Barring a last-minute miracle, Metro, City of Portland and Multnomah County leaders will pull the plug Monday morning on the latest chapter in the long-running effort to finance a so-called "headquarters hotel" next to the Oregon Convention Center.
Speaking on background, sources familiar with the decision-making process say that the hotel is dead unless Mayor-elect Sam Adams produces a previously unknown source of cash at a meeting between Adams and other elected officials and their staffs scheduled for 8:30 am Monday.
(Although the City of Portland abandoned its most recent efforts to finance a hotel in 2006, the City and Multnomah County are part of the decision-making process, along with the Convention Center's owner, the Metro Regional Government. That's because all three government agencies would have to make significant budgetary sacrifices to finance the hotel).
For nearly two decades
, pols and tourism boosters have tried numerous approaches to develop a hotel they hope would generate more overnight convention business for the publicly-financed facility on the inner eastside.
Back in September, Metro, which operates the Convention Center through its Metropolitan Exposition Recreation Commission (MERC) delayed
a decision on what had been presented as a 600-room, $247 million project. At that time, Metro's legal and financial staffers were trying to find a financing structure that could plausibly support the hotel.
Tentative plans included getting the City - which has a stronger bond rating to back debt for the project - and the city-owned Portland Development Commission to donate the land for the hotel. Metro then pushed back the decision to Dec. 18.
But the word from inside is that the numbers did not pencil out. Deteriorating bond market conditions have made financing more expensive; economic uncertainties have cast a pall over projections for the tourism and convention business; and finally, Metro staffers say to move to the next level of analysis would require an additional $5 million, which Metro is discinclined to spend.
None of the governments involved has proposed an alternative financing plan. Instead, in recent weeks, PDC has apparently become less interested in donating land to the project.
The proposed financing structure, which would divert property taxes generated by the hotel directly to debt service, looked increasingly costly to cash-starved Multnomah County, which is more dependent on property taxes than either of its partner agencies.
The cancellation of the hotel project comes at an opportune time for Portland Beavers and Timbers owner Merritt Paulson. Paulson wants the City to pay $85 million
to renovate PGE Park into a soccer-specific facility for a Major League Soccer expansion team he hopes to buy; and to build a new baseball stadium for the Beavers.
The leading site for a new stadium appears to be property now occupied by the obsolete, under-used city-owned Memorial Coliseum, a few blocks north of the Convention Center.
If the City and PDC can now re-direct the staff time—and money—they have been considering spending on a headquarters hotel, they can far more easily devote resources to Paulson's idea—and to Trail Blazers' owner Paul Allen's complementary desire to enliven the Rose Quarter.