Despite fierce opposition, officials are set to approve $80 million in subsidies for a 600-room hotel.

The City Council will consider a measure Metro has already approved: pumping $80 million of taxpayer money and the State Legislature agreed to $10 million on the last Bill of the Session known as the "Christmas Tree Bill" into a proposed $198 million hotel. The transaction would give the multibillion-dollar Hyatt Hotels Corp. ownership of the hotel and all potential profits, while counting on public funding to repay the project’s debt.

On Thursday, Multnomah County commissioners will hold their first hearing on the issue. Metro, the city and the county all need to approve any convention center hotel. taxpayers have already spent $200 million building the convention center, which operates at a large and growing loss. Tourism boosters say a new hotel is necessary for the convention center’s success and for the continued development of the city’s convention trade. Metro Council President Tom Hughes, whose agency operates the nearby money-losing Oregon Convention Center, sees the property as a route to respectability for his agency—and a second term for himself.

For a hotel to be built, the City Council and county commission must approve the deal.
Their approval is necessary because all three governments—Metro, the city and the county—share in the hotel taxes that would be used to help finance the hotel’s construction.
The way the deal is structured, Hyatt will pay about $120 million for a hotel that will cost nearly $200 million."They’re buying a brand-new asset for 60 cents on the dollar,” says Bob Scanlan of Portland real-estate investment firm SKB."That’s an attractive proposition.” But the most controversial part of the deal is the $60 million Metro Council President Tom Hughes wants to borrow to help fund construction."Do the voters of this region want to give a multibillion-dollar corporation tens of millions in subsidies?”"Probably not.”

In 2009, records show Schlesinger bought land next to the convention center for $10.75 million. The purchase was highly leveraged—he borrowed $9.7 million and agreed to pay it back in 18 months. Meanwhile, Schlesinger came under pressure. In December 2010, his company lost a high-profile contract to run the city’s parking garages. Then last year, court documents in a family dispute showed the family’s parking company had lost millions of dollars.

With interest costs mounting on the short-term loan he used to finance the hotel property—and has had to extend three times—Schlesinger worked behind the scenes to help Metro resuscitate the project and aligned himself with Mortenson Development of Minneapolis and Chicago-based Hyatt Hotels. The development team hired Gallatin Public Affairs, an influential Portland lobbying firm.

Cover Story Willamette Week September 18th, 2013 by NIGEL JAQUISS
www.wweek.com/portland/article-21164-heartbreak_ho....html


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