We would get a hotel there... They are popping up everywhere without any public incentives at all. The Bricktown Marriott Renaissance or similar would probably fall all over themselves from that spot on the boulevard, directly across from the arena and next to the convention center... And facing a huge new park.

It wouldn't be an Omni, might be a bit smaller, etc. But is that difference really worth $200 million in tax dollars when we can't even fund our core servcies?

Just seems especially twisted to through nearly $200 million (once you count the parking garage and everything else) at a hotel operator when we have tons of them doing this all around with zero incentives.

Good luck booking decent conventions with no staple hotel with at least 500+ rooms. The phones will go silent. The emails will go unread and the convention center will end up as a local gathering place for the homeless.

Good luck booking decent conventions with no staple hotel with at least 500+ rooms. The phones will go silent. The emails will go unread and the convention center will end up as a local gathering place for the homeless.

Right, I understand that is important and a fair point.

I will also say that this convention center is being built and paid for; no debt to service. So is it the end of the world if we do less convention business?

We are already going to be miles better than we were with the Cox Center *and* will have gained the ability to redevelop the Cox site.

It seems this has always been presented as a false binary: Either we give tons of money to someone like Omni or the convention center will fail.

There is no way it will fail. Likely not get as many conventions as with a cc hotel, but how can you even measure and put a value on that? And it would have to be compared to say a 300-room directly adjacent hotel with some sort of block-booking arrangement, because it seems like just offering the land would result in a line of hotel developers who to date have not needed a dime in public money to build these dozens of hotels in the core.

Everything regarding 'economic development' is presented in these types of terms. Either we gift tens and hundreds of millions to developers and corporations or we get nothing at all. And we all know that is not the case because we have tons of examples to the contrary.

Good luck booking decent conventions with no staple hotel with at least 500+ rooms. The phones will go silent. The emails will go unread and the convention center will end up as a local gathering place for the homeless.

Correct me if I'm wrong, but aren't most conferences OKC hosts local or regional? Is there evidence that a new convention center will attract national or international conferences? I attend about 6-8 conferences a year and none of the big ones will likely ever consider OKC. Just curious how much a new convention center hotel really moves the needle.

We don't know that this is 135 mil. If they take the money from an existing okc fund we don't pay ourselves interest. 2 weneed a parking garage either way and that money 27 mil of the 37 will come from the copta budget for building parking garages. (Nothing to do with core services)

The worth of the CEO of Omni is not relevant in any way.

Councilman Ed Shadid's Facebook page comment on Lackmeyer article:

Robert Rowling, the owner of Omni Hotels, is the 67th richest human on the planet with a net worth approaching $7 Billion. He could do this deal without public subsidies. Instead, he engages in predatory, parasitic behavior in which he extracts enormous sums of money from cities like OKC which are struggling to finance core services.
Assuming that the city is able to sell the revenue bonds at 4% interest, the estimated cost to the city is $135 million when you include interest costs. In addition, the city must spend all of its money before Omni spends a dime thereby allowing Omni to shift interest costs to the city. In addition, the city will essentially provide an interest free loan to Omni who will buy the land over a 25 year period. In addition, the city must builtd a $37 million parking garage plus acquire the land for the parking garage from OG&E. But we are not through: the City is prohibited from subsidizing any hotel in an area defined by Omni which includes essentially all of downtown threatening adaptive re-use projects such as those contemplated at Spaghetti Warehouse etc...Finally, and most importantly, if the hotel does not perform as well as projected and there is a shortfall in paying back our loan from the proceeds, then the shortfall must be paid from the city's general fund which will further erode delivery of core services to our citizens. Imagine a scenario in which the owners of the Thunder demand a new arena from taxpayers (coming in the next 2-6 years IMO) or else they would have to consider relocating to a different area within the Greater Metro or even to another city. Our debt on this hotel provides enormous leverage against us.
OKC is running out of time to diversify its economy. We already face the headwinds of nation leading cuts to public education, and by extension, academic research. If we do not want to end up like West Virginia with its over reliance on a commodity which is going to plummet in value over time, we must diversify our economy as quickly and efficiently as possible. Imagine what an investment such as this might accomplish in an Innovation District centered around the OU Health Sciences Center where industries congregate, exchange ideas and technologies, and spin-off/create new companies. One biotechnology company alone (Selexys), which spawned from such a collobaration, recently attracted a $665 milion investment from Novartis. It is heartbreaking to see OKC put all of its incentive eggs in one basket. With this massive investment in a dying industry full of minimum and low-paying jobs, we will have no powder left to help create the 21st century city and economy our people deserve.

Wow, a sane councilman. This is a BAD "investment of the people's money". OKC growth should warrant investment by a hotelier that believes in the upward trajectory of the city. I wholeheartedly agree with Ed Shadid as should any fiscally responsible citizen. Reject this nonsense, period.

We don't know that this is 135 mil. If they take the money from an existing okc fund we don't pay ourselves interest. 2 weneed a parking garage either way and that money 27 mil of the 37 will come from the copta budget for building parking garages. (Nothing to do with core services)

The worth of the CEO of Omni is not relevant in any way.

This is incorrect. Omni does not pay a penny until the City of OKC has exhausted its $85 million commitment. We don't have the money. We have to go borrow it and use future revenue (the property tax the as of yet unbuilt Omni hotel will pay into the TIF, the sales tax from the as of yet unbuilt hotel, some of the hotel/motel tax from the as of yet unbuilt hotel etc..) COTPA has said they do not have enough borrowing capacity to build a $37 million parking garage and that is before we talk about acquiring the land from OGE (I'm sure they will be generous :)

The worth of the owner of the privately held Omni Co. is relevant in that he has accumulated an amount of wealth which would allow him to complete the deal without a subsidy. It's not that he needs all this public money, its that he wants it while espousing and financing innumerable far right political candidates who espouse whining about government largesse.

This is incorrect. Omni does not pay a penny until the City of OKC has exhausted its $85 million commitment. We don't have the money. We have to go borrow it and use future revenue (the property tax the as of yet unbuilt Omni hotel will pay into the TIF, the sales tax from the as of yet unbuilt hotel, some of the hotel/motel tax from the as of yet unbuilt hotel etc..) COTPA has said they do not have enough borrowing capacity to build a $37 million parking garage and that is before we talk about acquiring the land from OGE (I'm sure they will be generous :)

The worth of the owner of the privately held Omni Co. is relevant in that he has accumulated an amount of wealth which would allow him to complete the deal without a subsidy. It's not that he needs all this public money, its that he wants it while espousing and financing innumerable far right political candidates who espouse whining about government largesse.
Actually the city has money in all different pots. And copta has said they have 27 mil of the 37 mil in capability

We need a convention hotel. Period. And our deal with them is better than most

At this point, why shouldn't the city tell Omni to pound dirt and build and run the hotel themselves? We are already paying for it, why give any company a free contract to operate it and keep the profit?

I have mentioned this repeatedly in this thread. Not only do we need adequate room blocks to be able to book conferences and conventions, but to be competitive the prices of these rooms MUST be discounted below market rate. This is standard in the industry. And you CANNOT force a privately-funded hotel to build beyond their natural booking capacity (an Omni would probably build 200-300 rooms if they came at all), and you CANNOT force discounted rooms unless the city is a partner. Public participation allows for more rooms, and allows for discounted blocks.

Regarding not having an attached HQ hotel, if you don't build one it truly WOULD be a massive waste to build the convention center itself, in the first place. You're out of the game, period.

Regarding bookings, even our currently sorry facilities attract national conferences. We lose many many many events currently because of inadequate facilities. Planners want to come here because of our central location and exciting, walkable downtown, but they just can't. Plus, regional and statewide conferences themselves are very good business. These people are bringing money to our economy and dropping it off. It is incredibly clean economic development, which grows our tax base using other people's money. Nobody talks about the influx of taxes and lodging/entertainment conferences and conventions bring when criticizing this effort. By doing so they are being intellectually dishonest.

And it's not just conferences we miss out on. The NCAA and other sports organizations want desperately to make OKC a regular stop for events like wrestling championships, volleyball championships, cheerleading, gymnastics, but the Cox Center doesn't have adequate ceiling heights or clear span. We will see a flood of these events upon completion. Several years ago the NCAA suspended some of their technical requirements for wrestling championships because they wanted so badly to be here. Ask downtown merchants or the City's budget director about the economic impact of THAT event. I'll promise it blew away Thunder games; even playoff games.

As long as we're talking about building inadequacies, we'd might as well discuss the loading dock situation. Currently the Cox Center can't host simultaneous events that require load-in, because they are on top of each other. Our event dates are likely to double or triple with the new facility, and that's not Chamber-driven blue sky election promises. These are real things the CVB sales staff deals with daily.

So, to summarize: incentives are not being used to make some rich guy richer. They are used to entice a hotel to build larger than they would otherwise, to sell rooms below market rate, all while guaranteeing success for all parties concerned, INCLUDING taxpayers. And if we don't build the hotel, we'd might as well not build the CC. Which would be a MASSIVE mistake, and which would turn away ongoing, very substantial economic impact, jobs and increased sales tax revenue all paid for by people who don't live here.

Perhaps strangely, the thing that struck me when reading the high points of the agreement was the restrictions on incentives or subsidies for any other downtown hotels as defined by Omni. It seems that the city is likely to run up against instances like The Spaghetti Warehouse building several times in the next twenty years. Kinda sticks in my craw a bit. Chad?

I have mentioned this repeatedly in this thread. Not only do we need adequate room blocks to be able to book conferences and conventions, but to be competitive the prices of these rooms MUST be discounted below market rate. This is standard in the industry. And you CANNOT force a privately-funded hotel to build beyond their natural booking capacity (an Omni would probably build 200-300 rooms if they came at all), and you CANNOT force discounted rooms unless the city is a partner. Public participation allows for more rooms, and allows for discounted blocks.

Regarding not having an attached HQ hotel, if you don't build one it truly WOULD be a massive waste to build the convention center itself, in the first place. You're out of the game, period.

Regarding bookings, even our currently sorry facilities attract national conferences. We lose many many many events currently because of inadequate facilities. Planners want to come here because of our central location and exciting, walkable downtown, but they just can't. Plus, regional and statewide conferences themselves are very good business. These people are bringing money to our economy and dropping it off. It is incredibly clean economic development, which grows our tax base using other people's money. Nobody talks about the influx of taxes and lodging/entertainment conferences and conventions bring when criticizing this effort. By doing so they are being intellectually dishonest.

And it's not just conferences we miss out on. The NCAA and other sports organizations want desperately to make OKC a regular stop for events like wrestling championships, volleyball championships, cheerleading, gymnastics, but the Cox Center doesn't have adequate ceiling heights or clear span. We will see a flood of these events upon completion. Several years ago the NCAA suspended some of their technical requirements for wrestling championships because they wanted so badly to be here. Ask downtown merchants or the City's budget director about the economic impact of THAT event. I'll promise it blew away Thunder games; even playoff games.

As long as we're talking about building inadequacies, we'd might as well discuss the loading dock situation. Currently the Cox Center can't host simultaneous events that require load-in, because they are on top of each other. Our event dates are likely to double or triple with the new facility, and that's not Chamber-driven blue sky election promises. These are real things the CVB sales staff deals with daily.

So, to summarize: incentives are not being used to make some rich guy richer. They are used to entice a hotel to build larger than they would otherwise, to sell rooms below market rate, all while guaranteeing success for all parties concerned, INCLUDING taxpayers. And if we don't build the hotel, we'd might as well not build the CC. Which would be a MASSIVE mistake, and which would turn away ongoing, very substantial economic impact, jobs and increased sales tax revenue all paid for by people who don't live here.

Currently 1/11 of the Hotel/Motel Tax (about $1.5 million/year) is set aside to give to conventions to lure them here including potentially offsetting the price of rooms. If you are correct that one should not build a convention center without building a massively publicly subsidized convention center hotel, then why was that not discussed during the MAPS3 campaign? Why wasn't money for the hotel placed into the MAPS3 program like members of the City's Finance Department asked to be done (since they knew in 2009 that this day was going to come) at the time. You are basically making the case that the Chamber who ran the campaign lied to the people of OKC when they claimed that by voting on a convention center in the 2009 MAPS3 vote, we would triple the City's convention business while omitting that their study done that year stated that a publicly subsidized hotel would be needed to achieve those gains (even though no city had ever doubled, much less tripled their convention business). They claimed the convention center was $240 million and would be paid for debt free knowing full well that this day would come and the City would need to borrow heavily to complete the project. Nothing could be further from the spirit of the MAPS program (pay as you go, no debt, no interest payments). The reason that the hotel was left out of the MAPS campaign is, of course, that the people of OKC would NEVER have supported this boondoggle and the Chamber knew it. So they lied to the people of OKC and now advocates such as yourself are stomping their feet saying we've come too far, it would be a waste of money not to borrow heavily and complete it right and you will win the battle as this is likely to get 5 votes on Council but likely will lose the war as the MAPS program as we knew it is over.

If the Omni would build 300 rooms rather than 200, shouldn't the subsidy cover 40% of the cost rather than all of it?

^^^^^^
I was saying that the natural size of the Omni or similar flag - based only on demand - would probably be 200-300. That is, if they located here at all. It was suggested above that perhaps organic hotel growth could fill the need. Not true, because a business-minded hotel flag would only build what they could expect to book nightly at market rate.

To attract conferences and conventions, the CVB needs to be able to offer room blocks at below market rate. You cannot expect a private business to take on this responsibility/risk without some guarantees. They are businesses, not charitable organizations. And without being able to block rooms, the convention center under performs, becomes an operational burden and does not return worthwhile performance for the taxpayers who built it. If we do this the right way, the convention center and hotel actually pay for themselves and more. Few if any MAPS projects have a chance to drive as much in the way of sales tax and new dollars in the economy, and some have no chance whatsoever. This benefits taxpayers, in the long term.

Also worth mentioning is that the City will hopefully directly recoup much of this investment via payments from the hotel operator. This is very similar to how the City has received back about $8 million of the $22 million it put up for renovation of the Sirvin, and I don't think anyone today would call that deal a bad one. This is even more important, as it helps guarantee the success of the city's largest-ever MAPS project.

Look at it this way: few here question the value of the streetcar. It's a $120 million project which might not even have a fare box. No way does it pay for itself. Heck, it almost certainly won't even pay for its own operation..?

So why don't we here call it a boondoggle? Well, it's simple; we have bought into its value as an economic development driver. This is something that is going to be difficult to quantify, yet will be undeniable to those who watch closely.

Most of the people who I hear criticizing the streetcar do it because they don't see themselves riding; they don't see how it will benefit them directly.

The CC and attached hotel doesn't resonate with people here the same way, because it's hard to picture yourself using it or seeing direct benefit. Yet I am saying we ALL benefit. It will drive new jobs, new tax revenue, new money circulating in the economy. It will have a ripple effect when it introduces people (convention and event attendees) to our city for the first time and sheds a positive light on us. These people will return here for trips (this ALREADY happens thanks to conferences and sporting events we already host), and they will talk OKC up to friends and family. We KNOW this. It already happens.

This is incredibly valuable to our city, which presently still suffers from an image problem; mostly lack thereof. There are both tangible and intangible benefits, but either way the CC and the Omni are important for OKC. Just because you don't personally see yourself benefitting is about the most lousy of reasons to not support something that benefits the community as a whole.

I'm actually less upset with this announcement than I am the totally stupid MAPS idea that is moving forward. Completely lacking imagination, it will set back the MAPS brand, in my opinion. Others may disagree but "MAPS for Streets" is just a total miss and I'm not inclined to support it. That being said, this is an excessive amount of public investment and this hotel had better be a freaking showstopper. One thing they could do is force Omni to add a few floors of for-sale housing to the mix. Then at least we could see mixed use that may have an additional ongoing benefit to the Park and future development there.

While we are at it, I'm actually quite disgusted with Devon Energy and Continental and their efforts to involve themselves in the state budget negotiations. How does this impact OKC? Because OKC is the state's largest school district and these corporate behemoths have no problem pushing their tax-break agenda at the state while OKC is doubling class sizes and trying to run a major school system on a budget one would expect in Juarez. That the OKC Chamber recently sent me an invitation for a "State of the Schools" forum, with a panel featuring no Democrats, even though most of our city's legislators are Democrats, and sponsored by Devon and Hobby Lobby, is mindlessly insulting to anyone who is concerned about the total disregard for common and public education we are witnessing. You could say my warm fuzzy feelings for our city's leadership are being tested right now, and you would be right.

Correct me if I'm wrong, but aren't most conferences OKC hosts local or regional? Is there evidence that a new convention center will attract national or international conferences? I attend about 6-8 conferences a year and none of the big ones will likely ever consider OKC. Just curious how much a new convention center hotel really moves the needle.


They want to compete with other 2 tier cities for conventions. They can't do that with the Cox CC. and they won't be able to do it without a staple hotel attached the the new CC. That is just the way it is. If you want to stay status quo then fine. If you want to step it up and compete with other cities (most a bit larger than OKC) then you do it right.

They want to compete with other 2 tier cities for conventions. They can't do that with the Cox CC. and they won't be able to do it without a staple hotel attached the the new CC. That is just the way it is. If you want to stay status quo then fine. If you want to step it up and compete with other cities (most a bit larger than OKC) then you do it right.

The new convention center is a huge win for OKC regardless of Omni. The real question is: Is the incremental difference the Omni will bring the best use of what looks to be close to $200 million?

There has to be a limit, but not sure what it should be. People had been prepared for $50 million and we are now way off the reservation.


BTW, this is a great discussion and the only place this is happening, at least in public.

I'm actually less upset with this announcement than I am the totally stupid MAPS idea that is moving forward. Completely lacking imagination, it will set back the MAPS brand, in my opinion. Others may disagree but "MAPS for Streets" is just a total miss and I'm not inclined to support it. That being said, this is an excessive amount of public investment and this hotel had better be a freaking showstopper. One thing they could do is force Omni to add a few floors of for-sale housing to the mix. Then at least we could see mixed use that may have an additional ongoing benefit to the Park and future development there.

While we are at it, I'm actually quite disgusted with Devon Energy and Continental and their efforts to involve themselves in the state budget negotiations. How does this impact OKC? Because OKC is the state's largest school district and these corporate behemoths have no problem pushing their tax-break agenda at the state while OKC is doubling class sizes and trying to run a major school system on a budget one would expect in Juarez. That the OKC Chamber recently sent me an invitation for a "State of the Schools" forum, with a panel featuring no Democrats, even though most of our city's legislators are Democrats, and sponsored by Devon and Hobby Lobby, is mindlessly insulting to anyone who is concerned about the total disregard for common and public education we are witnessing. You could say my warm fuzzy feelings for our city's leadership are being tested right now, and you would be right.
You sound just disappointed and pissed in general at everything tho

Where do we go from here?

I find it difficult to swallow. Tulsa now has three 500 room hotels (Double Tree, Hyatt Regency, River Spirit Casino Resort). OKC needs to get off this 'holier-than-thou art' attitude.

Make a deal with the Chickasaw Tribe:


Give them the museum to develop & the surrounding land . Allow them to develop the convention center conference hotel. I bet they would give you 1,000 rooms (500 ft., high skyscraper) and the city could have its cake and eat it too...

Where do we go from here?

I find it difficult to swallow. Tulsa now has three 500 room hotels (Double Tree, Hyatt Regency, River Spirit Casino Resort). OKC needs to get off this 'holier-than-thou art' attitude.

Make a deal with the Chickasaw Tribe:


Give them the museum to develop & the surrounding land . Allow them to develop the convention center conference hotel. I bet they would give you 1,000 rooms (500 ft., high skyscraper) and the city could have its cake and eat it too...

I think this is a great idea. OKC should really bite the bullet and embrace a real identity and take on a more Native American culture. Think of how Seattle is sort of the video game capital of the US, San Fran is the LGBT center of the US, Austin the festival Mecca, LA the grand convention city and Vegas the epic anything goes city. Fort Worth has its Make OKC Native American again. I would LOVE for OKC, and the state for that matter, to embrace more Native American culture. Id much rather give a tribe huge amounts of TIF than a large hotelier. Imagine having a sort of Native American district to combat Bricktown as our two on the map districts.

I know I'm just wishful thinking here, but it would be pretty cool.

OKC should really bite the bullet and embrace a real identity and take on a more Native American culture. Think of how Seattle is sort of the video game capital of the US, San Fran is the LGBT center of the US, Austin the festival Mecca, LA the grand convention city and Vegas the epic anything goes city. Fort Worth has its Make OKC Native American again. I would LOVE for OKC, and the state for that matter, to embrace more Native American culture. Id much rather give a tribe huge amounts of TIF than a large hotelier. Imagine having a sort of Native American district to combat Bricktown as our two on the map districts.

I know I'm just wishful thinking here, but it would be pretty cool.

Bite the bullet? "Take on" on Native American culture?

OKC doesn't get to choose to try on Native American identity for tourist dollars and "identity." This is one of the biggest problems with how many non-Indigenous Oklahomans view and (mis)understand Indigenous cultures. Cultural appropriation is a serious problem and the primary way the state has engaged with Indigenous peoples is through using them as bumper stickers and slogans. If you want to know more about Indigenous businesses and cultures, ask them about what they're already doing.

OKC should amplify the businesses, cultures, and voices of Indigenous people... but on their terms.

Bite the bullet? "Take on" on Native American culture?

OKC doesn't get to choose to try on Native American identity for tourist dollars and "identity." This is one of the biggest problems with how many non-Indigenous Oklahomans view and (Mia)understand Indigenous cultures. Cultural appropriation is a serious problem and the primary way the state has engaged with Indigenous peoples is through using them as bumper stickers and slogans. If you want to know more about Indigenous businesses and cultures, ask them about what they're already doing.

OKC should amplify the businesses, cultures, and voices of Indigenous people... but on their terms.
Well said.

Bite the bullet? "Take on" on Native American culture?

OKC doesn't get to choose to try on Native American identity for tourist dollars and "identity." This is one of the biggest problems with how many non-Indigenous Oklahomans view and (mis)understand Indigenous cultures. Cultural appropriation is a serious problem and the primary way the state has engaged with Indigenous peoples is through using them as bumper stickers and slogans. If you want to know more about Indigenous businesses and cultures, ask them about what they're already doing.

OKC should amplify the businesses, cultures, and voices of Indigenous people... but on their terms.

Good!

Amplify that conference hotel--pay up or shut up. Omni's got a testicle vice grip on OKC.

Bite the bullet? "Take on" on Native American culture?

OKC doesn't get to choose to try on Native American identity for tourist dollars and "identity." This is one of the biggest problems with how many non-Indigenous Oklahomans view and (mis)understand Indigenous cultures. Cultural appropriation is a serious problem and the primary way the state has engaged with Indigenous peoples is through using them as bumper stickers and slogans. If you want to know more about Indigenous businesses and cultures, ask them about what they're already doing.

OKC should amplify the businesses, cultures, and voices of Indigenous people... but on their terms.

I don't disagree. Take what I said however you want. I'm not saying I want the Chickasaws selling headdresses to Christina Fallon in Bircktown. I don't want appropriation. My vision would be more of an actually Native American city. Think Farmington New Mexico, but not a reservation. I get the Oklahoma Tribes can't just move their holdings to OKC.

I want OKC to embrace it's history more. Think the Gaslight District in San Diego or the Power and Light District in Kansas City. Unfortunately there isn't just a tone of tribal history in OKC proper, but we could make it work.

When I say bite the bullet, I mean truly make a name for the city. And yes, I say embrace the gimmick somewhat. People think OKC has the Cowboys and Indians heritage, so give any OK based tribe the reins and the proper financing, let let them create a REAL new age urban Native American district. I think that would be pretty awesome both for OKC residents, the state, and and tribes involved. I would much much much much rather give my money to a native OK tribe than to Omni.

We can't change our history. It is what it is.

Embrace our history & heritage for whatever it's worth. The tribes don't owe us a thing. They do have more to offer in experience & expertise in the area of hospitality; why not explore that avenue.

But wait there's more...

Just about the time the Convention Center we voted for is built, and the Hotel Boondoogle we didn't vote for and don't want is put into use, we'll be told it's all inadequate and just won't work, how we just can't live up to OKC's potential if we don't spend millions and millions more on expanding the Convention Center.

If only someone had studied this folly and warned us. Oh yeah: http://www.upenn.edu/pennpress/book/15221.html

Oklahoma can't "embrace" our history by deciding to turn things "native". Although, "using" tribes might be the most historically accurate thing to do.

Tribes could be a great resource. But they need to be approached as full partners and equals, not as resources and utilities.

You have to be careful when using studies, articles, books, etc. with topics such as this. Everything and anything can be slanted to the left or right depending on the writer's preference. Everything from time frames to which metro areas they are using for these examples can be added or subtracted to fit their agenda. Each cities case is different from the next and studies like this are useless because no two cities situations will match perfectly.

There are a lot of pieces & moving parts that complement a city's economic growth; a new convention center complex is one piece; more of an investment. Tourists, community pride & novelty pieces like the Riversport Rapids, Modern Streetcar & a massive downtown park in the core add to the 'quality of life' of your city.

Dallas-Fort Worth loved it when Oklahomans hit their market by the droves to enjoy tax free day. It took us decades to figure out a simple formula to keep that money in our local economy.

The more new money (out-of-state) you infuse (not circulate) into the Oklahoma City economy, the better off we will be for future growth.

Dallas didn't become Dynamic Dallas overnight. Fort Worth's fat sister swallowed it all--sword, line, hook & sinker.

Oklahoma City needs to continue to invest in itself. You want more development & corporate growth like GE Global Research; then you have to invest in those complementary pieces that will make your city WHOLE. The Chesapeake Energy Arena has had an impact on OKC's image. It made the NBA possible, it changed the perception of OKC.

Maybe I've missed it and I apologize for the lack of time to read the entire thread, but are there cities with major convention centers (other than Vegas and NYC), where a convention center Hotel was NOT subsidized? If I recall,both Dallas and Denver paid far more than what OKC is being asked to pay.

^^^^^^
Yes, it is very standard, for reasons I have outlined many times in this thread, not that anyone has bothered to actually read and digest them since their minds are already made up. And yes, this group of incentives is more favorable to OKC than many/most, as there is no obligation to the City for ongoing operational subsidy plus a real opportunity for much of the investment to be paid back to OKC.

Subsidies may be standard but what I'd like to see is a summary of of the nature of these subsidies for comparison (dollars and other terms and what was built), then the return on those investments over time.

N/m

^^^^^^
Yes, it is very standard, for reasons I have outlined many times in this thread, not that anyone has bothered to actually read and digest them since their minds are already made up. And yes, this group of incentives is more favorable to OKC than many/most, as there is no obligation to the City for ongoing operational subsidy plus a real opportunity for much of the investment to be paid back to OKC.

I don't know about other people, but for me the problem is not the basic concept of a subsidy.

The problem is that this hotel is build on a basis of dishonesty. The Chamber, knowing full and well that it wasn't true, pushed the convention center as part of maps to be a debt free enterprise. They did that knowing that they would eventually come back and say that this debt free center is worthless unless we go into huge debt to complete it via a hotel.

The two things that irk me most are 1) the prohibition of incentives for other projects and 2) the lack of any residential component for this amount of subsidy.

I don't know about other people, but for me the problem is not the basic concept of a subsidy.

The problem is that this hotel is build on a basis of dishonesty. The Chamber, knowing full and well that it wasn't true, pushed the convention center as part of maps to be a debt free enterprise. They did that knowing that they would eventually come back and say that this debt free center is worthless unless we go into huge debt to complete it via a hotel.

To me that is a more reasonable thing to be critical of, much more so than the incentives themselves, which are standard for such a development and in fact much more favorable than in many markets. Incentives which also will pay long-term dividends for taxpayers, seriously. Since I wasn't a part of the planning, I can't say for a certainty how it all happened. But I do get the aggravation based on those assumptions you outline, if they were true.

The only point I'm trying to make - repeatedly - is that the incentives unlock a different type of development that would not happen otherwise, and that they enable the CC to compete at a much greater level - one that actually transforms it from an expensive amenity to an economic development generator for the city. This is purposeful economic development, and I don't think City officials are getting enough credit for that, while people are instead spending time assuming a level of nefariousness that I do not believe exists.

Urbanized, as a fan of incentives to get deals done that are otherwise not feasible, are you okay with Omni dictating that we can't incentivize other hotels anywhere downtown for decades?

The two things that irk me most are 1) the prohibition of incentives for other projects and 2) the lack of any residential component for this amount of subsidy.

Can't agree more on #1. While I realize it isn't my decision, and those who DO make the decision wouldn't listen to me if their lives depended on it, I would stand firm on this. Tell Omni we're going to basically build your dang hotel for you, but if someone wants to build one next door (which I think is true, last I checked) or if someone wants to convert Spaghetti Warehouse, or any other possible scenario we can (or can't) think of, we're not going to stop them. You'll be THE convention center hotel, don't worry about that, but you'll only be one of many hotels in the area. Deal with it or buzz off.

For clarification, the deal doesn't stop other hotels from getting built, it just stops the city from incentivizing them. Which I realize may stop some from getting built, but you know what I mean.

For clarification, the deal doesn't stop other hotels from getting built, it just stops the city from incentivizing them. Which I realize may stop some from getting built, but you know what I mean.

Which is still horse****.

^^^^^^
Yes, it is very standard, for reasons I have outlined many times in this thread, not that anyone has bothered to actually read and digest them since their minds are already made up.

I've been reading your posts and others on this thread to better understand this issue. As I've stated before, I've learned a tremendous amount from you, Pete, and others from posting here. Please keep posting. It really furthers the conversation... even if you can't see it.

OKC keeps an eye on Dallas whenever we undertake related projects. Dallas' new downtown Omni Hotel is owned by the City of Dallas:

http://static.wixstatic.com/media/8078e2_9ae91b3d58797d1c759adce6b2b0ea2b.jpg_srz_36 5_243_85_22_0.50_1.20_0.00_jpg_srz
Omni Dallas Hotel is a 23-story, 1001-room hotel at the downtown Convention Center District. The original cost of the hotel was estimated at $500 million.

Dallas is carrying a $659 million in debt on the convention center hotel which used close to $400 million in taxable Build America Bonds the city used to finance the hotel in 2009.


https://cdn2.newsok.biz/cache/r960-1d6a6ecab396fdc874bf1486cb129213.jpg
OKC proposed convention center - 200,000-square-foot exhibit hall, 45,000-square-foot meeting space, 30,000-square-foot ballroom.

http://www.okctalk.com/images/pete/cchotelwiki1.jpg http://www.okctalk.com/images/pete/fairfieldwiki1.jpg
Oklahoma City 600 room, 19 story Omni Convention Center Hotel and a proposed 133 room, 5 story Fairfield Inn & Suites Marriott.

Majority of our costs will be funded by the MAPS III initiative which did not include provisions for parking or hotel subsidies. A 600 room Omni & a 133 room proposed Fairfield Inn would increase the total room count to 733 closer to the proposed hotel study. Earlier studies indicated that OKC could handle a 735 room convention center hotel. Both hotels & the convention center will share the 1,365 proposed parking (865-space parking garage, and a 500-space parking lot).

OKC faces a potential $150 million in hotel subsidies--includes $27 million subsidy for a new parking garage.

Urbanized, as a fan of incentives to get deals done that are otherwise not feasible, are you okay with Omni dictating that we can't incentivize other hotels anywhere downtown for decades?

For clarification I'm not a fan of incentives; I just get that in some cases it is very reasonable to involve them to achieve a specific goal. I AM a fan of new money in the economy, new sales taxes to the general fund that benefit all of us, plus job growth, and I believe this project provides those things in a more direct manner than perhaps any in the history of MAPS. I think the litmus test for incentives should be (1) is the benefit to the community of equal or greater value than the incentive, and (2) would the market do this thing anyway, without incentive? In this case I think the answers are (1) YES, (2) DEFINITELY NOT. It's a lot easier for people to understand/care about First National, because they get the intrinsic value, but most people don't get/care about the existing and potential impact of the convention/tourism business. It's more or less invisible to them.

To directly answer your question, I will pose one myself: how many hotels to date have required TIF or other incentive? The Renaissance (pre-TIF) did, because it was a huge risk at the time. The Skirvin did, because, well, duh. And I think 21c got some, and hope we all can agree that was money well spent. Has any other hotel received any? Is it needed? This goes to that "but for" standard I previously mentioned. If hotels are building at a crazy pace and apparently still profitable, why would any of them need incentives, unless - as in this case - we want to dictate some unprofitable terms to them? Because that is what is happening here. They are agreeing to do less profitable things, in return for incentive.

I just don't see lack of incentive for future hotels being an issue. If a hotel in the future needs incentive to be worthwhile, well then the market has spoken. In this case, we need this hotel much more than Omni needs OKC.

...OKC faces a potential $150 million in hotel subsidies--includes $27 million subsidy for a new parking garage.

This is not accurate, Laramie. For one thing, the only $150 million number I have seen is the $150 million that Omni has agreed to spend. That is being missed, Omni is on the hook for a $150 million investment (more than any other hotel developer has ever spent here, by A LOT), millions in rent payable to OKC, and profit-sharing payments (to the City) for decades. Also, they agree to block rooms at far below market rate, which no other hotel will do.

Also, regarding the hotel, Omni will not be the major user. The parking garage will be a public garage, and it's anticipated that the park, the Convention Center and the Arena will more heavily drive use than will Omni. Also, Omni will actually be PAYING the City for the spaces it uses. All of this is pretty thoroughly detailed in Steve's story from Saturday, which I would encourage people to read: http://newsok.com/article/5556353

^

You have to count that $10 million for the garage against the hotel because 1) the city has to come out of pocket for at least that amount in order to get it financed; and 2) there will be plenty of surface parking to serve the convention center in the near term.

The only reason they are rushing to build a garage at that location and immediately is as a condition to get Omni.

Also, the land for the garage must be purchased and that site made ready for construction, two undetermined and likely sizable costs.

From that article ( http://newsok.com/article/5556353 ), here is what Omni is agreeing to:


They are bringing $150 million of their own money (one of the largest private investments in our city's history)
They are bringing their own financing (relieving the City of risk going forward, which means we won't be in a bad deal like Baltimore's, which is oft-cited by CC opponents)
They will assume all responsibility/risk for running/operating (see above)
Pay $200,000/yr in rent for 25 years ($5 million)
Agree to minimum sales tax revenue to city of $1.4 million/yr (with no maximum) for 30 years (a minimum of $42 million)
After fifth year of operation, for 25 years hotel would pay 10% of any net profit over $20 million, capped at $15 million (so maybe nothing, maybe $15 million)

So, even without factoring the economic development aspects associated with new business, the City stands to have a very substantial portion of incentives repaid.

^

You have to count that $10 million for the garage against the hotel because 1) the city has to come out of pocket for at least that amount in order to get it financed; and 2) there will be plenty of surface parking to serve the convention center in the near term.

The only reason they are rushing to build a garage at that location and immediately is as a condition to get Omni.

Also, the land for the garage must be purchased and that site made ready for construction, two undetermined and likely sizable costs.
Pete, I get what you are saying but I don't believe it is fully honest to lay all or even most of the garage cost on the hotel. They want a garage for the park, arena and CC, and this serves all of those. Not to mention that Omni will be renting the spaces they use.

Pete, I get what you are saying but I don't believe it is fully honest to lay all or even most of the garage cost on the hotel. They want a garage for the park, arena and CC, and this serves all of those. Not to mention that Omni will be renting the spaces they use.

It is a condition of getting the Omni, plain and simple. And that will cause OKC to spend $10 million now.

Wanting it and having to come out of pocket right away are two completely different things.

And, any garage assumes the parking spots will be rented. Doesn't really matter who pays the rent.

For clarification I'm not a fan of incentives; I just get that in some cases it is very reasonable to involve them to achieve a specific goal. I AM a fan of new money in the economy, new sales taxes to the general fund that benefit all of us, plus job growth, and I believe this project provides those things in a more direct manner than perhaps any in the history of MAPS. I think the litmus test for incentives should be (1) is the benefit to the community of equal or greater value than the incentive, and (2) would the market do this thing anyway, without incentive? In this case I think the answers are (1) YES, (2) DEFINITELY NOT. It's a lot easier for people to understand/care about First National, because they get the intrinsic value, but most people don't get/care about the existing and potential impact of the convention/tourism business. It's more or less invisible to them.

Fair points, no disagreement


To directly answer your question, I will pose one myself: how many hotels to date have required TIF or other incentive? The Renaissance (pre-TIF) did, because it was a huge risk at the time. The Skirvin did, because, well, duh. And I think 21c got some, and hope we all can agree that was money well spent. Has any other hotel received any? Is it needed? This goes to that "but for" standard I previously mentioned. If hotels are building at a crazy pace and apparently still profitable, why would any of them need incentives, unless - as in this case - we want to dictate some unprofitable terms to them? Because that is what is happening here. They are agreeing to do less profitable things, in return for incentive.

I just don't see lack of incentive for future hotels being an issue. If a hotel in the future needs incentive to be worthwhile, well then the market has spoken. In this case, we need this hotel much more than Omni needs OKC.

While I agree there is no currently foreseen need for incentives for new hotels, just 1 year ago we had NO CLUE the SW building would be needing one in a year or two. It's the 20 year restriction that really gets me. Imagine what we wouldn't have if 20 years ago a hotel did this to us. SO MUCH can and will likely change for this city in 20 years, we just have no idea what may come hotel incentive demand wise. What if in 5 years West downtown is everything we hope it will be and someone finally comes around to wanting to restore the old city jail as a boutique hotel but we can't because Omni? I don't think this is a reach to imagine as a possible scenario.

Remember, a huge part of the First National project is a hotel and they are getting a ton of incentives.

You never know what the future may bring.

What if we finally got a proposal to do an amazing hotel on the canal, for example?

What about if hotels become an important part of redeveloping the Producer's Coop?

What about a hotel anchoring the Strawberry Fields development?

Remember, a huge part of the First National project is a hotel and they are getting a ton of incentives.

You never know what the future may bring.

What if we finally got a proposal to do an amazing hotel on the canal, for example?

What about if hotels become an important part of redeveloping the Producer's Coop?

What about a hotel anchoring the Strawberry Fields development?

I just used one example, but all of these are valid concerns. Take out the 20 year restriction and I have significantly fewer objections to this deal. Not that I'm entirely happy about the incentive amounts.

Remember, a huge part of the First National project is a hotel and they are getting a ton of incentives.

You never know what the future may bring.

What if we finally got a proposal to do an amazing hotel on the canal, for example?

What about if hotels become an important part of redeveloping the Producer's Coop?

What about a hotel anchoring the Strawberry Fields development?

I can't personally envision a time when development of a hotel will be as critical to the success of ANY of these elements you mention. I'm good with future hotel development being market-driven at this point, is what I'm saying. All of these places work (or should work) without hotel subsidy, and it's not like we are going to see anything equaling the First National project again in our lifetimes. The areas where a place like Producer's Cooperative might need incentives are much more likely to be in the areas of infrastructure and/or residential construction. Does anyone seriously believe the canal, Producer's or Strawberry Fields lives or dies with/without a new, subsidized hotel? I don't, for a second.

I'm more concerned about the moratorium on hotel construction in the redeveloped Cox site, but even then there is a vehicle (Omni first right of refusal).

Does anyone seriously believe the canal, Producer's or Strawberry Fields lives or dies with/without a new, subsidized hotel? I don't, for a second.

Yet, that's your exact argument for the convention center.

And with subsidies both in dollar amounts and percentage that will absolutely dwarf anything before or after.

By the way, any math when weighing the convention center and CC hotel deals should also include unlocking the Cox Center site for potential new development, which would surely be in the many hundreds of millions. If the City simply sold that site for market rate it would go a long way toward negating public subsidy of the CC hotel.

I also am concerned about the moratorium on the Cox site, but was hoping more for mixed use there.

Yet, that's your exact argument for the convention center.

And with subsidies both in dollar amounts and percentage that will absolutely dwarf anything before or after.

Pete, it is because the convention business (and success of the CC) lives and dies with attached HQ hotel like nothing else that you or anyone else can bring up. Believe me, I get the irony, but it is also ironic that you - an avowed and fundamental incentives critic - are using a PRO-incentive argument connected to future projects.

By the way, any math when weighing the convention center and CC hotel deals should also include unlocking the Cox Center site for potential new development, which would surely be in the many hundreds of millions. If the City simply sold that site for market rate it would go a long way toward negating public subsidy of the CC hotel.

The Cox site will become available completely independent of whatever happens with a convention hotel, even if we don't get one at all.

By the way, any math when weighing the convention center and CC hotel deals should also include unlocking the Cox Center site for potential new development, which would surely be in the many hundreds of millions. If the City simply sold that site for market rate it would go a long way toward negating public subsidy of the CC hotel.

Also a great point. I would almost rather see the site handed over to OCURA for an open RFP process, but we would still probably recover costs with that site... so long as they didn't also seek incentives...

The Cox site will become available completely independent of whatever happens with a convention hotel, even if we don't get one at all.
Yes, thanks to a convention center that succeeds or fails based on the hotel. You are picking and choosing here.