OKC approves deal to finance convention center hotel

By William Crum

The Oklahoman

 

The Oklahoma City Council voted Tuesday in favor of public financing for a new downtown hotel, under the Omni luxury brand, to be built adjacent to the MAPS 3 convention center.

 

The vote was 7-2.

 

Consultants and experts in the convention business say a headquarters hotel is necessary to the success of the convention center, which is financed by the 1-cent MAPS 3 sales tax.

 

Oklahoma City is to provide $85.4 million in financing, while Omni invests $150.1 million.

 

Cathy O'Connor, president and chief executive officer of The Alliance for Economic Development of Oklahoma City, said the hotel fits the concept behind MAPS 3.

 

"One of the main goals of the MAPS 3 projects was to spur private investment in and around the investments" made by the city, she said.

 

"This project is designed to create new economic impacts and benefits to Oklahoma City," O'Connor said, "by attracting additional conventions, visitor, trade show, public exhibition, and other types of public events that require a large quantity of hotel rooms."

 

"It will generate increased tourism to Oklahoma City, which is one of the fastest-growing components of our local economy," she said.

 

The 600-room, $235.5 million hotel is to be owned and operated by Omni, which operates the Dallas Omni, headquarters hotel for the Dallas Convention Center.

 

Oklahoma City is to issue bonds, to be repaid over 25 years, for its share of the construction cost.

 

Construction is to begin using funds raised by Oklahoma City, then completed with the money Omni brings to the project.

 

The city is to repay the bonds by drawing on revenue generated by the hotel and on a package of other finance vehicles, including tax-increment finance districts that capture taxes generated by redevelopment of blighted property.

 

Analyses project the MAPS 3 convention center's performance and economic impact will be significantly better with a headquarters hotel across the street. Plans are to connect the buildings with a skyway.

 

The deal requires the city to build a parking garage in the convention center complex. The Omni is to have 450 spaces allocated to it in the garage, which also will serve Chesapeake Energy Arena. The hotel will pay market rates for the spaces.

 

O'Connor said the hotel is to include 50,000 square feet of ballroom and meeting room space, complementing the convention center and increasing its flexibility.

 

Up to six food and beverage outlets are to be included. Total area is to be 570,000 square feet.

 

Ward 1 Councilman James Greiner and Ward 2 Councilman Ed Shadid opposed the financing plan.

 

Shadid said the plan included hidden costs.

 

He cited studies that he said show Oklahoma City is at a disadvantage for attracting convention business, because of factors including poor airline connections, less than adequate public transit and weather.

 

Shadid said the council should allow the public to vote on the financing plan.

 

"It is their money," he said. "They deserve to have a say."

 

Ward 5 Councilman David Greenwell questioned the need for a public vote, saying the hotel deal did not call for a tax increase.

 

Ward 3 Councilman Larry McAtee, chairman of the Oklahoma City Economic Development Trust, said he generally was averse to debt and generally favored limited government intervention in markets — but on balance, he said, the Omni agreement "is a solid business deal."

 

Ward 8 Councilman Mark Stonecipher characterized it as a "defining moment" in the city's growth.