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(Image is Clickable Link) by: COURTESY OF METRO - A proposed 600-room, $198 million Hyatt hotel could be constructed just north of the Oregon Convention Center if Portland's City Council and Multnomah County officials sign off on the agreement in the next week.Portland's council chamber was full Wednesday as city commissioners debated whether to sign off on a proposal for a $198 million convention center headquarters hotel.

More than three dozen people were scheduled to speak during the public comment portion of the meeting.

The Metro Council approved the financing plan last month, but the city and county still need to sign off on a new tax-sharing agreement. That agreement would allow the hotel to pay back a building loan with taxes it collects from room rentals — a deal opponents said is not fair to other hotel operators.

The proposed hotel project, which was approved Aug. 15 by Metro and awaits local government approval, would require a $120 million private investment, approval of a $60 million Metro bond, $10 million in a state grant, $4 million in a grant from Metro and a $4 million loan from the Portland Development Commission.

The Portland City Council is the last hurdle Metro Council needs to clear before Metro can begin negotiating with Hyatt Hotels. At the Wednesday meeting, Metro Council President Tom Hughes said, “Hyatt knows how to run hotels.” If they fail in Portland, he told city commissioners, it would be the first time it ever happened.

Plans to build a major hotel with at least 600 rooms just north of the Oregon Convention Center on Northeast Martin Luther King Jr. Boulevard have been in the works for more than a decade. City, county and regional officials say the new hotel would be needed to attract larger, more lucrative conventions.

Right now, with hotel space scattered around the convention center, groups attending meetings in the Rose City must stay in a handful of smaller hotels and ride MAX to the center for gatherings.

Local tourism and convention business representatives said that limits the size and number of organizations that will come to Portland. A new, larger hotel adjacent to the convention center would allow the city to pitch its venue to larger groups, the representatives say.

In the two decades since it was opened, the convention center has added about $5 billion to the region's economy, according to Metro. A 2012 study of a potential convention center hotel found that visitors attending meetings would spend more than $333 each day on a hotel and other items, such as food and entertainment.

Novick says 'no' to agreement

Later Wednesday, the City Council voted 4-1 to approve a “memorandum of understanding” that outlines the city's expectations for any final deal between Metro and the developer. The council added an amendment to that memorandum asking Hyatt to provide quarterly performance updates and financial information to a team that would include representatives from the city, county and Metro.

The idea, said City Commissioner Nick Fish, is for the city to make sure the Hyatt’s Convention Center Hotel isn’t undercutting other hotels. Commissioners fear low room rates from the subsidized Convention Center Hyatt could damage business for other hotels in town.

City Commissioner Steve Novick voted against the memo.

The vote to give official city approval takes place next Wednesday at the Portland City Council meeting. That vote would be on whether to approve changes to an intergovernmental agreement on how lodging taxes are spent. The agreement is expected to have enough votes to pass next week.

Members of Multnomah County’s Board of Commissioners also indicated they would vote to approve the same agreement during their Thursday meeting.

Reporter Kevin L. Harden contributed to this news story.

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