Oklahoma City Convention Center Hotel 'likely' To Require Public Investment, Consultant Says

By William Crum, Staff WriterA public investment “likely” will be required to build the luxury hotel many see as central to success of downtown Oklahoma City’s MAPS 3 convention center, a consultant told the city council Tuesday. “As we move into this process, keeping that in mind is critical,” Tom Morsch of The PFM Group said in a presentation on hotel financing options. How much taxpayers might be called upon to contribute remains an open question, he said. Latest plans are to begin convention center construction south of Myriad Botanical Gardens in early 2016 and open the building in early 2019. The current budget is $252 million, including about $190 million for construction. Depending on the hotel’s size and how parking is financed, the project could double the investment in the convention center complex. Convention center hotels have been built using variety of financing strategies, Morsch said, ranging from private ownership to joint ventures to public ownership. Dallas owns the 1,001-room Omni Dallas Hotel, which opened in November 2011 at the downtown Dallas Convention Center. The Dallas Morning News reported in January that the city was carrying $659 million in debt on the hotel. Salt Lake City is considering up to $75 million in tax credits as part of efforts to build an 800- to 1,000-room, $300 million hotel at the Salt Palace Convention Center, The Associated Press reported last month. Financing plans differ “It’s very difficult to find an apples-to-apples comparison because pretty much all of them are structured differently,” said Cathy O’Connor, president of the Alliance for Economic Development of Oklahoma City. She said a series of meetings earlier this year with council members and business leaders showed many think development of the hotel “is an opportunity to make sure the convention center is as successful as it possibly can be.” The discussions, O’Connor said, showed there was interest: In an “upscale, full-service” hotel such as Omni, Westin, Marriott or Hyatt not presently found downtown. In a convention center designed for future growth and ready to “really move us to the next level of convention business.” An advisory panel has recommended an “expanded” convention center design with a 200,000-square-foot exhibit hall — bigger than three football fields — that would cost around $35 million more than the present budget. A 500- to 800-room hotel with meeting space would extend the convention center’s footprint and increase flexibility for groups planning conventions. To build a hotel, city and business leaders lean toward “project-based” options such as tax-increment financing, in which taxes generated by increased property values are used to retire debt, O’Connor said. Meeting objectives No interest was seen in asking voters to raise taxes to finance a hotel, she said: “That was pretty widespread among all the people that we talked to.” Morsch told the council “a privately owned hotel seems to meet your objectives best.” Consultants will outline the city’s desires for a hotel, including such things as number of rooms and when it needs to open.Read more on NewsOK.com