June 12–A pitch to spend $100,000 on a study on how to fund a convention center hotel was put on hold by a skeptical Oklahoma City Council on Tuesday as members sought to be assured first as to whether the project is needed and feasible.
The council was asked to provide $100,000 to the Oklahoma City Urban Renewal Authority to contract with Chicago-based Public Financial Management to draw up potential funding plans for a hotel of at least 500 rooms.
The Alliance for Economic Development of Oklahoma City, meanwhile, has contracted with Stone Consulting to do a market analysis for whether a hotel is needed, and if so, how big of an operation can be supported by a new $250 million convention center funded through MAPS 3.
Both Tom Morsch, managing director at Public Financial Management, and marketing consultant Jeremy Stone promised they were prepared to start their studies with “no preconceived ideas.”
A hotel was first suggested in 2008 as part of a report commissioned by the Greater Oklahoma City Chamber. The full report was never released to the public, but a summary suggested a hotel of at least 650 rooms would be needed to ensure success for a new convention center.
After funding was approved by voters in December 2009, outside experts, including the Urban Land Institute, suggested the city likely faced a minimum subsidy of $50 million to complete hotel deal.
“We don’t have a preconceived outcome of options here,” Morsch said. “There is plenty of data out there. What’s changed is there used to be an expectation on behalf of the hotel people of how big can the subsidy be. And we’ve tried to eliminate that altogether or at least get a more fair balance of contributions.”
Councilman Ed Shadid, long a critic of the proposed hotel, bristled at a suggestion by Cathy O’Connor, a leader of The Alliance for Economic Development and the Urban Renewal Authority, that the need for a hotel was discussed in the MAPS 3 campaign.
“What was promised was when the convention center is completed, it would create 750 jobs and triple the amount of convention business,” Shadid said. “No convention center in the country has been able to triple its convention business. No city in the country has been able to double its convention business. And there was no mention of a convention hotel.”
Shadid’s comments were echoed by newly elected Councilman James Greiner, who said he never heard a hotel mentioned during the MAPS 3 campaign. Shadid also doubted Morsch’s claim that a deal might be possible without a public subsidy.
Councilwoman Meg Salyer said Oklahoma City has had success in public-private partnerships and that she saw potential in arranging a development similar to the one that sparked the redevelopment of the Skirvin hotel.
“We do have a great success story here with a complicated public-private financing structure with the Skirvin hotel,” she said. “We’ve got a steep learning curve on what the possibilities are in financing a hotel.”
Even so, Salyer agreed with the council to put Morsch’s work on hold.
Councilman Pat Ryan noted Morsch would need to know the council’s objectives to finish his work, yet they won’t know until Stone’s study is completed whether downtown needs a hotel, or if so, how many rooms might be needed.
“Objectives change based on what market study shows,” Ryan said. “Do it one step at a time.”
