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Hotel plan heads to City Council

The City Council will consider partnering with Metro on its Headquarters Hotel project on Wednesday.

The council will consider a resolution authorizing Mayor Charlie Hales to sign an agreement with Metro to construct of a 600-room hotel adjacent to the Oregon Convention Center, which Metro owns and operates.

The council will also consider amending an existing Intergovernmental Agreement with Metro and Multnomah County Commission to help finance the project. One proposed change would dedicate the county lodging tax from the hotel to paying back a Metro-issued bond for the project.

The total project budget is around $198 million. The bond will generator $60 million. The developer has pledged $119.5 million to the project. The 2013 Oregon Legislature approved $10 million in state Lottery Funds for it. Portland and Metro have each identified $4 million to complete the financing package.

Metro argues the hotel is needed to attract additional national conventions to the center. The regional government has commissioned studies which say some conventions are bypassing Portland because it does not have a hotel with additional convention-relatred amenities next to the center.

Some local hotel owners oppose the project. They released an open letter to Hales and the council on Friday saying Metro's analysis is flawed.

"Prior to taking this vote, we urge you to dig deeper, examine the facts upon which Metro has based its assertions and carefully examine whether construction of this hotel, as is currently proposed, will in fact solve the problems it is being built to solve. We believe that upon a closer look you too will conclude, as have we, that this deal is highly flawed, will not solve the stated problem given its presently proposed financial structure and size, and will actually threaten existing jobs during the slow winter occupancy months," reads the letter from the Coalition for Fair Budget Priorities.

Metro had previously considered but rejected a plan to build a publicly-owned hotel next to the center. The council resolution says the proposed hotel will be privately owned and no public funds are committed to its operation.

"The OCC Hotel Project will be manned with the private operator accepting all operational risk and responsibility, with no commitment of public resources in any way to support hotel operations," it reads.

Other proposed changes to the IGA would provide the city with an additional $500,000 a year for tourism promotion.

The county commission must also amend the IGA for the project to proceed. Commissioner Loretta Smith said a majority of the commission supports the amendment last week.