DALLAS - The Dallas City Council on Wednesday capped the city's contribution to the construction of a deluxe 1,000-room hotel in downtown Dallas adjacent to the convention center at $356 million.

Officials expect to sell revenue bonds in early 2009 to finance the city-owned but privately operated hotel. The bonds will be issued by the Dallas Convention Center Hotel Development Corp., which was established by the council in August for that purpose.

The 11-to-2 vote by the council authorized City Manager Mary Suhm to complete the development agreement with Matthews Southwest, which will design and build the hotel. Omni Hotels will operate the facility.

The city said the hotel will be built and operated to a "four-star plus standard." It will include at least 1,000 rooms, 100,000 square feet of meeting and exhibit space, and parking for 720 vehicles. It is to be completed no more than 30 months from the beginning of construction.

Dallas issued $42 million of certificates of obligation in May to purchase the site for the hotel. The city also sold $325 million of refunding bonds in November to restructure the outstanding convention center debt so hotel tax revenues, which were dedicated to the convention center debt service, could be also used to support the revenue bonds along with profits from the new hotel.

Proponents of the new hotel said that a large downtown hotel is necessary to keep the Dallas Convention Center as a viable venue for large meetings.

Phillip Jones, president of the Dallas Convention and Visitors Bureau, said that contention is borne out by an increase in bookings as convention planners learned of the proposed hotel project.

"In this down economy, we are booking 20% to 25% above of where we were last year," he told the council. Jones said he expects bookings at the convention center to increase by 100% in the next few months.

Citizens Against the Taxpayer-Owned Hotel, which opposes the hotel project, has submitted enough valid signatures on petitions to require a public vote in May 2009 on financing the facility. The group said the hotel will not generate enough profits to support the bonds, requiring a bailout by Dallas taxpayers.

However, Mayor Tom Leppert and a majority on the City Council said they intend to go ahead with the hotel project's financing and construction despite the looming election. If the project remains on the current schedule, construction will be under way before the municipal election on the first Saturday in May.

Leppert included $386 million for the convention center hotel in the city's wish list for projects to be financed as part of President-elect Barack Obama's proposed infrastructure stimulus plan. The request is part of the U.S. Conference of Mayors' Main Street Recovery Program, which lists 11,391 infrastructure projects totaling $73 billion in 427 cities.

Anne Raymond, an executive with a Dallas hotel and real estate firm and spokeswoman for the anti-hotel group, said Leppert's request for federal funds for the convention center hotel is "astonishing."

"The mayor has demonstrated a continued lack of interest in protecting taxpayers by asking the federal government to bail out the proposed convention center hotel," she said. "Following in the footsteps of failed Wall Street banks and automakers, Leppert's request for federal funds for a hotel bailout illustrates exactly what a money-losing venture this would be."

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