The city agency spent about $10 million acquiring the land for the project and has long been a strong proponent of the project as a way to increase the size of conventions the city can draw and build on an economic impact that in 2003 totaled $490 million. But the agency has backed off in recent months in the face of monied opposition by Downtown hotel owners who have benefited from the city not having a large hotel adjacent to the convention center.
The PDC has since downsized the minimum first phase of the hotel from 600 rooms to 400 rooms, putting in question its usefulness as a headquarters hotel. Most large convention planners require a room block of at least 500 rooms. Now, because of concerns about the amount of public subsidy that may be required, other components of the plan may be up for downsizing.
"As staff moves forward with this project, I have asked that they continue to analyze all of the market and cost factors associated with the hotel," said PDC chairman Eric Parsons at the time the commission signed off on the negotiations. "The commission and Mayor Potter will require a thorough assessment of the project before any final decisions are made."
In early September the evaluation committee ranked highest the development team of Ashforth Pacific and Garfield Traub and forwarded this recommendation to PDC executive director Bruce Warner. A team led by Faulkner USA came in second. Warner conducted his own review of the Evaluation Committee's report and requested additional analysis from PDC's legal and finance staff. In early October Warner affirmed that the Garfield/Ashforth team had submitted the most responsive proposal. The commission concurred last week.
The financial feasibility of a new Headquarters Hotel is dependent upon the facility's quality, program, and room block requirements. PDC has already committed to provide favorable terms on the land sale and limited tax increment funds to support the project. The project's financial plan will likely require a variety of financing tools and partners. Warner is recommending the creation of a Finance Advisory Committee to assist in developing alternative financial structures for review.
The Ashforth Pacific/Garfield Traub team's $144-million proposal utilizes public financing and the city-assembled and owned land directly across from the Convention Center. The team envisions a 23-floor Westin hotel fronting Martin Luther King Jr. Boulevard that is transparent on three levels to expose the hotel's activity to the Convention Center and the street. The project includes a light glass canopy covering a plaza at the corner of Martin Luther King Jr. Boulevard and Holladay Street. The plaza space could be closed for the use of the OCC, and when not in use it could be open public space with seasonal retail activity.
Ashforth Pacific is a real estate owner and developer that owns most of the office buildings and developable land in Portland's Lloyd District, including a full block immediately east of the two PDC blocks. According to its proposal, that block would hold the parking for the development as well as street-level retail and a residential tower.
Garfield Traub has financed more than 100 hotels, resorts and conferencing facilities and has experience in both public sector and private sector financing. Recent projects include the Sheraton Convention Center Hotel in Overland Park, KS, and the Doubletree Hotel and Conference Center in Bay City, MI. The firm has been selected to develop a $175-million headquarters hotel and mixed-use development to anchor the new 580,000-sf convention center in San Juan, Puerto Rico.
For previous stories on the convention center hotel, click on one of the following headlines:
- Ashforth Pacific Team Selected for Convention Hotel Project
- Revised HQ Hotel Proposals Due in August
- PDC to Issue Addendum to Hotel RFP
- PDC Delays HQ Hotel Decision
- City Takes Possession of Menashe Property
- City Releases Full Hotel Proposals
- PDC Delays Release of Hotel Proposals
- PDC Files Suit to Take Menashe Property
- City, Menashe at Odds Over Value of Convention Center Hotel Property
- RFQ Out for $150M Headquarters Hotel
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