DALLAS - Dallas Mayor Tom Leppert and his political allies have formed a political action committee to oppose a group seeking a referendum on the city's plans to issue between $400 million and $500 million of revenue bonds for a downtown city-owned convention center hotel.

The City Council has approved a financial plan for the 1,000-room hotel that includes up to $519.1 million of senior debt, $10 million of junior debt, and $10 million from the developer, Matthews Southwest. The council has also authorized the sale of $42 million of certificates of obligation to purchase the site for the hotel, with that debt expected to be called in when the revenue bonds are issued.

Leppert announced the formation of the Build The Hotel! coalition at a news conference on Wednesday outside City Hall. Flanked by eight of the 14 city councilors and a number of prominent business leaders, Leppert said the convention center hotel is vital to the future of not only downtown, but the whole of Dallas.

"If we turn our back on the convention center hotel, we're turning our back on the city of Dallas and the future of this city," Leppert said.

Leppert rejected criticism that Dallas should not be in the hotel business, noting that the city will own but not operate the hotel.

"We're not going to be in the hotel business," he said, adding that the city owns the bond-financed American Airlines Center, where the city's professional hockey and basketball teams play, "and we're not in the hockey business, we're not in the basketball business."

Leppert said the hotel revenues would be sufficient to support the bonds, and the facility would bring in millions of dollars more in economic benefits to the city by attracting large conventions to Dallas.

The anti-hotel group, Citizens Against The Taxpayer-Owned Hotel, is currently conducting a drive to collect the signatures of 20,000 registered Dallas voters on petitions seeking to force a vote on amending the city charter to prohibit publicly owned hotels. The group was formed by representatives from four Dallas-area hotel operators and executives from several Dallas real estate firms.

The group changed its name from Citizens Against A Taxpayer-Owned Hotel after registering as a political action committee with the city. The group's slogan is "Safer Streets, Not Hotel Suites - Let the Voters Decide!"

Organizers of the anti-hotel petition drive have until mid-November to amass the signatures. If the hotel opponents are successful, the vote to amend the city charter would be set for the municipal election in early May 2009.

However, that could be too late to halt the hotel project, which is now in the pre-design stage.

Work on a 40-acre hotel site in downtown Dallas adjacent to the Dallas Convention Center is set to begin before the election is held. Hotel opponents have asked the city to suspend the schedule until after next May's potential election, but Leppert said the project will not be delayed.

Anne Raymond, a leader of the anti-hotel group, said the petition drive is a "clarion call to every taxpayer in Dallas and a wake-up call for city hall."

She said city officials developed the plans for the hotel with very little public involvement, including the public financing plan approved by the city council in May.

"This decision was made behind closed doors with absolutely no public debate on the risks and economics of taxpayer ownership," Raymond said. "Since that vote in May the city staff has been working furiously to make this hotel happen as fast as possible - and they want it to happen without talking to the taxpayers about the risks."

Raymond is managing director of Crow Holdings, which owns the large Anatole Hotel north of downtown.

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