O’Connor: Hotel will maximize economic impact
By Cathy O’Connor
The Journal Record
On Tuesday, the Oklahoma City Council approved a redevelopment agreement with Omni Hotels for a headquarters hotel to be built and opened in concert with the new MAPS 3 convention center.
This decision gives Oklahoma City the ability to compete and attract larger conventions, and will create new jobs and increased revenue for the entire city. A recent economic impact study by HVS Global Hospitality Services found that the new convention center will have an economic impact of $137 million annually when combined with the hotel. Without the hotel, the economic impact of the convention center will be about $63 million a year. The hotel essentially doubles that impact for our city.
The total cost to build the hotel is $235 million. Omni’s investment of $150 million is one of the largest private investments in Oklahoma. Public participation is necessary to close the gap in the project cost after the private investment by Omni. Oklahoma City will provide a one-time participation of $85.4 million, which is 36 percent of the total cost of construction. This is one of the lowest rates in the country compared to similar projects. The Omni Fort Worth had 43 percent and the Kansas City Hyatt had 52-percent public participation.
The public participation won’t increase taxes or affect taxpayers directly. More than half of the money will be generated by the hotel itself through the additional revenue and taxes that it generates. Other sources include revenue streams from other successful economic development projects, such as Bass Pro and the Skirvin. Like these development deals, Oklahoma City will benefit from consumer spending and related impact as the hotel attracts visitors and conventions. There is also an opportunity for the city to benefit from the success of the hotel. For 25 years after the fifth year of occupancy, Omni will pay the city’s Economic Development Trust 10 percent of net operating income in excess of $20 million with a cap of $15 million.
The City Council’s decision to move forward with a convention center hotel will maximize the potential of the convention center, offering recurring benefits that will enhance Oklahoma City’s economy for decades.
Cathy O’Connor is the president of The Alliance for Economic Development of Oklahoma City.