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Wednesday, February 7, 2007

Why the convention center hotel will fail

As Metro decides to get the taxpayers of the region into the hotel business (the crucial vote is tomorrow, but the convention center hotel scam looks like a done deal), here's a document -- presented in vain in Baltimore a couple of years ago -- that helps to show why it's a bad bet. It explains that to attract big conventions, the hotel has to offer really cheap rooms, even though it must be a full-service hotel that costs a fortune to run. And if the room rates are too low, you can't pay the debt service on the construction bonds.

If that's a problem for Baltimore -- an east coast city that's relatively easy for everyone east of Denver to get to -- imagine what it will take to get big groups to fly all day way the heck out to Portland. There's no way that hotel will bring in convention business and also break even.

Publicly financed hotels in Omaha, Houston, Overland Park (Kansas), and St. Louis are all bombing. In St. Louis, the performance of the convention center hotel (operated by Marriott) has been so bad that the bonds issued to build it have been under "consultants review." Here's the report on that fiasco. It ain't pretty.

PGE Park, the aerial tram [rim shot] -- they pale in comparison to this one. This one is bigger and dumber than any that has gone before.

Comments (33)

Yet another reason to get rid of metro.

Right after Metro's decision to force density on our neighborhoods, to increase traffic congestion and to wast 2 BILLION on toy trains.


I am not an expert in these things but it seems lots of cities are trying to corner the market on conventions using public funds. Most of these cities are in a more central location to the national population. I am guessing one will succeed, a couple will break even, and most will lose. PDX is facing long odds. It is unclear to me why the public outrage is so muted. I won't be paying for this but just the idea is frustrating.

It is unclear to me why the public outrage is so muted.

Because this is being done under cover of darkness. And local media has abdicated its responsibility to report on anything local. Hence The Oregonian's astronaut headline this morning.

Is there anything we can do about this? I hope it's not too late :(

It is too late. You have big east coast money man Hank Ashforth who loves feeding at the public teet.

I blogged about Ashforth back in 2005 here:

Interesting in that blog I mentioned some of the information that Jack touched on. There was a University of Texas prof who had dones some pretty extensive research on Convention Center hotels.

One thing to consider is that the places that a CC hotels actually do work, are places that are also DESTINATION cities. You know like Las Vegas or in Florida. But then I guess the city will make the case that people will want to come from all over the country to view the PHART tram scam.

One more thing. (Because picking on corporate welfare king Hank Ashforth is such a fun excersize). We did another post on good ol Hank and his sticky fingers in the Spokane area.

Yip Yip

"Is there anything we can do about this?"


Primarily because it has happened over and over again without any recognition by those who always support the planning agenda around here.

Fans of Metro, 2040 plan, TODs, and light rail (etc) are afraid of offending the greater cabal even though it's the mind behind the madness this thread and Hotel demonstrate.

That's why there's no outrage or a muted outrage over the SoWa scam, the Cascade Station flop, Beaverton Round fiasco, Gresham Station, TODs plopped into neighborhoods, infill that doesn't fit, our worsening transportation gridlock and on and on and on.
Instead we hear rationalization each and every time that is riddled with propaganda about "stopping sprawl" and saving the planet.

So hear we go again and this time it's the CC Hotel. Why wouldn't the buearacies move ahead with this. No one ever faces any consequences when it flops.

Or maybe I missed the story about the firing of Metro and PDC staff who cooked up the scheme for the CC expansion, after the voters turned it down.
Which politician lost their re-election?

The story is the same for each and every one of the boondoggles over the last 20 years and it willbe the same for the Hotel. Not a single staffer or politician faces any consequences.

This is just the price we pay for having a "better planning system" that considers the environment, livability and social justice and people before profits.

So don't be talking bad about our planners,agencies or politicians.
They care.

It's important to keep in mind the real reason for most big public works projects:

To feed money to political buddies and campaign doners, preferably with no bid contracts.

Time to look at Metro's campaign doners.


I'm generally a pro-Metro guy, but I don't like this at all. I love Portland, but, c'mon folks, we're not a destination city. When I think destination cities in the west, I think San Diego (convention center right on the harbor and close to the happening Gaslamp quarter in downtown), Vegas (need I explain?), etc. Not Portland. God love us, but it rains all the time here, you have to walk a good ways to get to anything decent, and, frankly, the neighborhood around the convention center looks like hell. No offense to Fairly Honest Bill.

Who will build the hotel? Hoffman Construction, who built the convention center expansion? Interesting.

You claim Portland has trouble competing against the likes of Vegas as a convention draw, but remember, that was before we built the tram. There's two gondola cars so that's like seeing the Space Needle and the Eiffel Tower at the same time.

Oh, there's a typo in the first comment on this post. Jim typed "density" when he surely meant to type "destiny".

Or perhaps it should be both.

This is just like the 10,000 high paying biotech jobs that will be created in the SoWa district thanks to all the taxpayer funded freebies to the developer crowd. Its just something they are pulling out of their backside if they think this will turn a profit or create significant living wage jobs. I agree with the above that this town has no sideshow to offer like Vegas or SanDiego, etc. and it just won't pencil out as anything other than another yoke around the neck of the taxpayers. This isn't Hollywood..."Build it, and they will come" doesn't work.

Remember this? The Metro charter amendment that "limited the powers of Metro" but actually gave Metro greatly expanded powers over ANY matter of metropolitan regional concern? Obfuscation and out-right deceit is the norm with Metro. It's only a matter of time before Metro takes over Trimet, the Bull Run, and oh, let's say, electric and gas power. Scoff not. Plus, Metro gets to skim a percentage off the top to build even greater edifices (edifici?) to itself (and pay for all those planners). The problem, as I see it, is this fifth-generation Oregonian voted "no" and does not deserve what is being inflicted. Those of you who keep voting for more and more gub-mint deserve what you get. There is a reason why very few (if any) other states have created this layer of regional government.

Let's keep a tally of the party affiliation of those who continue to support these boondoggles.

Live from Atlanta (gee, there seems to be a lot of new business and progress here),


First conventions booked:

Tram Congress & World Expo 2009 (pre-con field trips $329 extra w/ tour + lunch, $309 if ppaid by 5/08 inc. all transfers sales tax not inc. limited registration)

Rebuilding What Detroit Trashed: Light Rail Summit Expo & Workshop '09

Global Warming Symposium - #3 In A Series - The Next Decade Can We Survive?

Reclaiming Reality Tradeshow (regional event only, postponed dates tbd visit

If Metro can build and operate a hotel, why not do the same thing with Wapato Jail.

I can guarantee 100% occupancy.

It's continued projects like this that have caused my wife and I to throw in the towel on Multnomah County (and Oregon) after 12 years. Our home is going on the market in a matter of weeks, and we're high-tailing it across the river to Clark County ASAP after our home sells.

Hopefully if we time it right, we won't get soaked in our taxes for yet another crazy county project. I'm still smarting from having to pay thousands of dollars over the past three years (on top of my normal taxes) for the special school levy, when my second-grade son has yet to attend a Portland Public School for a single day.

Enough is enough. This kind of thing is going to make many people think twice about hanging's gotten WAY out of hand.

"Who will build the hotel? Hoffman Construction, who built the convention center expansion? Interesting."

Jack, you're right on here. Not only did Hoffman build the OCC expansion, they were also awarded large contracts to rebuild two large halls at the Expo Center and to renovate the zoo a few years back. They also rebuilt the Metro HQ's building. Metro doesn't dare award a large construction contract to anyone else. It's all done under the rubric of an "alternative contracting approach."

The Wire is the best show ever broadcast on American television, and the real Baltimore keeps proving it.

I'm convinced that Hoffman Construction is on retainer at OHSU. They've constructed practically every major building on campus in the past 20 years.

Hoffman was up working on the Spokane convention center expansion too. The hype there was their expansion could lure convention business from Portland.

I read in insert in The Oregonian a few days ago about the Lloyd district 'redevelopment'. They mentioned the Hard Rock Cafe franchise will be putting in a restaurant and one other large restaurant whos name I am forgetting. They also mentioned plans of a new hotel. Ugh. Apparently Metro is trying to sell the public on these ideas by putting out advertising brochures in the newspaper.

One other unmentioned topic, when people visit a city for a national convention, they like to have activities to participate post convention. What does Portland have? The Zoo bomb? The Tram? Our two lame downtown nightclubs or the zero nightclubs in the Lloyd area? People who fly in for a convention cannot get out and do the things we love here: Multnomah falls, Forest Park, Mt. Tabor, Boating, Fishing...etc

What does Portland have?

While I've reached the age where I'm happier home watching Tivo-ed movies and Jon Stewart, my son's a musician (shameless plug, his one-man band is "frank") and Anne and I have been out past our bedtimes to see him. There are an amazing number of clubs and venues for live music in this town. There is a very vibrant night life, and not just downtown but all over.

I don't know why it's suggested that "Multnomah Falls" et al is seen as somehow beyond the reach of conventioneers. Conventions here often have organized excursions to just such "tourist" sites...including our amazing, awesome wine country. Portland's got great stuff an hour away. Not to mention the coast. Versus Convention Center mecca Las Vegas? C'mon, like the slot machines are so different at the Stratosphere versus the Bellagio? The phony Venetian baloney. Vegas is boring, and plastic in my opinion...

We have great restaurants, great sights, forest hiking trails in the City limits, a better-than-average transit system...we most certainly have the potential to be a top destination site for conventions.

I love Portland. When friends and family visit from out of town the problem isn't finding stuff to do, it is finding time to take it all in.

On the other hand...METRO in the Convention Center Hotel business strikes me as absurd. Yeah, a Convention Center Hotel's a nice idea...but we're different here, have our boutique hotels downtown and MAX to take folks to the convention center. Let the private sector work this one out...

If you have a week to hang out in Portland, there's no end to what you can do. But conventioneers don't have that. They show up on, say, a Wednesday night and are gone by Saturday late afternoon. They won't want to spend the whole weekend here, and if they do stay over Saturday night, they'll have meetings on Saturday morning and be on some ungodly 6 a.m. flight on Sunday.

So they will likely have two windows to do stuff -- say, Thursday evening and Friday evening, maybe a couple of hours on Saturday -- and they won't go more than a half hour away from their hotel, if that. The coast, the wine country, the mountains -- it's not in the cards for 95 percent of the prospective attendees. So what's left to make the convention sponsors pick the City of Portland? Great restaurants and brewpubs. The zoo. The tram. Second-tier arts groups. Maybe you go to the Greek Cusina and get shot. It just isn't enough. It's not going to happen any time during the life of that hotel building.

The coast, the wine country, the mountains -- it's not in the cards for 95 percent of the prospective attendees. So what's left to make the convention sponsors pick the City of Portland?

Spouses. They go off and do the fun stuff while their other half attends seminars on ball bearings or, uh, tax law? :-)

Uh, don't we have a lot of strip clubs here?

Nice job, Coyote. I assume the smiling man with the gray hair is Ashforth. He'd be a shoe-in for a Grecian Formula spot.

You ought to expand on the good Professor's study and submit it to the commentary editor at the Little O.

Before the Tram debacle, I supported the convention center hotel. But now... not so much. I think the city should just put a moratorium on any new multi-million dollar projects and focus on the basics.


The basics? Jack - You must not allow such profusely aggressive and inflammatory language! Try using that word at City Hall Mr. Justin, I dare you!

Frank - I agree partially. The Portland area has many great attractions for visitors, not so much if you are here working and on a limited time frame. And I hate to say it but most convention professionals are not into second rate (at best) rock music. Personally, I thought we had a much better thing going in the 90's with our Jazz scene. Which has oddly dried up nearly completely. This coming from a guy in his 20's, the aforementioned rock music demo.

I totally agree ZMD. Portland's rock scene is limited to a pretty small number of folks --mostly the city's hipster set. Most of the big traffic nights downtown are pulling the college crowd and young adults who are frequenting the meat markets.

I've been playing the Portland scene for close to ten years. Rarely are local acts packing the house.

I think it also goes for Portland in general. It's an attractive city to a pretty small and selective market segment. Pouring dough into the Convention center is a fool's errand.

C'mon, guys...Portland may have things to see and do, but we obviously don't have enough rooms...particularly "rooms by the hour" that so many conventioneers seek out.

Can't you just see Metro promoting the new hotel/convention center? "Access to the best free expression in the country! (Unfree expression available at reasonable rates.)"

Where are all the anti-union sheeples that would be MAD AS HELL if this were a Wal-Mart instead of a hotel?

I am reluctant to chain myself to anything this early in the game. Not yet anyway. The Red, White, and Blue synchronized regurgitation was successfully deployed in the past (when Shrub I was visiting), but it may deserve an encore performance.

How about some of you legal eagles find a legit basis for injunctive relief? Or maybe we could file a FIA request for Bragdon's DVD rental and cell phone records.

Anything? Bueller?

Is this thing on?

I still say the convention center becomes a 24hr Bourbon Street. Strip Clubs, Bars, Everything. Portland would even lure the Seattle crowd.

They wouldn't need to subsidize anything then! :o


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