Omni Hotel

[Plutonic Panda]

As tall as the Chase Tower??? That's the 2nd tallest building in the city....

Yeah, and it isn't even that tall.

[Teo9969]

Yeah, and it isn't even that tall.

It's not, but this is not the project that we need to become the 2nd tallest. I understand the desire for more height, but given its location, it will actually appear favorably in the skyline from many different angles, so it's probably a bit overstated anyway.

Now the 3 lots surrounding MBG...that's where we should be hoping for the level of investment that beats out Cotter Ranch.

[G.Walker]

http://newsok.com/oklahoma-city-coun...rticle/5520036

[dankrutka]

Morsch said Omni also sees opportunities for retail and restaurant business beyond the hotel clientele, thanks to the hotel's location.

Let's hope this results in well-placed restaurants/retail that interact with the street and park. That can potentially avoid creating a dead zone when the convention center is not in use.

[Pete]

OKC to pursue Omni hotel proposal for convention center
By: Brian Brus The Journal Record September 27, 2016

OKLAHOMA CITY – By the end of the City Council’s discussion Tuesday, officials were raising the possibility of a fourth Metropolitan Area Projects tax to help pay for a hotel attached to the new MAPS 3 convention center.

Council members ultimately voted 7-2 to direct City Hall staff to open negotiations with developers of an Omni-brand hotel downtown. James Greiner and Ed Shadid voted against moving ahead with the project, questioning whether voters have been adequately informed about the process and costs.

However, Mayor Mick Cornett stressed that city officials should first work out a deal with developers before broaching the possibility of additional funds and financing.

In March last year, city officials identified four developers with the appropriate experience, approach and finances to bid on the project. The parties were told they needed to come up with designs for about 600 rooms, 50,000 square feet of ballroom and meeting space, upscale name branding and connectivity to the convention center itself.

The city received two proposals from Omni and a partnership of Marcus Hotels and Resorts and Mortenson under the Marriott brand. The latter team pitched a cost per square foot of $527 for a total development cost of $248 million while Omni landed on $413 per square foot for a total cost of $235.5 million.

City officials considered several other aspects as well, such as average revenue per room, food and beverage revenue and net operating income margins. Omni’s winning proposal concluded with the need for $85.4 million in public funding, or 36 percent of the total development cost, while Mortenson/Marcus asked for $105 million, or 42 percent of the total cost.

Tom Morsch, managing partner at Public Financial Management, said those figures compare favorably with projects in similar markets. The Kansas City Hyatt, for example, which is expected to be finished in 2019, will require $156 million in public participation, or 51 percent of the total. The Omni in Louisville, Kentucky, to be finished in 2018, will require $107 million from the public, or 47 percent of the final cost.

Cathy O’Connor, president of The Alliance for Economic Development of Oklahoma City, has led negotiation on City Hall’s behalf. She said interested parties were told parking would not be included in their proposals.

That bothered Shadid, who has repeatedly opposed the need for a city-developed hotel adjacent to the convention center. He said a proposal last week to dip into the MAPS 3 contingency fund to help pay for a related parking garage was an attempt to circumvent residents’ will. The MAPS 3 oversight committee referred that $10 million proposal to a subcommittee for further consideration before asking for council approval.

Greiner has also expressed reluctance to put taxpayer money behind a MAPS 3 convention center hotel. On Tuesday, for example, he questioned the need to build more than 400 rooms and conference rooms. Morsch said the larger space makes Oklahoma City more competitive with other cities.

“We probably want it, but I’m not sure we need it,” Greiner said.

Responding to questions about how to provide public assistance to complete the hotel, Assistant Finance Director Kenny Tsoodle told council members that it’s difficult to plan financing options at this stage without further negotiations with Omni representatives.

Depending on the company’s own preferences and resources, construction funds could be raised in several ways, including a tax increment finance district, ground lease, general obligation limited tax bonds and rental car tax.

“It’s really hard to say until we put together the final funding plan,” Tsoodle said. “We don’t know what the (financial) structure looks like. We don’t know what the coverages will look like. We don’t know if there will be city backing on a bond deal or if it stands alone.”

“This gives us a chance to go back to the people and ask them what they think,” said Councilman Pete White, who also echoed some of Shadid’s concerns. “I think the idea that it could be partially funded through an increase in the hotel/motel tax or in a citywide car rental tax would give an opportunity for the public to weigh in on this.”

Greiner said that although the Omni proposal looks much better than he had expected, he would prefer to bring the hotel to the public as a MAPS 4 election issue.

“I’m just not seeing $85 million add up,” Greiner said of the projected funding gap.

Officials said they expect to return in November with a final development agreement and funding plan for the council to weigh.

[soonerguru]

This is definitely the brand we wanted. Omni has outstanding hotels. Hopefully any design concerns are mitigated through the process and there is at least thorough investigation into the feasibility of adding some residential to the project. It would be a hit, particularly along the park.

[Pete]

Yes, I do like that it's an Omni and convention hotels are pretty much their thing.

Great brand and something we wouldn't get otherwise.

They will also be investing $150MM directly, not borrowing the money.

And the design is starting to grow on me.

[stile99]

I'm actually looking forward to it myself. I've discussed my past bad experience with Omni, which as it turns out was at a Wyndham that had recently been rebranded as an Omni. I'm convinced that this was, if not the source of the problem, a large contributor to it and look forward to experiencing a 'real' Omni.

[HangryHippo]

I typically stay in Omni hotels when I travel and have had great experiences. That being said, I'll probably now have a ****ty one. lol

[Laramie]

They will also be investing $150MM directly, not borrowing the money.

And the design is starting to grow on me.

Feel the same way as the design falls in line with the surrounding structures. The hotel has already spurred a potential $150 million for a new hotel development that could attract conventions that will help all downtown hotels.

We need to come up with the $85.4 million in subsides to cash in on this investment.

Based on the percentage that Louisville, Denver, Dallas & Nashville are contributing in subsidies (47% - 51% range), OKC is getting a very good deal at 36% of the project cost.

[Pete]

hotel is crucial next step for okc
September 28, 2016
by Cathy O'Connor via The Journal Record: September 28, 2016

On Tuesday, the Oklahoma City Council made a crucial next step in securing Oklahoma City’s status as a visitor destination by approving a resolution to enter into final negotiations with Omni Hotels & Resorts to develop Oklahoma City’s convention center hotel.

Oklahoma City’s tourism economy has grown substantially over the last 15 years. When we set out with MAPS to create a more dynamic environment for our residents, we also created an ever more attractive place to visit. The economic impact of tourism in our market now exceeds $2 billion annually.

Rendering of Omni Hotel for OKCThe new convention center – and an associated hotel – will only multiply this potential for our market. Convention delegates come to our community (many for the first time, or the first time in many years) bringing money into the market and leaving with a better impression of our community.

Convention delegates expect – and meeting planners demand – high-quality blocks of at least 500 rooms in an adjacent headquarters hotel. To block that many rooms for one group, the hotel must also have additional inventory for other guests. Current hotel space simply cannot accommodate the demand.

Building a convention center hotel will have undeniable benefits. Increased tourism strengthens our existing investments in MAPS 3 and projects throughout the community. It is estimated that for every 10,000 convention attendee visitors, Oklahoma City will see an economic boost by as much as $2 million.

In addition to the long-term benefits, construction of the convention center hotel will bring a $235 million investment to our downtown. The project is estimated to create more than 3,000 local jobs, provide more than $370 million in economic activity and provide $128 million in labor income to local residents.

Finalizing a development agreement and determining funding options for the public participation in the project are the next steps. Our goal is to deliver the high-quality, upscale convention center hotel that Oklahoma City needs while minimizing the amount of public participation necessary, and maximizing any potential return on our investment.

We have worked together to make Oklahoma City the great city it is today. The investment in this hotel will make the most of our many other investments, generate job opportunities and new revenue in our city, and provide benefits to every citizen.

[G.Walker]

I think they should add more rooms, because it will be needed. With this hotel having close proximity to the streetcar & Chesapeake Energy Arena, I can see them booking out rooms for patrons attending Thunder games, concerts, or other events held at the Peake. I believe blocking out 500 rooms for conventions & leaving only 100 for regular business will not be enough.

[soonerguru]

I think they should add more rooms, because it will be needed. With this hotel having close proximity to the streetcar & Chesapeake Energy Arena, I can see them booking out rooms for patrons attending Thunder games, concerts, or other events held at the Peake. I believe blocking out 500 rooms for conventions & leaving only 100 for regular business will not be enough.

I agree 100% with this conclusion. They should build a minimum of 650 rooms, although 700 would be better.

[Laramie]

I agree 100% with this conclusion. They should build a minimum of 650 rooms, although 700 would be better.

Agree!

600 rooms may not be adequate; this will eventually lead to overflow bookings spilling into the surrounding hotels. Once they (surrounding hotels) start to benefit; then we can look at adding another conference hotel on the convention center site like another 200 - 400 room hotel.

[Anonymous.]

I think they should add more rooms, because it will be needed. With this hotel having close proximity to the streetcar & Chesapeake Energy Arena, I can see them booking out rooms for patrons attending Thunder games, concerts, or other events held at the Peake. I believe blocking out 500 rooms for conventions & leaving only 100 for regular business will not be enough.

Yea I don't really understand how this is so difficult to understand. Anytime I am visiting another city for a specific event, I try to book the closest legit hotel as possible - especially if it is in a downtown vicinity and could allow easy walking and cab accessibility.

So basically if a huge convention that blocks 500 rooms comes in for a weekend, and there happens to be a (even local, not even regional) draw to another downtown event. There will be a measly 100 rooms?

What does the study say for potential 500 room-blocking sized conventions?

[SOONER8693]

If everything is approved in some fashion and this gets the green light, when would this project commence building?

[David]

Agree!

600 rooms may not be adequate; this will eventually lead to overflow bookings spilling into the surrounding hotels. Once they (surrounding hotels) start to benefit; then we can look at adding another conference hotel on the convention center site like another 200 - 400 room hotel.

No sizable conference or convention expects to book everyone into a single hotel, and certainly not the bigger events the city has its eyes on with the new facilities.

Reread this:

Not to mention that overbuilding would not only create a need for construction subsidy but ALSO operational subsidy. This is where convention hotels in other cities have gone wrong. Everyone is so size obsessed and height obsessed that they are missing the most critical point; the CC hotel exists primarily to make the CC successful.

There is a formula to be followed in determining room number. They need to figure out how many people an Omni would draw on a regular basis if it was not connected to a CC. The flag itself is going to draw a certain number of people. In OKC for a full service hotel of that caliber it is probably 200 or so rooms on a regular basis. So, without any contiguous CC it would probably make sense for Omni to build a 200 room hotel. Anything over that needs to be driven by conference/convention business, and will usually be sold at a below-market room rate as an incentive for meeting planners to book. So there needs to be thought given to expected number of events based on the the CC facility itself, the expected room demand from those events, etc..

There is a repeated fundamental misunderstanding on this board of the purpose of a convention headquarters hotel like this one. It is NOT there to house all of the attendees. For various reasons (loyalty programs, price, desire to simply be elsewhere, or perhaps even not spending the night if local or regional), many, MANY conference and convention attendees won't even TRY to stay at the HQ hotel. It exists largely for the people who are facilitating the conferences; boards, association officials, presenters, vendors, etc.

If you build a hotel with a bunch of extra rooms just for the "blue sky" factor - that is, community ego, height on the skyline, or hoped-for growth that doesn't match the size/type of convention center that is attached - you are going to be building rooms that make no business sense. You are going to be building rooms that not only drive up the cost of the facility, they will have to be mothballed and won't make revenue. That will drive down the profitability of the hotel and put the city on track for ongoing OPERATIONAL subsidy. Those rooms still have to be maintained. They still have to be heated/cooled. They still have to be cleaned occasionally, even if not being used. They require more staff. They require more resources.

For all of the criticism on here regarding public subsidy in general, and of this project in particular, it amazes me that so many people are so bummed that the same building isn't bigger, taller, whatever. MUCH better for decisions regarding this hotel be based on sound business principles. Building it larger than required does nothing to help the CC's viability, and is actually HARMFUL to the viability of the hotel itself. If/when the CC itself requires expansion, there is a plan in place for more CC hotel rooms. That is wise and prudent, which is honestly what we should all be seeking here.

[Pete]

[Plutonic Panda]

I think they should add more rooms, because it will be needed. With this hotel having close proximity to the streetcar & Chesapeake Energy Arena, I can see them booking out rooms for patrons attending Thunder games, concerts, or other events held at the Peake. I believe blocking out 500 rooms for conventions & leaving only 100 for regular business will not be enough.

Completely agree. Very small room count. Would be nicer to see it taller, yes community ego or whatever you want to call it, but I would like to see it taller. But more rooms would be much welcomed. Hopefully by the time there are shovels on the ground, we will see a higher room count and maybe more floors.

[Urbanized]

Urbanized, you need to write a book or something. You have so much knowledge and information on this type of stuff. Great post.

Appreciate the kind words. I don't know 100% of the industry info, but I've been around it for many years and as a result I've been fortunate enough to be around lots of people who DO know all about it.

[hoya]

Feel the same way as the design falls in line with the surrounding structures. The hotel has already spurred a potential $150 million for a new hotel development that could attract conventions that will help all downtown hotels.

We need to come up with the $85.4 million in subsides to cash in on this investment.

Based on the percentage that Louisville, Denver, Dallas & Nashville are contributing in subsidies (47% - 51% range), OKC is getting a very good deal at 36% of the project cost.

In my mind, that's what the economic side of MAPS should be. I'm all for the quality of life improvements like the ballpark and hiking trails. But when we're doing something for purely economic reasons, we should aim to get the biggest bang for our buck. The Chesapeake Arena was a steal for the amount we paid to build it. We should be looking to get the best return on investment that we can.

[Urbanized]

^^^^^^^^^^
This is another reason why OKC puts such a high priority on convention and fairgrounds business. As an individual it is tempting to say "but what about me..?" - despite the fact that many/most of the MAPS projects HAVE added quality of life benefits for the average citizen - but as Cathy points out in the opinion piece above, projects like these generate direct income for the City, which has a sales tax based economy. So the things that WE want - infrastructure, streets, public safety - are much easier to pull off when people from outside the city are helping us pay for it. They are coming here and dumping their money into our economy, adding jobs, paying sales tax...and then LEAVING.

Not to mention, when industry leaders and investors travel here for business, conferences, etc., it puts them front and center in a city experiencing a pretty remarkable renaissance. Otherwise, they would not be here. Those people are the ones who make decisions on relocations, expansions, investment. And we need for them to come here and EXPERIENCE OUR CITY.

The impact is honestly pretty difficult to quantify. I know it's easy to criticize some blue-sky Chamber or consultant projections, but honestly I think the economic return on whatever we are spending for this hotel - and the connected convention center, is going to pretty dramatically eclipse our investment. Call me a booster I suppose, but it is something I DO believe.

[LuccaBrasi]

^^^^^

Well said as usual, 100% agree.

Interesting read about TRT Holdings, which is the private holding company that owns Omni: http://www.dallasnews.com/business/b...hotel-purchase

[Pete]

And to add to everything Urbanized has said, this particular type of full-service hotel will offer things like restaurants, bars and meeting rooms that the locals can enjoy too, particularly in this case because of it's relation to the park.

I would be much more conflicted about all this public money if this hotel was being built on the REHCO land (which is going to get something great anyway) and not in Core to Shore, where as it is, this project should really help the park and be a catalyst for private development. Feel the same way about the cc in general.

I'm pretty pleased how this has all turned out, bumps and twists aside.

[Paseofreak]

Anyone care to reconcile the recommendation from the consultant for 750 rooms to the 600 we're being offered? It would seem that if there is an industry standard equation to derive number of rooms from anticipated attendance (based on size of the convention facility, I presume), the offering would be much closer to the recommendation.