Finding developer is next step in mega-hotel process
Pick a developer, then zero in on the best site for a headquarters hotel for the Salt Palace Convention Center.
Salt Lake County Mayor Ben McAdams believes that is the best approach to developing an 850- to 1,000-room convention center hotel described as crucial to attracting more big meetings and their free-spending delegates to Utah.
On Thursday, he got the Governor's Office of Economic Development board to sign off on his proposed process for drafting a "request for proposal" (RFP) to guide the much-discussed effort.
But it wasn't easy.
Three of GOED's 13 board members Josh Romney, Margaret Lasecke-Jacobs and Cliff White voted against McAdams' approach. They felt it would be better to get the best site first, then find a developer who can make that location work.
"I'm nervous we'll get ourselves in a box with this approach," said Romney, son of Republican presidential candidate and former 2002 Winter Olympics leader Mitt Romney. "It's hard to go down [this path] without the right site."
"I have the same concerns," added Jake Boyer, like Romney, a real-estate developer. He said big problems could arise "if the property owner doesn't want to do business with the developer you choose."
Romney and Boyer said they would be surprised if there are more than one or two prime hotel sites around the Salt Palace, making it more important to get the land first.
McAdams said he was confident three or four workable sites exist within 1,000 feet of the Salt Palace, the perimeter outlined in legislation passed last session that formally teamed GOED with the county and Salt Lake City to develop the hotel.
"There are six landowners who believe they have the best site," McAdams said, contending none is the "clear-cut best" and all have attributes and shortcomings. "There are multiple sites where we could be happy."
If so, the approach could work, said Boyer, who voted for the process despite his initial reservations.
Outgoing GOED Executive Director Spencer Eccles backed McAdams' position that it is best to find the developer first. Since that individual or company is bearing the biggest risk in building the projected $335 million hotel, Eccles added, the developer is "the best expert in the room" to evaluate the potential locations.
"We want to select a developer who can guide us through this process," McAdams said, noting the hotel will be privately financed and operated. Up to $100 million in incentives provided by the county, state and city will pay for land acquisition, infrastructure and 100,000 square feet of meeting space in the hotel.
With GOED's endorsement, county officials will begin drafting the RFP. That document also will be reviewed by GOED, which will have representatives on a board that scrutinizes a short list of potential developers.
GOED also will develop rules for the winning developer to apply for tax credits after the hotel is running, and for existing hotels to apply for relief from an $8.4 million mitigation fund if they can prove the convention-center hotel hurt their business.