Done right, a convention center hotel will benefit the Utah economy

This entry was posted on Wednesday, June 27th, 2012 at 7:30 am and is filed under Downtown Alliance, Downtown Rising, Economic Development. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Editor’s note: This post was originally published as an op ed in the Deseret News, Tuesday, June 26. Photo courtesy visitsaltlake.com.

By Lane Beattie, president and CEO of the Salt Lake Chamber
and Jason Mathis, executive director of the Downtown Alliance

There are great things happening in our community.

With the opening of City Creek Center, downtown is undergoing an urban renaissance that includes dozens of unique small businesses, record setting attendance at community festivals, hundreds of new downtown residents and new corporations coming to town.

Developments like the Utah Performing Arts Center, Capitol Theatre renovation, TRAX light rail to the airport and availability of new restaurant liquor licenses, make this a good time to further develop our convention industry.  Airport accessibility, urban renewal, friendly people, affordability and a stunning natural backdrop should propel our convention business to even greater heights, paying economic dividends along the way. Conventions, and the hundreds of millions of out-of-state dollars they inject into our economy, are an integral part of our rising downtown.

There are many things the business community can do to bring more visitors to Utah. And many things we have already done. We support modernization of liquor laws that protect public safety and reinforce a welcoming and hospitable climate for tourism. We support the rebuild of the Salt Lake City International Airport and endorse the bid for another Olympic Winter Games. We actively work to enhance Utah’s reputation.

Another economic development tool available that will enhance Utah’s tourism industry is a convention center hotel. Many of our competing cities have one – Denver, Phoenix, San Antonio – and Salt Lake City should consider one as well. A large 1,000-room hotel, adjacent to the Salt Palace will generate more local and state taxes from out-of-state delegates, and bring more business to Utah restaurants, entertainment venues, transportation companies and retail stores. More citywide conventions filling the Salt Palace will ultimately also mean more guests spilling over to other hotels.

Even with the tangible economic benefits of a convention center hotel, there are legitimate questions about the public sector’s role in a project like this. Some competing destinations have used government credit or local tax dollars to finance the construction costs of a convention hotel. We do not think that is the appropriate approach for Utah.

There are several private investors who are ready to build this hotel. But before they commit hundreds of millions of dollars to a project like this, they need to understand what role, if any, the public sector will play. The Salt Lake County Council is considering hiring a consultant who would help develop a financing plan that limits public involvement. Financing major projects like this is complicated and it is helpful to have expert advice.

The Salt Lake Chamber spent nearly a year trying to understand the dynamics of a convention hotel. We convened a group of business leaders who visited convention hotels in other cities, reviewed relevant studies and met with local hoteliers. Based on this review, we support a convention center hotel so long as the financing is privately-led and other specific criteria are met. Public financial support for a convention center hotel should be devoted to a public purpose, be limited and consistent with financing used for other significant privately led projects in Salt Lake. We oppose using transient room taxes to help finance a convention center hotel.

State and local governments should also support policies that maximize promotional funds; enhance Utah’s reputation as a welcoming and hospitable state; create a lively arts, cultural and entertainment district downtown and maintain a first-rate public transit system.

We ask the Salt Lake County Council to proceed with a consulting contract to better understand financing options for a convention center hotel. This is the right time to focus on and invest in our tourism and convention industry and continue the positive momentum of a downtown on the rise.

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