Denver Selects Hyatt to Manage Convention Center Hotel

DALLAS - Denver officials on Monday announced that they have chosen the Hyatt Hotels Corp. to run a $300 million city-owned convention center hotel.

Hyatt's offer beat out a competing proposal by the Hilton Corp.

The city is on a fast track to build the hotel after walking away in April from a plan to partner with local developer Bruce Berger on a convention center hotel. Berger wanted to put the plan on hold because he said he believes investors are shying away from buying into hotel deals in the post-Sept. 11 market.

Now Denver officials plan to follow the lead of such cities as Austin and Omaha and build their own hotel. A nonprofit corporation will be created to oversee the project and issue tax-revenue bonds to finance it. Earlier this spring, the city hired U.S. Bancorp Piper Jaffray and UBS PaineWebber Inc. to underwrite bonds for the planned 1,100-room facility.

Officials say they expect the bonds to be sold early in 2003 and that they want the project finished by 2006 to complement an expansion of the Colorado Convention Center, which is scheduled for completion in 2004.

Voters in 1999 approved $262 million of revenue bonds to expand the convention center. The majority of those bonds have already been sold. Development of the hotel had been promised by city leaders as part of the incentive to get voters to approve the convention center expansion.

In the original plan, Denver's commitment to the hotel project would have involved the sale of $65 million of certificates of participation. The remainder of the cost would have been borne by investors and secured by Berger, who had also chosen Hyatt to operate the facility.

The city currently has 5,200 downtown hotel rooms. About 150,000 convention delegates passed through Denver last year, although hotel occupancy citywide was 67.7%, down from 72% a year earlier.