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The fate of a project to build a $197.5 million hotel near the Oregon Convention Center could become clearer this week.

Advocates are confident that a Multnomah County judge will allow the project to move forward without significant public financing plans being referred to voters.

“We’d obviously like to see the project move forward,” said Jeff Madden, Portland-based general manager of Mortenson Construction, the project’s general contractor. “We have been working for a year and a half to execute contracts, start the design process and get things moving.”

Both financial and legal hurdles have delayed negotiations on a development agreement with Mortenson, which was selected along with Hyatt as the development team in September 2012. Mortenson signed a nonbinding letter of intent in August 2013, but is still negotiating a project contract.

The proposed plan to build a 600-room Hyatt Regency hotel serving the Oregon Convention Center calls for using $60 million of Metro-issued revenue bonds, $14 million of government subsidies and $4 million from a Portland Development Commission loan. The developer – a joint venture between Minneapolis-based Mortenson DevelopmentÌý±õ²Ô³¦. and Chicago-based Hyatt Hotels Corp. – would pay the remaining $119.5 million.

The public financing piece has sparked opposition from not only hoteliers, but others who say the deal is giving away public dollars to a private company for an uncertain economic benefit.

“We will continue our signature collection and make our case to the voters, said Paige Richardson, a strategic planner who represents Coalition for Fair Budget Priorities, which is opposing the project. “Then voters can decide if a ($78 million) subsidy to a corporation is a bad idea.”

Multnomah County Judge Eric Bloch was scheduled to review the case Thursday and decide within the next couple of weeks whether the funding piece can be referred to voters. His decision rests on whether county commissioners’ administrative approval of the hotel financing plan was OK, or voters should be able to vet it as a legislative policy matter.

“The county charter is very clear,” Richardson said. “We feel very strong that this will be referred to the voters.”

Metro and Mortenson have held off on signing a contract as financial and legal questions about the project have surfaced, said Cheryl Twete, Metro’s senior development advisor.

“Both Metro and Mortenson are being a little cautious because we don’t want to waste public money,” she said. “If (the judge) rules in favor of Multnomah County, that’s a big green light for the project moving forward.”

Today, Metro expects to select one of nine firms that responded to a request for proposals for construction adviser services, Twete said. The adviser would manage predevelopment and construction stages and report to Metro, making sure schematic and construction designs are in alignment, she said.

The agency received proposals from U.K.-based Turner & Townsend; New York City-based Faithful + Gould; Marlton, N.J.-based Hill International; Littleton, Colo.-based Mears Consulting LLC, and five firms with offices in the Portland-metro area – Construction Systems Management Inc., PlanB Consultancy International LLC, Nelson Capitol CPM, Day-CPM and Inici Group Inc.

“Metro is going to be putting significant public money into this project, and we want to ensure that money is well spent,” Twete said.

Paying for a headquarters hotel

Metro’s financing plan includes $60 million in bonds that would be repaid via the Visitor Facilities Trust Account. Presently, visitors to area hotels pay taxes totaling 12.5 percent, and 2.5 percent typically goes to the VFTA. However, at the headquarters hotel, 11.5 percent of the taxes generated would go to the VFTA, and money from that pot would then be used to pay down project debt (but only after repayment of three other projects, including the 2011 Oregon Convention Center expansion).

“We’re very confident that this is a solid (repayment) system,” said Cheryl Twete, Metro’s senior development advisor. “These aren’t just numbers that we made up. We actually modeled all of this. We are very confident that all of these bonds will be paid on time.”