The Metro Council approved the financing and development plans for a Headquarters Hotel near the Oregon Convention Center on Thursday.
Opposing local hotel owners pledged to keep fighting the project.
The regional government approved agreements between Metro, Minneapolis-based Mortenson Development and Hyatt Hotels outlining the financing to construct a Hyatt Regency convention center hotel located directly north of the convention center. The final plan follows early commitments by Metro to rely on the private sector to shoulder the burden of costs and risks during construction and operation.
Initial project costs are $212 million. The budget consists of more than $130 million in private financing, $18 million in direct public investment and the issuance of $60 million in revenue bonds that will be repaid by lodging tax revenues generated by the new hotels visitors.
When we set out over two years ago to find a private sector partner to invest in our community, we pledged to limit costs and maximize benefits for the public, Metro Council President Tom Hughes said of the vote. This plan achieves those original goals, targets strategic investments in our states tourism economy and promises generous returns for many years to come.
In response, the Coalition for Fair Budget Priorities, which is comprised of local hotel owners, issued a statement which said, The Metro Council vote today was as disappointing as it was predictable. We have know for more than a year that Metro intends to push forward this misguided deal no matter how high the risks are for the public, and they simply confirmed the obvious today."
The coalition has attempted to block construction of the hotel by referring the financing plan to the ballot and filed a lawsuit in Clackamas County Circuit Court, so far without success.
The coalition is also threatening to finance an initiative campaign to impose a tax on any new hotel project with public subsidies.
One way or another, the public will have the final say on this risky sweetheart deal, and if it does go forward we will ensure that the public has the opportunity to require that the public receives a direct benefit from the subsidy arrangement Metro has authorized, the statement continued.
Construction of the hotel is scheduled to begin in the summer of 2015, with the opening set for the fall of 2017.