All signs point to a union-built convention center hotel
A new finance plan for building a
headquarters hotel for the Oregon Con-
vention Center was laid out July 9 at a
joint work session of the Metro Council
and the Metropolitan Exposition and
Recreation Commission (MERC).
Metro operates the Oregon Conven-
tion Center.
The proposed hotel would be a 600-
room Grand Hyatt Regency owned by
the Chicago-based Hyatt Corp. Hyatt is
teaming with Mortenson Development
Inc. and Schlesinger Cos. to build the
hotel. Projected cost is $200 million.
The Columbia Pacific Building and
Construction Trades Council (CP-
BCTC) supports the project, which
would generate nearly 2,000 consruc-
tion jobs. Several representatives of the
council attended the joint work session
on July 9.
All indications are that the hotel will
be built union. Stephanie Soden of
Metro told the Labor Press that “we
have every belief that the hotel will be
built with a union workforce.”
Jodi Guetzloe-Parker, executive sec-
retary of the CPBCTC confirmed that
Mortenson Construction is a union gen-
eral contractor.
Language in a request for proposal
(RFP) issued by Metro last year called
on prospective developers to bid the
project under prevailing wage guide-
lines. Additionally, a project “statement
of principles” signed by Metro, the City
of Portland, and Multnomah County
seeks assurances that the developer will
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PAGE 8
utilize union building trades for con-
struction and commit to employing ap-
prentices and minority/women/emerg-
ing small businesses.
Hyatt Corp. has already signed a
landmark neutrality agreement with
UNITE HERE, the union that repre-
sents hotel workers. Under that agree-
ment, union organizers can meet with
workers at the hotel, and workers can
unionize through a “card-check”
process. If workers choose to unionize,
and don’t reach agreement on a con-
tract within six months, the contract
proposals will be submitted to binding
arbitration.
Funding for the hotel will come
from various sources. The Hyatt/
Mortensen development team will in-
vest approximately $117 million into
the project. The Oregon Legislature ap-
proved $10 million in state lottery bond
proceeds; Metro will contribute $4 mil-
lion using funds earmarked for a con-
vention center hotel; and the Portland
Development Commission will provide
a $4 million loan using funds dedicated
to a headquarters hotel. The rest of the
project’s costs will be paid by visitors
who stay at the hotel.
Metro visitor venues general man-
ager Teri Dresler, Oregon Convention
Center executive director Scott Cruick-
shank, and PFM Group consultant Ken
Rust told the joint work session on July
9 that $60 million in bonded financing
would be covered by room taxes gen-
erated at the new hotel.
According to an article by a Metro-
employed reporter posted on Metro’s
Web site, the plan hinges on a fund
called the Visitor Facilities Trust Ac-
count that’s filled by local room taxes.
Dresler and Cruickshank have been ne-
gotiating with the City of Portland and
Multnomah County, as each has a stake
in the visitor fund. The fund, which
brought in $12.3 million during the
2011-12 fiscal year, foots the bill for a
prioritized list of projects. According to
the Metro reporter, the first priorities
are to pay off bonds to cover the con-
struction of the convention center, the
Portland Center for the Performing
Arts, and Jeld-Wen Field. That would
be unchanged in the new financing
plan.
Next in line would be the bonds sold
to pay for part of the Hyatt hotel — a
number expected to be around $3 mil-
lion per year. After that, operational
support for the convention center and
marketing efforts would be supported,
and a rainy day fund would be filled,
the report said.
Metro refers to the funding plan in
terms of “buckets” — when one fills up,
the room tax revenue overflows into the
next down the line. Only three times has
there not been enough money to reach
the final bucket. In those years, money
from the rainy day fund was used to
supplement the revenue shortfall, ac-
cording to the report.
Metro officials estimate that the ho-
tel will generate $11 million in com-
bined state and local tax revenue yearly.
At the joint meeting, Metro attorney
Alison Kean Campbell emphasized
that the bond is not public dollars.
“The public does not own the hotel,
nor will it have general obligation
debt,” Campbell said.
“It’s not really public, it’s not really
private,” Rust said. “It’s paid by people
staying at the hotel.”
The plan has yet to be approved by
the Mortenson development team.
Metro wants approval from the City of
Portland and Multnomah County first.
Those votes are expected in August. If
the deal is approved, the developer
would break ground early in 2014, with
a tentative opening date in early 2016.
Convention planners say conventions will come
Convention planners say Portland
will attract large, profitable conven-
tions when it builds a convention cen-
ter hotel.
Meeting in Portland last week as
part of Travel Portland’s Customer Ad-
visory Board (CAB), the professionals
who work with large trade groups and
book their conventions, say Portland is
a highly desirable destination. But,
they add, many groups balk at holding
conventions here because of the ab-
sence of a convention center hotel.
“Portland is considered a wonderful
location in the convention market in
large part because it is considered a
leader in sustainability,” said Stephen
Miner, CEO of Solar Energy Trade
Show from Arlington, Virginia. “What
causes groups to go elsewhere is the
lack of a convention hotel.”
Dean Phelus of the American Al-
liance of Museums said its annual con-
ventions attract 5,000-6,000 attendees.
“Portland is a fabulous city and we
held our convention here in 2004,” he
NORTHWEST LABOR PRESS
said. “But we would not even consider
coming back without a convention ho-
tel built.”
“Our members will tell you Port-
land is the friendliest city we’ve ever
been to,” said John Saunders, executive
director of the National Forum for
Black Public Administrators out of
Washington, D.C. “You also have an
amazing conference center, but you are
hamstrung because there is no conven-
tion hotel.”
Jeff Miller, president and CEO of
Travel Portland, said his organization
has identified nine conventions waiting
to book the Oregon Convention Cen-
ter as soon as a development contract is
signed between Metro and the private
developer working with Hyatt Hotels.
When asked, “Why Portland?” as a
destination, CAB members cited a va-
riety of factors: a wonderful nightlife
and restaurants, no sales tax on food
and beverages, an exceptional airport,
an attractive convention center, and an
effective transit system. They also
pointed to Portland’s focus on sustain-
ability and its proximity to the ocean,
mountains, and forests.
JULY 19, 2013