[Snowden352]

I am an open critic of this project, but after reading this article I find myself cheered:


Thursday, September 27, 2007 - 4:33 PM PDT
Metro delays hotel decision
Portland Business Journal

The Metro Council on Thursday delayed a decision on whether to build a headquarters hotel.

Rather, it voted to authorize the creation of a financing plan for the potential development of a 600-room publicly owned, privately operated headquarters hotel near the Oregon Convention Center.

The seven-member council unanimously agreed to ask hotel supporters to commit to the project and indicated it wants a financial plan that will prevent tax dollars from ever supporting the multimillion dollar project.

The council unanimously approved plans to solicit political and financial support from other public agencies as well as private supporters. It also directed its underwriter and financial counselors, Piper Jaffray and Seattle Northwest Securities, to create financing plans, one of which must include hold-harmless language protecting Metro taxpayers from being forced to bail out the hotel if it fails to meet revenue expectations.

Supporters want the hotel to complete the convention center, which consultants say loses business because meeting and convention organizers want large blocks of hotel rooms available on site or nearby. With no private developer willing to build such a hotel on its own, Metro is being asked to construct a publicly-owned, privately operated hotel.

The hotel would be built with financial support from partners as well as proceeds from bonds. Bonds would be repaid with revenues generated by the hotel. But the Metro Council indicated it wants assurances that bonds will never be paid with tax revenues, even if hotel revenues fall short.

One way to hold taxpayers harmless is to not pledge the full faith and credit of Metro's tax base to the bonds.

Without that kind of government guarantee, the hotel revenue bonds would be riskier and carry higher interest rates. The developer could be required to insure against a default. Higher interest rates and added insurance requirements would raise the cost to construct the hotel.

Councilman Robert Liberty said he will only support a financial plan that includes language holding taxpayers harmless for an inherently risky project.

"It's clear to me that we're in a highly competitive convention business and a lot of capacity is being added around the country," he said, referring to hotel-building activities in cities that compete for convention business.

Liberty said the risk that the hotel won't meet financial expectations should fall on those who most benefit from its construction.

The headquarters hotel returns to the Metro agenda in early November, when the council will consider terms of a development agreement

In the interim, councilors want hotel supporters to commit their political and financial support.

"The success of the plan depends on commitments from partners we don't have yet," said Councilman Carl Hosticka.

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