GlobeSt.com UPDATE: PDC Delays Headquarters Hotel Decision

PORTLAND-The Headquarters Hotel Evaluation Committee is ready to recommend a developer for the proposed 800-room hotel next to the Oregon Convention Center, but the Portland Development Commission apparently doesn’t want to hear it just yet. The city’s urban renewal agency this week pushed back the recommendation date by 30 days, from May 25 to June 22.The PDC says the extension “will allow additional time for consideration of the proposals by the Headquarters Hotel Evaluation Committee and additional discussion with project stakeholders about the size and financing of the project.” However, it also says that prior to its decision to delay the recommendation, “the evaluation committee had been prepared to present their recommendation to the PDC Board at their May 25 meeting.” Local industry sources tell GlobeSt.com that the extenstion is to allow more time to work with some hotel owners who are considering public opposition to the project and have been utilizing the services of lobbyist Len Bergstein. According to one insider, the upshot is that “there’s no way” the hotel will end up having 800 hotel rooms. That may appease local hoteliers but it also puts at risk the development’s functionality as a headquarters hotel, which generally has at least 600 rooms so that 500 rooms can be blocked out for convention planners without having to turn away walk-in traffic.Those in support of the headquarters hotel project say the lack of a large hotel next to the convention center, which is across the Willamette River from Downtown, is the top reason the larger and higher profile conventions bypass Portland for other convention cities. By not having a headquarters hotel, research by the Portland Oregon Visitors Association indicates the city is missing out on an additional $180 million of economic impact–impact that proponents say would spill over to the Downtown hotel owners because the larger conventions generate anywhere from 1,500 to 2,500 room nights.Some hoteliers in town are concerned that such a large, publicly financed convention hotel will be able to undercut the competition when conventioneers aren’t filling the hotel, thereby drawing general tourists away from the Downtown hotels, according to the sources. The situation is made worse by the fact that several hundred additional downtown hotel rooms are in the works in addition to the proposed convention center hotel, and that some of the larger Downtown hotel owners now get most of the hotel nights from the conventions that do come through town.The PDC is now scheduled to hold a public meeting on the project July 13, tentatively select a developer July 27 and ratify the decision on August 10. The development schedule calls for construction to begin in 2006 and for the hotel to open in 2008.Four developers responded to a formal Request for Proposals to build a headquarters hotel in Portland near the Oregon Convention Center. The proposals were received in December 2004, and the evaluation committee has met seven times to weigh the merits of each proposal. It is now anticipated the committee will meet at least one more time in June before preparing their recommendation to the PDC Board. GlobeSt.com detailed each of the proposals in January . The teams are led by: Jones Lang LaSalle and BPM Development; Ashforth Pacific and Garfield Traub Development; Hines Interests and Wright Hotels; and Faulkner USA. The proposals range in price from $180 million to $237 million.All but the Jones Lang LaSalle proposal place the hotel on the PDC’s preferred site across Martin Luther King Jr. Boulevard from the convention center, while the JLJ proposal has it across Holladay Street, where the light rail runs. Despite the PDC’s suggestions, only one (Ashforth) incorporates an underground connection to the convention center, only one (Faulkner) proposes developing all 800 rooms at once, and the only two to propose private financing each still requires tens of millions of dollars in public money.