Q&A: A conversation with Gregg Mindt
The lodging lobbyist stands alone as a critic of the HQ Hotel
POSTED: 06:00 AM PDT Friday, September 14, 2007
BY LIBBY TUCKER
After decades of talk about building a headquarters hotel for the Oregon Convention Center, Portland took a step toward action Wednesday.
The Metropolitan Exposition and Recreation Commission, which manages the Oregon Convention Center for Metro, voted unanimously to support a publicly owned and privately financed hotel.
Developers, labor representatives and city officials lined up to praise the proposal and the commission’s progress.
But Gregg Mindt, a lobbyist for the hotel industry, criticized the project, even as he voiced his support for MERC’s resolution to further study a headquarters hotel’s financial feasibility. The hotel industry says a publicly owned headquarters hotel would unfairly compete for visitors with private hotels.
They want Metro to guarantee hotel tax money will not be used to finance the hotel’s construction or its operations. And they want a greater portion of hotel tax dollars to go toward tourism and marketing efforts by the Portland Oregon Visitors Association.
DJC: You in the past have been against the headquarters hotel proposal. But today you supported MERC’s resolution. Why?
Gregg Mindt: Originally the Tri-County Lodging Association was opposed to any publicly owned facility and the discussion (was) at a 400-room level. But clearly the data and the information shows that a 600-room is the number that gets the room block that best serves the convention center. And most data is showing that a privately owned hotel is difficult to achieve in this kind of environment for a headquarters hotel.
We still have concerns for a headquarters hotel, but we really want to be at the table to see if it’s the right thing for the convention center, the city and the region before we say absolutely not. We want to be in the dialogue rather than say no.
All the data has shown there will be an impact on the industry in the short term. We’re trying to say, How can we minimize that impact on the market and how do we get this broader discussion?
DJC: Was it the additional research that changed your mind? Or has it been the discussion?
Mindt: I think it’s been the discussion. Probably half a dozen hotel folks were involved in PDC’s technical advisory committee, which I was included in. And it was really reviewing a lot of the data last year and eventually that was kicked over to Metro.
The issue is we understand the importance of the hotel on the facility, but we’re concerned about the impact that hotel would have. It would be the second-largest hotel in the city. You can’t put a 600-room hotel in Portland and not have it affect all the other hotels.
DJC: Wasn’t one of MERC’s recommendations to pursue a marketing strategy?
Mindt: It’s starting to enter conversation now. It really hasn’t been in any meaningful way over the last couple of years. There’s been no talk about more dollars for marketing.
And not just to the convention center but for the leisure segment as well. So if we can market an expanded convention center with the headquarters hotel, we can market to the leisure traveler as well. The conversation starts to shift a bit, so the attention’s not purely on the hotel itself.
DJC: So it’s more if you can do something that benefits all the hotel industry and not this particular hotel, then you’re on board?
Mindt: Yeah, it’s kind of that rising tide theory. How do we benefit everybody?
POVA just doesn’t have the resources to do more. And it’s very complex, because you’ve got Metro that owns the convention center, but the city of Portland receives the lion’s share of the hotel tax that goes into the general fund. And very little goes into marketing or POVA.
In most cities, the convention center money is given away as a loss leader. And so what it is here is a very complex structure set up to have hotel tax money paid through the visitor development fund paying for the cost of the OCC to get groups to come here. So we’re already starting off at a competitive disadvantage.
DJC: The concern that you voiced was how this would be financed, through additional hotel taxes, and if that will benefit every hotel.
Mindt: When these financials come through, they’ll begin to say, We need more money to cover debt service or as a backstop. We’re saying no new taxes on the lodging industry to support that. The lodging industry won’t stomach that. We’re already doing our fair share for this facility and for lots of facilities in this area.
The other piece that’s always lost on these discussions is the hotel industry offers room rebates that go back to event planners for these events to come here. POVA will come to a hotel and say they’d like $10 or $15 per room to subsidize the cost of the event. It’s complex competitive issues.
They said, If we build the convention center, all the development will follow. It didn’t happen.
They said, Let’s build the Rose Quarter. Development didn’t follow. Now they’re saying, If you build the headquarters hotel, all the development will follow. And that’s partially true, but it’s not completely true.
Everybody has this euphoric approach that this hotel is going to solve all of our problems. And it’s still based on POVA’s ability to sell and compete against other markets and to deliver.
DJC: How should Metro proceed with this issue now that it’s being presented to them?
Mindt: At the joint MERC-Metro meeting, there was a lot of discussion about financial models. I think there was a lot of disappointment that we weren’t further along in that discussion. Now they’re saying, We need more time; we need to have $600,000 of investment to further study this to get some real numbers to look at.
There’s some disappointment from the lodging industry. A year ago the cost was $250,000 per key. That number continues to go up. I don’t know what that is now; it’s certainly more than $250,000, which is significant.
DJC: But you’re supporting it without exactly knowing the cost?
Mindt: Until we have answers based on some of our concerns, we’re not willing to support it. When we have some more clarity, then we’ll have a discussion of do we support it or not.
Our conversations with city commissioners have not been positive in getting general fund money that is hotel tax-based back into the industry. It’s been a very lukewarm discussion of that.
Let’s have a bigger discussion of how to make the whole industry grow and prosper. Right now POVA gets roughly $2.5 million in hotel tax money for marketing. We’re saying more marketing will work.
DJC: I know there likely will be a funding gap. It will be difficult to come up with the money for this project solely based on public funds. Is the hotel industry willing to pay into the construction or upfront costs of the headquarters hotel in order to receive that guarantee to put taxes back into marketing?
Mindt: No, we wouldn’t.
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