Duff on Hospitality Law

On Monday March 3, 2014, a Multnomah County Circuit judge agreed with the Multnomah County Elections Director and brought a new hotel at the Oregon Convention Center one step closer to fruition. A Convention Center Hotel has long been desired by a variety of tourism and economic development interests who argue that such hotel will allow Portland to host larger events at the Convention Center. As long as those supporters have been around, so too have opponents of such a hotel, who argue that the economic benefits of such a hotel are overstated and may also harm their economic interests and should not qualify for public subsidies. In 2013, Metro and other local jurisdictions seemed to be coalescing around a plan that would bring the hotel to the Convention Center, but one aspect of the plan ran into a snag and ended up in court.

In May 2012, we blogged that the Hospitality Industry is on the road to recovery and Metro, Portland’s regional governing body, was once again considering an Oregon Convention Center (OCC) hotel. On September 13, 2012, Metro approved a proposal by local developers to construct a Hyatt Regency Hotel. The full development team consists of Mortenson Development, Mortenson Construction, Hyatt Hotels Corporation, ESG Architects, Ankrom Moisan Architects, Piper Jaffray & Co., Jones Lang LaSalle Hotels and Star Terra LLC/Schlesinger Companies.

The Mortenson team proposed four development options, two options for the StarTerra, LLC property (directly north of the OCC) and two options for the PDC-owned site (directly east of the OCC). For each site, Mortenson proposed two different development programs achieving approximately 600 rooms. The development program options include: 1) a 600-room Hyatt Regency or 2) a combination 420+/-room Hyatt Regency and 181-room Hyatt Place. Metro favored the Mortenson team because this team has extensive hotel development and financing experience. Further, Metro recognized that Hyatt currently does not have a strong presence in the Portland market and a Hyatt Regency hotel could serve national convention clients at the convention center as well as introduce new corporate Hyatt-based group business in Portland.