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Judge: Headquarters Hotel challenge can continue

by: COURTESY OF METRO - Artisit's rendering of proposed Headquarters Hotel.The long legal battle over Metro's plan to build a headquarters hotel next to the Oregon Convention Center took another twist Monday.

Clackamas County Circuit Judge James Tait dismissed a motion by Metro to transfer a lawsuit against the hotel before him to Multnomah County Circuit Court, where Metro has moved to consolidate all of the legal challenges to the project.

Judge Tait did not rule on the merits of case, which argues Metro does not have the legal authority to issue bonds to help fund the project without submitting the bond sale to its voters. But the decision will allow the case to proceed in Clackamas County.

In addition to the Clackamas and Multnomah County proceedings, the Oregon Court of Appeals is considering the appeal of a Multnomah County Circuit Court ruling that another financing mechanism for the project cannot be referred to the ballot. It was a vote by the Multnomah County Commission to allow transient lodging taxes collected a the hotel to be dedicated to paying off the Metro bonds. A Multnomah County Court judge ruled that the vote as an administrative action that cannot be referred to the ballot after opponents had collected what they claim are enough Metro voter signatures to do so.

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 $197.5 million. Mortenson has agreed to pay $119.5 million of the cost. The next largest contribution would be $60 million in bonds issued by Metro. The remaining $18 million would come from loans and grants by Metro, the Portland Development Commission and the Oregon Lottery.

The main opponent is the Coalition for Fair Budget Priorities, a group of Portland-area hotel owners, which includes Provenance Hotels, the Hilton Portland & Executive Tower and members of the Asian American Hotel Owners Association. The plaintiff in the Clackamas County case is Paige Richardson, a political consultant who works for the group.

In response to Monday's ruling, Sandkeep Kaushink, a spokesman for the coalition, issued the following statement:

“Today’s decision by Judge Tait is a first step to ensure that all voters in Metro’s jurisdiction, including those in Clackamas and Washington Counties, will have an equal voice under the law.

“There is no good reason why our Clackamas case, which was filed long before Metro initiated its validation proceeding in Multnomah County, should take a back seat to Metro’s preferred legal venue. The judge was persuaded by our arguments that allowing this Clackamas case to proceed will likely lead to a swifter resolution of the legal issues at hand, and will also provide the Coalition with an opportunity for preemptive legal action if Metro tries to do an end run around the legal process by signing contracts obligating Metro to issue bonds to construct the hotel.

“We continue to ask for one thing only: that the people get the opportunity to make the final decision about this hotel deal. Metro could end these legal proceedings today by simply agreeing to put this important matter to a public vote, but they refuse to do so, instead wasting thousands of dollars of the public’s money trying to block a vote. The reason why is obvious. They know their flawed agreement, if subjected to public scrutiny, would be rejected by the voters.”

The coalition has also filed a motion objecting to Metro's effort to consolidate the legal challenges in Multnomah County under a rarely used state "validation" law that governments can use to resolve all legal challenges to their actions at once.