Convention hotel still hasn't come to downtown SLC

Whoever said, “the only thing that is constant is change” obviously had nothing to do with building a convention hotel in Salt Lake City.

I wrote my first column on the perceived need for such a thing 23 years ago. We’re still waiting for dirt to be turned, and conventions are still telling Visit Utah, the county-supported convention and visitors’ bureau, they would love to come but they don’t want their delegates spread around the city in lots of different hotels.

Without a big hotel, the Salt Palace Convention Center, built about the time I wrote that first column, could be likened to a racecar that is confined to residential streets where the speed limit is 25 mph.

But the holdup is not what you think. 

Two years ago this month, Salt Lake County selected DDRM to be the developer — this after the winner of an earlier bidding process, Omni Hotels, pulled out because its demands for more of a taxpayer subsidy were refused.

That led to the usual posturing over whether a convention hotel is unique and important enough to the economic health of a community for government to give it a leg up over other hotels.

If the private market really was demanding a hotel, the conservative counterargument wents, a developer already would have built one. Government should not be picking winners and losers.

But the hang up today is not the lack of a public subsidy. Sources tell me the developer has assembled a deal that makes the hotel viable with mostly private money. The state has approved a $75 million subsidy, mostly to cover the cost of building meeting rooms directly tied to conventions. But the developer can access that money only after the project can prove it has fulfilled promises to add to the local economy.

The subsidy isn’t an issue. The remaining challenges lie elsewhere, I’m told.

That’s an encouraging bit of news, as is the persistent optimism of those associated with the project that it can be made to happen, no matter how long it might take.

“I think it’s inevitable that we will, in this market, have a convention hotel,” Scott Beck, president of Visit Utah, told me.

He certainly hopes so. The city loses about 25 to 30 conventions a year because it doesn’t have one.

Meanwhile, the cities Salt Lake competes with for convention business have such hotels, and virtually all of them were built with lots of taxpayer money. Beck said some conventions that come here need 20 or more hotels. For an event planner, that means 20 or more separate contracts with separate cancelation policies, etc.

And that doesn’t begin to tell the story of the transportation challenges.

This isn’t a problem unique to Salt Lake City. Lots of cities are struggling over whether to build, or encourage construction of, new convention hotels. Two years ago, The Indianapolis Business Journal said officials there were anguishing over the loss of more than 1,000 hotels rooms over the previous five years. That had pushed the city’s occupancy rate to more than 69 percent.

Salt Lake County’s rate already tops 70 percent.

Back in 1995, the county commissioned a study by Economics Research Associates that concluded a hotel could be built without much of a public subsidy, provided the county was willing to use its power to condemn property.

Utahns, thankfully, don’t like the idea of taking private property by force. As luck would have it, that study was published just after the state Supreme Court ruled against Salt Lake County for the way it had condemned private property in the Union Fort area to make way for a large retail project.

I have been a persistent critic of the push to subsidize construction of a convention hotel. The way the state has structured its limited subsidies in this case, however, should not offend any philosophical sensibilities.
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But I have never argued against the need for a hotel to boost a convention industry that adds life, and money, to the downtown area. If DDRM or any other developer can make it happen without any more public involvement, we should cheer them on and hope I’m not still writing about it 20 years from now.