Omni Hotel

[Urbanized]

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.

Thanks Dan. I appreciate that you are always open-minded in my experience. All I'm asking is that people consider all aspects in an intellectually honest way, which I know you do.

I know it (CC + hotel) is a complex issue, and one that can be difficult to really get excited about. It's expensive, it doesn't have all of the sizzle of many previous MAPS projects, and doesn't SEEM to address a societal need at first glance. I would just encourage people to keep in mind that if this project (CC + hotel) is successful it will directly drive more jobs and sales tax revenue than any other MAPS project. That DOES benefit the public, greatly in fact. The relationship of an HQ hotel to a CC is a unique and critical one.

I also believe the structure of the hotel incentives is WAY more favorable for OKC than what many (larger) cities have achieved, and other than the initial outlay there is very little risk going forward, which is quite the opposite of some of the CC horror stories you can pull up easily with Google. I think the City has done a very good job with this negotiation, in fact.

[2Lanez]

Yes, thanks to a convention center that succeeds or fails based on the hotel.

This isn't fact, nor is "succeeds" or "fails" so black and white.

[jerrywall]

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.

Seconded. I have almost 2 decades of experience in running conventions and special events. Won't even consider a venue without an attached hotel, and preferably a nice one (although for smaller events we are willing to be more flexible on quality).

In fact, I pulled my last convention from OKC because we couldn't get enough rooms at the attached hotel (or the hotel right across the street.)

[bchris02]

Seconded. I have almost 2 decades of experience in running conventions and special events. Won't even consider a venue without an attached hotel, and preferably a nice one (although for smaller events we are willing to be more flexible on quality).

In fact, I pulled my last convention from OKC because we couldn't get enough rooms at the attached hotel (or the hotel right across the street.)

I agree with this. The hotel should be attached to the convention center or be across the street. Not doing so will negatively impact the success of the convention center. Incentives are always controversial but we need to look at what the city gains out of this deal as well as what Omni has already committed to invest. This is a win for OKC.

[Urbanized]

This isn't fact, nor is "succeeds" or "fails" so black and white.

Success: significantly increased bookings, rental income to offset CC operational expense, increased room tax revenue (city-wide), increased sales tax revenue (benefits general fund), increased secondary sales tax revenue from retail and restaurants in OKC, new money in the economy in the hands of local businesses and local workers, both downtown and city-wide.

Failure: construction of expensive new facility that doesn't gain appreciable new bookings due to inability to block rooms (industry standard, and look no further than jerrywall's post above for evidence), possible long-term operational subsidy for convention center.

Yeah, it really is sorta black and white.

[hoya]

I have zero experience running conventions or booking hotels, or anything like that. I have zero expertise in this matter. But the deal doesn't seem too bad to me. As I understand it, if the convention hotel is a roaring success, the city will probably recoup all or most of the incentive money they spent through the profit sharing agreement. If that's the case, we get a 600 room Omni in the city, and all we have to do is take out a loan for a while and then not actively provide financial assistance to their competitors. Sounds like a great deal.

If things fall apart and the Omni does poorly, well then we wasted a lot of money. That's always a possibility.

Realistically, it's probably somewhere in the middle. The hotel will probably be successful, and we'll get some money out of it, but not enough to cover all of our costs. So we'll end up spending somewhere between $0 and $130M depending on how well it does. I don't have too much of a problem with the "no compete" clause, It's for 20 years, right? We're going to get First National and the Omni, and that's a lot of public money going towards hotels. While there's always the possibility that we miss out on a new opportunity because of some old agreement, I don't know that I'm anxious to give a lot of public incentives after we've helped finance two mega-expensive hotel projects.

[Urbanized]

Seconded. I have almost 2 decades of experience in running conventions and special events. Won't even consider a venue without an attached hotel, and preferably a nice one (although for smaller events we are willing to be more flexible on quality).

In fact, I pulled my last convention from OKC because we couldn't get enough rooms at the attached hotel (or the hotel right across the street.)

Believe me or don't believe me (though I have 15 years of participating in CVB conference/convention pitches and have had many, many conversations with CVB staff about what works and what doesn't for landing bookings), but at the very least give consideration to jerrywall's post. He doesn't have a dog in this fight, and if anyone is going to try to make inadequate facilities work, it would be a local planner. Imagine telling an out-of-town planner we don't have discounted adjacent room blocks. It's a non-starter.

[Urbanized]

Excellent points, hoya. Thanks for chiming in.

[OKC_on_mines]

After reading valuable and profound input from you guys with expertise and direct insight into the meat and potatoes of this developing story, I must say I am convinced we do need the hotel. And since, we would owe Omani money and we would have to go back and rehire and renegotiate with a new suitor and lose tons of leverage just for the sake of time in correlation to current construction of other maps 3 projects, we surely can't afford to have Omani walk away from the table.

Urbanized, thanks for spoon feeding me details on the intricacies of the CVB aspect but also giving me an idea of the economic impact of a convention center complex as a whole. If we are already a hot commodity/ location for certain events (both local and national) and could soon exponentially expound that interest and intrigue with a huge backyard and fancy new car (scissortail park and streetcar) than its hard not to jump on the opportunity to capitalize and attract more business, potential future residents, potential tourists, jobsa new image/brand to those around the world who can now look at OKC through a completely different lens.

On the contrary, not having residential included in the development, and the control we are giving omni by tying our own hands concerning no tif for hotels downtown is a down side to me. Not to mention we didn't even convince omni to build the garage for us with the new hotel.

So I guess, I am left to choose is the public investment still worth it? I am convinced that it is....but I'm confused and disappointed that the sacrifice and the passion and effort put into this is spite of the lack thereof put into 24/7 bus service, Sunday service on the streetcar, and affordable downtown living. If we can afford to dig deep for omni, why haven't we dug deep for OKC where it also counts (not to suggest the CC and CC hotel won't help OKC , because you've convinced me it will)?

The city has proven it cares enough about this to make it work.....just wish Cathy O'Connor and others cared enough about things that everyday Joe-schmoe Oklahomans nneeded that will be working these jobs

[Paseofreak]

So I guess, I am left to choose is the public investment still worth it? I am convinced that it is....but I'm confused and disappointed that the sacrifice and the passion and effort put into this is spite of the lack thereof put into 24/7 bus service, Sunday service on the streetcar, and affordable downtown living. If we can afford to dig deep for omni, why haven't we dug deep for OKC where it also counts (not to suggest the CC and CC hotel won't help OKC , because you've convinced me it will)?

The city has proven it cares enough about this to make it work.....just wish Cathy O'Connor and others cared enough about things that everyday Joe-schmoe Oklahomans nneeded that will be working these jobs

As well. The "phased" approach to revealing the true cost by the Alliance, the Chamber and the City for this project smacks of deceit. Remember that we are in Phase 1a, which initially proposed a CC, fully paid for, with a stated budget, but then required (1b) city assets to be added to the the pot to be sited. Next, (1c) we need a parking garage to be built for Omni or any other to come onboard. Now, well after the vote to commence, we are quoted a cost of 84MM in subsidy (1d) which will actually cost north of $130MM and we have to cede future tools for redevelopment to get the deal done. But, they're not done. Apparently, Phase 1a is going to fall short and we need more space (Phase 1e) to host the events these powers that be envision. For good or bad, we've bought a Kirby vacuum cleaner on the installment plan. Not pleased at all with how this has transpired. How very "Conservative" of all of those that made this happen this way. But I guess it's OK, because those in charge are all so much better qualified to spend our money than the taxpayers.

[jdross1982]

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.

Is there an estimate on the amount of money the city could recover from the garage? Without having the data, I would say anywhere from 30-60 million over a 30 year period would be a fair estimate.

[mkjeeves]

As well. The "phased" approach to revealing the true cost by the Alliance, the Chamber and the City for this project smacks of deceit. Remember that we are in Phase 1a, which initially proposed a CC, fully paid for, with a stated budget, but then required (1b) city assets to be added to the the pot to be sited. Next, (1c) we need a parking garage to be built for Omni or any other to come onboard. Now, well after the vote to commence, we are quoted a cost of 84MM in subsidy (1d) which will actually cost north of $130MM and we have to cede future tools for redevelopment to get the deal done. But, they're not done. Apparently, Phase 1a is going to fall short and we need more space (Phase 1e) to host the events these powers that be envision. For good or bad, we've bought a Kirby vacuum cleaner on the installment plan. Not pleased at all with how this has transpired. How very "Conservative" of all of those that made this happen this way. But I guess it's OK, because those in charge are all so much better qualified to spend our money than the taxpayers.

Truth. Shame on us for giving them our trust.

[Pete]

As well. The "phased" approach to revealing the true cost by the Alliance, the Chamber and the City for this project smacks of deceit. Remember that we are in Phase 1a, which initially proposed a CC, fully paid for, with a stated budget, but then required (1b) city assets to be added to the the pot to be sited. Next, (1c) we need a parking garage to be built for Omni or any other to come onboard. Now, well after the vote to commence, we are quoted a cost of 84MM in subsidy (1d) which will actually cost north of $130MM and we have to cede future tools for redevelopment to get the deal done. But, they're not done. Apparently, Phase 1a is going to fall short and we need more space (Phase 1e) to host the events these powers that be envision. For good or bad, we've bought a Kirby vacuum cleaner on the installment plan. Not pleased at all with how this has transpired. How very "Conservative" of all of those that made this happen this way. But I guess it's OK, because those in charge are all so much better qualified to spend our money than the taxpayers.

Old saying: You get the behavior you allow and reward.

We have allowed this sort of thing for a long time and keep rewarding it.

Another reward is likely to happen today when this gets passed by the city council.

[Pete]

There will be tons of discussion in the council meeting today but expect the only votes against this to be Shadid and maybe Greiner.

[Pete]

Robert Rowling -- billionaire owner of Omni Hotels -- is at today's council meeting.

Here's an irony: Rowling is an arch-conservative and highly active in associated campaigns and causes and will stand today as one of America's richest men in front of a city and state crippled by budget problems and ask for a government handout of over $100 million.

[BoulderSooner]

Robert Rowling -- billionaire owner of Omni Hotels -- is at today's council meeting.

Here's an irony: Rowling is an arch-conservative and highly active in associated campaigns and causes and will stand today as one of America's richest men in front of a city and state crippled by budget problems and ask for a government handout of over $100 million.

In no way does our city have anything close to a "crippling budget problem"

And in most ways neither does the state. Illinois for instance is close to being bankrupt. Oklahoma is not in that situation.

And to call incentivizing a company to do something in the city's interst the company would never do for purely business reasons is a little incomplete at best and more than a little biased

[Jersey Boss]

Is there an estimate on the amount of money the city could recover from the garage? Without having the data, I would say anywhere from 30-60 million over a 30 year period would be a fair estimate.

Hard to forecast the amount that will be recovered based on the rapidly changing dynamic of car ownership in this country. It is anyone's guess what that will be like in 15 years let alone 30. Hell in in 15 years the city could even be offering Sunday mass transit as an option.

[stile99]

In no way does our city have anything close to a "crippling budget problem"

And in most ways neither does the state. Illinois for instance is close to being bankrupt. Oklahoma is not in that situation.

Oh come on, be serious. I didn't imagine the article I just read about teachers leaving for Kansas now, as well as Texas.

http://www.newson6.com/story/3590514...for-higher-pay

As far as being bankrupt, I can't even keep track of the 100 million, no 200 million, no 300 million, no 600 million, no 900 million dollar budget hole any more. It's worse than that sinkhole in Florida, at least that stopped growing.

[Urbanized]

..Urbanized, thanks for spoon feeding me details on the intricacies of the CVB aspect but also giving me an idea of the economic impact of a convention center complex as a whole...

You're welcome; thanks for reading with an open mind. Unfortunately that part of the story is really not being told by anybody. The cynic might say that's because they really don't need to tell the story publicly to have the votes to pass this, but I know people who read/post here are curious and hungry for information. Also, if I can help anyone here feel better about a project that is admittedly expensive and lacking typical MAPS sizzle, I'd like to help out.

[Pete]

In no way does our city have anything close to a "crippling budget problem"

And in most ways neither does the state. Illinois for instance is close to being bankrupt. Oklahoma is not in that situation.

Strongly disagree.

Closing schools, cutting important services, not able to even agree to harsh budget cuts which resulted in extra lawmaking sessions. That's completely crippling.

I can't even get info I need as a report due to drastic cutbacks in the city.

Bankruptcy is far from the only measure in these matters.

[BoulderSooner]

Oh come on, be serious. I didn't imagine the article I just read about teachers leaving for Kansas now, as well as Texas.

http://www.newson6.com/story/3590514...for-higher-pay

As far as being bankrupt, I can't even keep track of the 100 million, no 200 million, no 300 million, no 600 million, no 900 million dollar budget hole any more. It's worse than that sinkhole in Florida, at least that stopped growing.

Look at OKC's credit rating. Teacher pay is not a city issue but if you want to go their. We can. Teacher pay is a political choice that they want to keep taxes low and not raise pay. Doesn't mean there is a "crisis"

Illinois is close to bankruptcy. With junk bond Rating. Okc has the highest bond rating and oklahoma has an AA rating

[Pete]

Credit rating has absolutely nothing to do with this.

All it means is that the city has cut and cut and cut in order to make budget, and in the process stop delivering very much needed and basic services.

When you can't fund your already horrible schools and cut already bottom of the U.S. funding per pupil at rate higher than any other state... That's a crippling budget.

And when you have to schedule a vote to raise sales tax just to get an adequate number of police & fire, that's crippling.

Can't believe you are even trying to argue these points.

[jerrywall]

Additional revenues would just help the budget though, right?

Were people this up in arms about the first national rebuild and incentives?

[Bellaboo]

Way back when they almost started an 'arms race' over the arena. That one turned out pretty good.

[David]

This is a little late since the discussion has been going on for a while, but the OKC council stream is covering the discussion: https://www.youtube.com/watch?v=70y-Jo_cl8w

The presentation just finished and the open remarks have started.