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The Portland Planning Commission on Tuesday voted unanimously to allow public money to pay for a not-yet-built convention center hotel, pending City Council approval.
The commission passed the 16th amendment to the Oregon Convention Center urban renewal plan, clarifying that lodging- and tourism-related public buildings be eligible to receive public money.
The Oregon Convention Center plan, drafted in 1989, identified a convention center hotel as its top goal for increasing economic vitality in the Lloyd District. Eighteen years later, the convention center is still without a hotel.
The amendment, if approved by City Council, would allow regional government Metro and the Portland Development Commission to use public money, including tax-increment financing, to close a $70 million to $90 million gap the PDC said is present in a private financing structure. The estimated cost to build the hotel stands at $150 million.
Planning Commissioner Catherine Ciarlo said she doubted the PDC and Metro could come up with as much as $90 million in public funds to cover the gap.
But the PDC’s Fred Warren said a public finance model would be “a completely different formula.”
“To be honest, we need to make sure that all the assumptions we made in our (public) model are good, sound assumptions,” he said. “We need to stress-test it.”
David Woolson, CEO of the Metropolitan Exposition Recreation Commission, backed Warren, saying the public financing structure “isn’t about how to plug a $70 million hole; it’s looking at the project as a whole to finance it from the beginning.”
Both admitted, however, that the agencies would be starting at square one figuring out how to raise the money to build the hotel.
The Oregon Convention Center’s Headquarters Hotel, which would be developed by Ashforth Pacific and Garfield Traub and designed by Zimmer Gunsul Frasca, would be privately run but publicly owned, Debbie Bischoff of the Portland Bureau of Planning said.
The Portland hotel market is strong, Warren said, citing a 75 percent occupancy rate. The Headquarters Hotel would bring 600 rooms and 40,000 square feet of meeting space to the Oregon Convention Center.
The hotel, Warren said, would bring in 17 new conventions per year based on analysis by national hotel consulting firm PKF Consulting.
Ray Leary, developer of Vanport Square at Northeast Martin Luther King Jr. Boulevard between Alberta and Emerson streets, came out in support of the amendment, saying it would attract private development dollars farther north where the Oregon Convention Center area bleeds into the neighborhoods surrounding Martin Luther King Jr. Boulevard.
“I’m sick and tired of us in Portland accepting a second-tier status when we are one of the major cities in this country,” he said. “It won’t make much sense for the next great city in America to not have a Headquarters Hotel.”
The Headquarters Hotel has been under Metro’s control since the PDC handed over the project’s reins in March.
If the financing doesn’t pan out, Metro will look at alternatives, such as building a smaller hotel, providing incentives for attracting convention business, or tweaking the Oregon Convention Center’s mission.