After years of court battles, the path toward Metro's 600-room Hyatt Regency hotel near the Oregon Convention Center appears to be clear. The regional government and its opponents announced a settlement Friday.
The Oregon Supreme Court had been set to hear a legal challenge March 7 from a coalition of hotel owners led by financier Gordon Sondland's Provenance Hotels. The opponents of the $212 million convention center hotel project sought to refer to voters Multnomah County's decision to reallocate lodging taxes toward $60 million in revenue bonds that would help pay for the Hyatt Regency.
The challenge had been previously rejected by the Oregon Court of Appeals and the Multnomah County Circuit Court, which agreed with the county that the decision was administrative and not legislative and therefore not eligible for the ballot. The courts ruled opponents can't challenge the county's ability to decide how to use a tax it already collects.
Now, the opponents have agreed to "settle all of the current lawsuits" and "avoid future legal challenges," according to a joint statement issued Friday by Metro and Provenance affiliate Aspen Lodging Group. In return, Metro will transfer ownership of a parking lot near the Oregon Convention Center to Aspen.
Provenance could then build another hotel – or apartments, office space or structured parking – on the parking lot site. But the hotel company would wait until the Metro-backed hotel opens in 2018 and assess how successful it is before making a development decision, said Jim McDermott, an attorney representing Aspen Lodging Group.
After transferring ownership of the parking lot to Aspen, Metro would have the option to lease it back for one year at a cost of $100,000, McDermott said.
An Aspen appraisal of the parking lot, which lies just south of the convention center, estimated its value at $1.94 million. The appraisal assumed development on the 30,000-square-foot portion of the site that is currently used for parking. There is an additional 43,000 square feet on the site that slopes downward toward nearby train tracks.
A previous Metro appraisal estimated the lot's value in the neighborhood of $10 million, but it assumed a far more difficult development project: an office building on the entire 73,000-square-foot parcel.
An estimate of how much annual revenue Metro collects from the parking lot was not immediately available.
"The convention center hotel project is critical to creating jobs in our region and supporting the state's tourism economy," said Metro Council President Tom Hughes in the statement. "I respect that the coalition and Metro had different views on the mission and funding mechanisms of this public/private project. Gordon Sondland and the other members of the coalition are pillars of the Portland community and I value their insight and opinions.
"We talked long and hard, looked each other in the eye and agreed that, if we settle, opposition to the convention center hotel is over and we can get back to the business of growing the Portland economy."
Sondland added in the statement that the convention center hotel will be "a boon to the community" if it performs as Metro has predicted.
"Should construction of a headquarters hotel create the convention demand that Metro anticipates, this settlement could even pave the way for future hotel development to accommodate even larger events at the convention center," Sondland said.
The hotel will also be subsidized by $10 million in lottery funds, $4 million in Metro reserves and a $4 million loan from the Portland Development Commission. It is slated to break ground directly north of the convention center late this year.
