Metro leaders were thrilled earlier this month when Oregon legislators set aside $10 million for construction of a proposed Hyatt hotel near the Oregon Convention Center.
But the grant of $10 million of lottery bonds – set to arrive in 2015 – was less than hotel proponents asked for, leaving a $2 million hole in the financing plan for the $197.5 million project.
That gap will have to come from the private sector, said Teri Dresler, director of Metro's visitor venues and the lead staffer on the hotel project.
"The public investment is maxed out," Dresler said. "We made a promise in the beginning to our guiding principles, and we will hold to those, and that is this investment will be minimal and low-risk."
She emphasized that the $10 million from the state was a significant amount, amounting to nearly three-quarters of the public's direct contribution toward the project.
"We were amazed and pleased with the $10 million from the state," Dresler said. "That the state understands the statewide impact of this national business is significant."
In addition to the $10 million state lottery grant, the financing plans include a $4 million grant from Metro. The Portland Development Commission is slated to loan the Hyatt's developers $4 million, and Metro would issue about $60 million in bonds that proponents say would be paid back through taxes on the Hyatt's room rentals. The remaining sum, around $120 million, would be directly funded by the developers.
It's possible the cost of the project could decrease, Dresler said, to close the gap between what proponents asked for from Salem and what the Legislature approved.
"It's got to come either through reductions in the overall cost, or increased investment on the private side," Dresler said.
A reduction in the scope, Dresler said, won't include a reduction in the commitment that 500 rooms be dedicated for use by potential large conventions.
Dresler said Metro, Multnomah County and Portland officials were "extremely close" to finalizing terms of an intergovernmental agreement regarding financing of the hotel bonds, modifying existing deals so that room taxes from the proposed hotel could be cycled back to pay off the initial bond sales.
Details of that financing plan, and other information about the project, are expected to be part of an Aug. 1 open house, scheduled for 5-7 p.m. at the Oregon Convention Center's Ballroom 256.
The Metro Council has a public hearing on the hotel proposal scheduled for Aug. 8, with a vote on the financing plan set for Aug. 15.