Convention hotel may face vote

Convention center hotel:  Too early to say how subsidy referendum would affect project, Metro says
Oregonian, December 19, 2013

"Backers of a proposal to publicly back a Hyatt hotel at the Oregon Convention Center say they’re not adjusting their plans after a group of opponents announced an effort Thursday to put the subsidy to voters."

The Public-Private Partnerships (PPP) that keep springing up, however nice they sound, are based on debt incurred by the taxpayers - without having the ability to vote on them.  And that's the way the government wants it these days.  The option would be to go to the voters to ask for a general obligation bond for each set of projects, and have to justify the project and the expense.  Horrors.  We should all have the ability to vote on these corporate welfare programs - it's our money after all.


"These convention center hotels are very high-risk propositions," said Sandeep Kaushik, a spokesman for the group. "The way the deal is structured, if the hotel is successful, this already highly profitable multinational corporation is going to make some money. And if it doesn't succeed, the taxpayers are going to be on the hook."

The paragraph says it all - profits flow to the developer, the risks go to the tax payer.  Only government would make a deal this bad, but it's Other People's Money at risk and they don't have any skin in the game.  The only thing this deal says to me is that Metro has too much of our money to spend.  And they aren't very smart.

"In a written statement, Metro President Tom Hughes called the group a "small but well-funded" minority and defended his agency's record on promoting tourism, pointing to a 76.5 percent occupancy rate at downtown hotels this year at an average daily room rate of $121.88."

Isn't this what an entrenched power group always says when they face opposition from a group?  "It's just a minority" (ignore them), "well-funded" (must be businesses or rich people, not the public behind this - ignore them), and, though Hughes did not say so, you can add "dangerous," "emotional," and so forth.  Anything to marginalize and diminish the opposition.  Typical political rhetoric.

"The hotel project is a jobs initiative," Hughes said. "Beyond the project itself, many local jobs will be created and sustained by the new convention business that will come to town because of the hotel," Hughes said. "With the addition of 5 to 10 new national conventions meeting in Portland each year, the local economy will experience an infusion of $120 million more each year in tourist spending."

How many of the jobs in the tourist industry are living-wage jobs?  If Metro or any other layer of government wanted to create a "robust economy," there are higher paid, value-added industries that should be fostered.  They can't keep shelling out public subsidies to developers / developments with retail shops, restaurants and tourism as the employment base and say that will elevate community prosperity.  

"The city of Portland, Metro and the state would kick in $18 million in loans and grants, but the biggest subsidy would come in the form of $60 million in Metro revenue bonds to be paid back with the lodging tax.

Mortenson and its partners would put $119.5 million toward the $197.5 million project."

I am not a mathematician, but that's about a 40-60 split with public subsidies making up a cool 40% of the cost of development, mot including interest on $60 million of debt.  Does anyone wonder why hoteliers in Portland might be a bit miffed that their competition gets such a deal?  Using public money, the government gets to pick the winners and losers - it's called CRONY CAP ITALSM.  It's such a bastardization of the concept of capitalism it's unfair to use the word at all.