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Another hotel and convention center?


A petition has been filed to halt funding for a new hotel and convention center in downtown Oklahoma City, which would cost an estimated $250 million in MAPS 3 funding.

Tim Farley January 2nd, 2014

A citizens group led by Oklahoma City’s Ward 2 Councilman Ed Shadid plans to ask voters to prevent the construction of the MAPS 3 downtown convention center.

Shadid claims city and Greater Oklahoma City Chamber of Commerce officials were not honest with voters before the 2009 MAPS 3 election, particularly with the convention center project and a related convention center hotel. The convention center could cost taxpayers an estimated $250 million, but the hotel would not receive MAPS 3 funding.

Voters approved the extension of the MAPS 3 one-cent sales tax in 2009, but not specific projects.

The citizens group intended to file two initiative petitions Thursday with City Clerk Frances Kersey. Once filed, Shadid and supporters have 90 days to collect 6,000 signatures in order to place their proposals on a future election ballot.

The first petition would prevent MAPS 3 money from being spent on the construction of a convention center, while the second petition would shorten the amount of time a dedicated penny sales tax is collected for MAPS projects. Under the proposal, collection of the tax would end July 1, 2015 instead of the planned January 1, 2018.

Collections of the tax during those 30 months would equal the $250 million cost of the convention center.

City and chamber officials did not talk publicly about a convention center hotel prior to the December 2009 election. Only recently did city officials publicly admit that a convention center hotel likely would require a substantial taxpayer subsidy, if not complete ownership by the city. The subsidy could reach as high as $200 million, city council members have been told, and likely would need to be collateralized with the city’s general fund.

That type of financial arrangement would place the city and its general fund in a risky position, said Shadid, who is seeking the mayor’s post in the March 4 election.

However, incumbent Mayor Mick Cornett said in a recent television interview that no decisions have been made about a hotel subsidy.

“The case hasn’t been proven that we need to spend any public dollars yet,” he said.

Shadid counters that failure to disclose the link between the hotel and convention center before the 2009 election misled voters about the total cost of the MAPS 3 program.

 “What does society do when elected officials charged with debating and discussing issues for the best interests of the public are derelict in their duty to adequately question high-risk investments in a transparent manner?” Shadid asked.

The convention center’s cost, $250 million, is nearly a third of the entire $777 million MAPS 3 budget.

Public protector
Protecting the public from bad decisions at the council level is the primary reason behind the petitions, Shadid said.

“We haven’t crossed the line of no return. It’s imperative to check in with the people so they understand the complexity and risk of this project before reaching the point of no return,” the councilman said. “If the people turn this (the initiative petitions) down, they have to realize they’re signing off on a $200 million hotel and probably another $50 million in parking that they were never told about.”

The convention center project is in the early stages, and no land has been purchased for the building.

“What I’m hoping is those who have withheld information from the public or misled the public will understand there is a consequence to that behavior and that power can be dispersed from the council to the people,” Shadid said. “This (the petitions) will create a much more informed populous.”

Since the original MAPS plan was approved in 1993, city officials have touted the fact that all projects built in the last 20 years are debt-free because of the pay-as-you-go plan.

“But now, we’re being forced to borrow $200 million along with interest to build a convention center hotel,” Shadid said. “You’re risking everything, and nobody seems to understand the risk we’re talking about.”

City Manager Jim Couch declined to comment on the petitions or their potential impact on the MAPS brand.

Triple play
Before the 2009 election, Mayor Mick Cornett said a new convention center would dramatically increase the number of conventions coming to the city.

“The opportunities we have with the convention center would allow us to triple the business we currently get from convention business,” Cornett said in a 2009 speech.

However, tripling current business is contingent on the construction of the $200 million hotel with 285,000 square feet of meeting and convention space, according to a 2009 study conducted by consulting firm Conventions, Sports & Leisure International (CSL). The OKC chamber requested the study but has never publicly released the entire document.

“No city in America has been able to triple or even double the economic impact with a new convention center complex,” Shadid said. “Plus, they never say how they will triple the economic impact.”

According to the CSL study, construction of the hotel and convention center would increase convention revenue from $16.7 million to $45.6 million.

Inferior facilities
OKC has convention space that is inadequate to draw major events, according to Mike Carrier, president of the OKC Convention and Visitor Bureau.

While acknowledging that OKC’s current convention facilities are not booked to capacity, Carrier said it’s because convention planners have better options in other cities.

“Do you want a used car or a new car with all of the new features?” he said.

Carrier also said it’s not feasible to upgrade OKC’s Cox Convention Center, which serves as the primary facility for large events and conventions.

“I think we can triple our business, but it won’t happen overnight,” he said, referring to the proposed MAPS 3 convention center.

Carrier agreed that an increase in OKC’s convention center business would depend largely on a headquarters hotel.

“Will not having a headquarters hotel keep us from being successful? No,” he said.

 
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