Convention center hotel sparks debate 

click to enlarge Omni-Hotel1.jpg

When Oklahoma City leaders first began discussions about replacing aging Cox Convention Center with a modern and twice-the-size event space for local, regional and national conventions, the conversation included a “headquarters hotel.”

In late 2009, Oklahoma City voters approved a sales tax initiative to fund a variety of quality of life projects, including a new convention center, through the MAPS 3 proposal.

Now, the city is investing $288 million into a facility with a 200,000-square-foot exhibit hall, a 45,000-square-foot meeting space and a 30,000-square-foot ballroom. The convention center, located in an area that stretches from SW Fourth to SW Seventh streets between S. Robinson Avenue and S. Shields Boulevard, is expected to open before the end of the decade.

Despite the linking argument that the success of a convention center relies on a convention center hotel, the two are separate projects in Oklahoma City. After years of talks about pursuing a convention center hotel, the Oklahoma City Council moved closer toward such a facility when it agreed to enter negotiations with Omni Hotels & Resorts in late September.

“The hotel makes the convention center as successful as it can possibly be,” said Cathy O’Connor, who leads the Oklahoma City Urban Renewal Authority in efforts to develop a convention center hotel. “It is a choice about economic development, economic growth, tourism and taking Oklahoma City to the next level.”

While negotiations between the city and Omni officials are just getting started, estimates from the luxury hotelier suggest a $235.5 million, 600-room convention center hotel is coming to OKC. Omni could request $85.4 million in public money toward making the hotel a reality.

With the city potentially investing millions of taxpayer dollars into a private project, it begs the question Will Oklahoma City see the return it’s after?

It’s a question mulled by Ward 2 Councilman Ed Shadid, who raised concerns and believes taxpayers weren’t fully told a subsidy would be required to attract a headquarters hotel. Shadid hosted Heywood Sanders, a professor at the University of Texas at San Antonio and a leading expert in convention centers, at a town hall event two years ago.

“As I’ve looked around the country, some things are very clear,” Sanders told Oklahoma Gazette. “The amount of convention center space measured by the amount of exhibit space has grown substantially from 2000 to 2015 — 37 percent — and its still growing. … There are a lot more cities adding new or expanding convention center space. … The end result is the convention center market is largely overbuilt.”

Sanders made similar comments during his Oklahoma City visit in 2014 and in his book Convention Center Follies, which mentions the city’s quest to build a new center. While cities have embarked on an arms race of sorts to build convention centers, Sanders said, the business isn’t there to fill the space.

Large conferences like those of The American Dental Association have slipped in attendance numbers. A 2006 conference in Las Vegas brought out 40,220 dental workers, but just over half that attended last year’s conference in the nation’s capitol, Sanders said of his research.

“The really big centers are no longer competing for big trade shows. There just aren’t that many of them,” Sanders said. “They are competing down market, and that has been a competitive market. They are competing for medium-sized shows, and that has put increased competing pressure on Oklahoma City.”

Convention construction or talks of construction are underway in Louisville, Kentucky; Kansas City, Kansas; New Orleans, Louisiana; and Charlotte, North Carolina.

Survey results from Meetings & Conventions, a magazine for event professionals, paint a brighter future for OKC’s convention center future. A majority of survey respondents reported their budgets for conventions and meetings increased from 2015 to 2016 due to large attendance. The survey also found that a hotel was the top reason for selecting a convention site.

The message of Meetings & Conventions falls in line with that of supporters of a local convention center hotel. A full-service convention center hotel with the ability to offer 400 or 500 room blocks will attract and drive business to the convention center and the hotel.

Visitors to both facilities will plug money into local restaurants, shops, attractions, transportation and more. Originally, experts suggested OKC would require a 650- to 735-room headquarters hotel, but Omni has suggested 600 rooms, O’Connor said.

Beyond the money coming from out-of-towners, O’Connor sees a convention center hotel serving residents through the restaurant offerings and meeting space for events.

“[Omni] really goes to a great deal of effort to learn about the communities they are in, and they will develop a property that is uniquely Oklahoma City,” O’Connor said. “Their restaurants in their other properties are very popular destinations. I hope we will see that, especially since it will be across from the new park and become a place where people stop in for the restaurant or the coffee shop.”

Negotiations are expected to wrap up next month with an offer presented to the council, which will have to decide how to fund a subsidy. Options include public borrowing, increasing the hotel-motel tax, initiating a rental car tax or financing through tax-increment financing, known as TIFs.

“It is going to take several of those money sources to come up with a sufficient amount of money to fund through public participation,” O’Connor said.

Print headline: Convention future, The success of a convention center is measured by its ability to generate economic benefit for the city. Will a hotel assist?

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