Salt Lake City megahotel proposal clears House committee
By Mike Gorrell
The Salt Lake TribuneFirst published Feb 18 2014 07:27PM
A bill to help finance a convention center-headquarters hotel in downtown Salt Lake City sailed through a House committee Wednesday.
The House Economic Development and Workforce Services Committee voted unanimously to advance the bill to the full House.
The lack of dissent was noteworthy.
Three of the committee members voting for the bill Tuesday had last year opposed the measure, which again seeks state participation with Salt Lake City and Salt Lake County in providing a tax incentive that could entice a private-sector developer to build an 800- to 1,000-room megahotel adjacent to the Calvin L. Rampton Salt Palace Convention Center.
Last year’s bill, which had passed the Senate, failed by three votes in the House on the session’s final night.
This year’s revised measure, HB356, includes a provision designed to ensure the whole state, and not just Salt Lake County, benefits from public-sector aid for the project.
Sponsored by Rep. Brad Wilson, R-Kaysville, the bill includes a provision that dedicates a portion of the state’s investment to the production of materials promoting Utah’s many assets, beyond and including its five national parks and 14 ski areas. These materials will be distributed to conventioneers coming to Salt Lake City, encouraging them to spend time before or after their meeting exploring the Beehive State.
That provision helped bring aboard House Speaker Becky Lockhart, R-Provo, last week as a bill co-sponsor and apparently appealed to committee members Tuesday.
"It’s time to step up to the plate and make this happen," said Rep. Rich Cunningham, R-South Jordan, the committee’s vice chairman. "I’m beginning to believe this makes good sense."
County Mayor Ben McAdams, who has led the charge, is convinced the megahotel will help Salt Lake City keep the lucrative twice-annual Outdoor Retailer trade shows and attract more medium and large conventions that don’t even consider the city because it lacks a headquarters’ facility.
"Right now our sales team is going to a gunfight with a knife," Visit Salt Lake chief financial officer Cliff Doner said. "If we don’t get into the game, we’re going to be pushed out of the game."
The plan is for each government to invest up to $25 million into the incentive. The money would go toward meeting space and other construction within what is projected to be a $335 million, privately financed hotel. After the hotel is running and generating sales-tax revenue, the developer can apply annually for tax credits from the incentive.
Opposition to the proposal came once again from what Rep. Bradley Last, R-Hurricane, jokingly called "The Terrifying Trio" — Utah Taxpayers Association vice president Royce Van Tassel, Utah Hotel & Lodging Association Executive Director Jordan Garn and Clint Ensign, senior vice president of the Sinclair Cos., which owns the Grand America and Little America hotels.
They reiterated their argument that the bill provides a government subsidy for a private hotel that, over the first five years of its operation, will take $105 million in revenue away from existing hotels.
"They get thrown under the bus," said Ensign, contending the legislation has "deficiencies that are fundamental that need to be resolved before this bill moves on."
With the committee vote, it is moving on. But both sides expressed a willingness to talk more about finding a way to reduce the proposal’s impact on existing hotels.
The specific location of a headquarters hotel has not been identified.
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