to obituary several times in recent years. This time will be different, Shaw says, because the economics have changed and all the key players are on board.

In 2008-2009 Eastside hoteliers were against the proposed Headquarters Hotel, because it would have been financed and owned by government. They viewed it as unfair competition that would scoop up their business.

Scott Cruikshank

This summer those hotels are full, says Scott Cruikshank, executive director of the Convention Center and a hospitality business veteran.

"Their feeling is that if a private developer comes along and builds it, that's good. That's competitive, and it will grow business for everyone over time."

The new proposals will include some public funding, such as tax credits, but developers were asked to use private funds for the project, and keep public subsidies to a minimum.

"Construction costs are down. The cost of borrowing money is low. So there are a lot of good reasons to build a hotel right now," Shaw says.

In fact, because demand for hotel beds in Portland has risen, developer Joe Weston plans to build a 320-bed hotel, the Cosmopolitan Tower, just a few blocks away from the Convention Center on Grand Avenue.

The convention center hotel project will be larger at 500 beds, and will be built even closer to the action at one of four or five identified sites. The winning proposal must conform to PDC's green building standards as well as to its workforce equity rules. In 2013-2014, people of color must make up more than 28 percent of workforce hires.

METRO already has a local hire policy, the First Opportunity Target Program, that seeks out local contractors or employees before looking outside of Northeast Portland.

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