LOS ANGELES — The Metro Council in Portland, Ore., has signed off on a financing plan for a hotel project near the Oregon Convention Center that includes issuing as much as $60 million in bonds to help pay for construction.
Metro councilors unanimously voted to approve the plan during a meeting on Thursday, but it must still be approved by three other local governments, according to a report from Metro staff.
Metro is a regional government agency for the Portland area with a wide range of responsibilities that include the convention center.
The plan, which has been debated for more than 20 years, will go on to the Portland City Council, the Multnomah County Commission, and the Portland Development Commission, before returning to the Metro Council for final approval.
Under the proposal, Mortenson Development, a Minneapolis real estate development firm, will build a $198 million, 600-bed Hyatt Regency hotel. Loans and grants from the city, state, and Metro would pay for $18 million of the cost.
This includes $4 million from Metro, $4 million from the Portland Development Commission, and $10 million from the state's lottery backed bonds, approved by state lawmakers last month.
An additional $60 million would be paid for with revenue bonds issued by Metro and backed by room taxes generated at the new hotel. Guests at other hotels would continue to pay room taxes towards regional tourism promotion, which is how those taxes are currently used.
Metro officials have said this approach is less expensive than private financing.
The rest of the costs would be funded with investments from Hyatt, its development partners and other private investments.
Metro has said the project is "intended to leverage private investment and development with minimal resources, to enhance the region's tourism economy."
According to an independent analysis, the new hotel will attract five to ten new conventions to Portland each year, boost annual hotel business, increase tourism, and create 3,000 jobs.
"Those jobs will create about $5 to $6 million in new state tax revenues per year that will help support schools, public safety, and other important public structures and services throughout Oregon," Metro President Tom Hughes said after lawmakers approved the state funding.
Once approved, construction on the hotel could start in late 2014, with completion about two years later, according to Metro officials.