Metro has a bad habit of playing with OPM (other people's money to the late comers of political waste). In this instance, over $100 million from several public sources, the bulk coming from Metro.
While Metro calls the convention center "an internationally-treasured regional asset". Metro's precious jewel seems to be more zirconium than diamond. On the "liars' page" where the marketing staff sell the projects to the public (in business they are called pro-formas) with half truths and smiley faces, there is a chart comparing the failed 2007-2009 Headquarters Hotel with the current Mortenson Development/Hyatt Hotel deal. On all counts, the new deal exceeds the old one by leaps and bounds - even stating what is a plus for the new project is now a negative for the old one because having fewer and smaller conference banquet and meeting rooms will make the project less expensive. Less expensive for who?
The main point that Metro wants us to understand is that the Convention Center Hotel will be less risky and less costly for the public. "The key difference between the two projects is that only a minimal amount of public investment is currently being proposed." And rather than stealing business from existing local hotels who get no public subsidy, Metro throws this bone: "[The new hotel will] generate new demand for area hoteliers, which, in turn, boosts business for local restaurants, retailers, transportation services, recreational outfitters and many others".
We know a lot from the Sunday Oregonian article and the Politifact research into the public funding. "One of the opponents’ claims, published on the website of OUCH -- ("Our Unfortunate Convention Hotel") caught our eye: "Taxpayer subsidy for OCC hotel jumps $100 million in closed-door sessions. $8 million to $130 million with zero public input. OUCH, that hurts." ... "But the largest piece of a subsidy package will be revenue from a tax on hotel stays that will be redirected to pay back $60 million in revenue bonds to be issued by Metro. ". Politifaxt explains the the bonds will cost a total of $121 million including interest over their 30 year term. Another column in the Portland Mercury reminds us that taxpayers are on the hook if the hotel is a failure. Following this weekend's riot and killing at Lloyd Center, what risk would there be?
What revenue you ask? Good question, considering the OCC on its own does not make any money - without the hotel tax revenue coming in to help balance the OCC budget, the annual debt for operations would be huge. So if the hotel tax is to be diverted to pay revenue bonds (for 30 years), how will the OCC quit bleeding red ink? With more business? Only if its fixed costs and capital expenses are level and a big profit can be made from any newly created convention business. But it's still a chunk of change when the debt service is added. I hope those international guests who treasure our asset with come with loaded pockets to buy hot dogs and expensive bottled water at the concession stands.
Someone else with more experience reading budgets can correct me (please). I hate robe wrong, but I hate it worse if I leave mistakes uncorrected.), but take a look at these reports: MERC Commissipn Meeting, August 2013 (June YTD for fiscal 2012-2013), and the Oregon Convention Center Annual Report.
One last comment about.a Lake Oswego connection - besides another example of Metro's give-always to private entities at our expense); former Mayor, Judie Hammerstad is on the Metropolitan Exposition and Recreation Commission (MERC) that oversees the OCC, formerly as its chair, and currently as its vice chair, though she is still listed as chair on the website, so she's at least one or the other