Metro Hotel as new Cover Oregon?

hoteltaxSB 927: Metro’s plan for a taxpayer subsidized Hyatt Hotel. Is this the new Cover Oregon?
By Taxpayer Association of Oregon

Yes Vote: Bates (D), Beyer (D), Burdick (D),Courtney (D), Dembrow (D), Devlin (D), Edwards (D), Gelser (D), Hansell (R), Hass (D), Johnson (D), Anderson (D), Monroe (D), Prozanski (D), Riley (D),Roblan (D), Rosenbaum (D), Shields (D), Steiner Hayward (D),Winters (R),
No Vote: Baertschiger Jr (R), Boquist (R), Ferrioli (R), Girod (R), Knopp (R), Kruse (R), Olsen (R), Thatcher (R), Thomsen (R), Whitsett (R),

The fact that government wishes to involve itself in building a convention center hotel are already showing signs of being the next Cover Oregon boondoggle. The Senate passed Senate Bill 927 (see vote below) which helps Metro build a Hyatt Regency hotel with $60 million in revenue bonds (from lodging taxes) and subsidized with $18 million in lottery funds and other public support (loans, grants). They wish to add taxpayer dollars to prop up a convention center that failed to meet forecasts. At one point, as much as $10 million a year was lost on the Oregon Convention Center by the city. Throughout the process the hotel has been criticized by many voices including an outside Metro consultant Piper Jeffray. When Portland helped use government resources to help build the Nines hotel.  This luxury hotel cut rates and damaged other downtown hotels who were not receiving government help. The problem of the Nines hotel making good on their promises and payments was a problem for many years.

Other convention centers with heavy taxpayer support, like Washington D.C. and St. Louis centers, are operating at a loss. The Philadelphia convention center spent $700 million of taxpayer financed upgrades and is suffering missed projections, setbacks and upset customers. With a record of failing government backed hotels, arenas and convention centers, sometimes high these priced boondoggles are launched based primarily on a politician’s promise. Such promise was made by Metro Council President Tom Hughes claimed that he would build the Hyatt hotel because “We can find no example of a Hyatt failing. So the question—’What if it fails?’—it would be the first example of a Hyatt failing in the United States.” That promise was quickly countered within hours by critics who mentioned that the Cleveland Hyatt, Jacksonville Regent Hyatt and Hyatt Regency Chesapeake Bay all faced problems paying their mortgages or are in danger of defaulting.


  • Bob Clark

    It’s not about Hyatt losing money. It’s about Oregon and Portland area tax payers losing their scarce public resources, and whether the community value of such a building outweighs the value of those scarce public resources. I know my answer, and it is a resounding NO.

    The taxpayer as represented by voters should have individual voice (vote) in weighing the cons against the pro. Metro acts as a real weasel in avoiding a public vote for this project approval by circumventing the Initiative and Referendum approaches by having the Oregon legislature deny citizens a vote on this very public matter. This isn’t representative government; or if it is, it is a very poor form of it, borrowing on the inertia embedded in citizen democratic processes.

    What is irritating and why this project would most probably fail a public vote is these projects have a long history of being no more than white elephants. Moreover, two prominent local economists have concluded and said events like the NCAA tournament and NBA Allstar game have no discernible economic gain for the local Portland economy. This new hotel will steal customers from existing hotels, most of whom are unsubsidized but rather taxed.

    Hidden in all this is Metro is promising Hyatt a guaranteed room rate floor, such that Hyatt is not risking any of its own capital effectively. The taxpayer is on the hook for losses.

    This project is Metro President’s Tom Hughes political payback for supporting his candidacy way back in 2010 when he ran against Bob Stacey and got big labor’s support funneled to him in part by former Portland City Commissioner Randy Leonard.

    • guest

      Write on! This poster is good.