City Hall’s top finance man says this about the long-planned, never-consummated “headquarters hotel” Mayor Sam Adams wants to build next to the Oregon Convention Center: It’s less risky than another Adams pet project, the quest to bring Major League Soccer to town.

“This is a simpler transaction,” says Ken Rust, the city’s chief administrative officer. “We still have some financing holes in the [soccer-baseball] deal, so it feels riskier to me at the moment.”

But the hotel project, which Adams rescued from the scrap heap in December, remains riddled with questions as the city, Metro and a very skeptical Multnomah County—must each vote by July 1 to authorize spending $12 million of visitor tax funds to pay for the project’s design drawings and a firm cost estimate.

Here are answers to four key questions about the proposed $250 million, 594-room hotel:

• What Changed?

  Metro, whose Metropolitan Exposition-Recreation Commission operates the Convention Center, punted the project back to the City of Portland in December. MERC’s Cheryl Twete acknowledges the difference between projected revenues and costs looked awful when Metro finished its work. “Metro was concerned the gap could be as large as $50 million,” she says. But since last fall—say Twete, Rust and Fred Wearn, project manager for the Portland Development Commission—borrowing and construction costs have plummeted. Rust says interest rates, building costs and consumer demand must align to make the deal pencil out. “Is it feasible today?” Rust asks. “No, it’s not. But we want to be ready when those factors are aligned.”

• You Call This Economic Development?

  Unlike, say, a new bridge, Rust says, a hotel throws off cash that could repay the quarter-billion dollars in bonds the city would sell to pay for it. Jeff Miller, director of the Portland Oregon Visitors Association Travel Portland, says a hotel would capture at least eight more national conventions each year. Miller says conventioneers spend $317 per day, which translates into tens of millions of economic development dollars. Whether conventions would actually materialize because of one new hotel is speculative, of course. Here are some certain numbers, however: The plan calls for the hotel’s operator, Starwood, to invest only $3 million or about 1 percent of the total project cost (that’s far less than Merritt Paulson is putting into his deals). And although for-profit businesses operating in publicly owned buildings normally pay property taxes, the new hotel would not. The proposed financial structure also shows that in its first three years of operation, the project would get a $22 million subsidy from visitor taxes, both from guests at the HQ hotel and at other hotels and from car rental businesses.

• You’re Taxing Me to Support a Competitor?

  Visitors to Portland have recently paid as low as $99 a night to stay in the brand-new, super-deluxe 331-room Nines Hotel in the Meier Frank building. The Nines was built with the help of a $17 million loan from PDC, but developers recently told the commission they could not pay interest on that loan. Now, in addition to contending with a heavily subsidized competitor in a lousy travel environment, privately owned downtown hotels—which do pay property taxes—would also see the visitor taxes their guests pay used to pay debt service on the HQ hotel at the Convention Center. And Bashar Wali, the numbers guy for Provenance Hotels, which owns Hotel Lucia and Hotel deLuxe downtown, says the HQ hotel assumptions about occupancy rates and especially revenue per room “are not attainable.”

• Why Buy a Pea-Shooter If You’re in an Arms Race?

  POVA Travel Portland’s Miller says Portland cannot compete with other cities without an HQ hotel. But data compiled by PDC show that even the addition of 594 rooms will leave us far behind peer cities. Salt Lake City, for instance, has 4,602 hotel rooms within six blocks of its convention center; Seattle, 4,602; and Austin, Texas, 3,169. Even if the HQ hotel project moves forward, Portland would have only 1,685, and those rooms would be located on the other side of the river from downtown in a part of the city with few bars, restaurants or other attractions for convention-goers. “By [PDC’s] own standards, this hotel is not big enough to make a difference,” says Portland economist Joe Cortright, a longtime critic of the proposed hotel. “Beyond that, we have a lot of other disadvantages. We don’t have a hub airport like Denver or the entertainment options of a Las Vegas.”