Get ready for another fight this legislative session over whether public funding should be used to help develop a convention center hotel in downtown Salt Lake City.
Salt Lake County Mayor Ben McAdams said Monday he is going to try again this session to secure state involvement in a public-private partnership to build a megahotel with 800 to 1,000 rooms — and a projected $335 million price tag — close to the Salt Palace Convention Center.
While he announced that intention, the Utah Taxpayers Association released a study attacking the idea as an example of government "picking winners and losers in the marketplace."
The study contended McAdams’ plan, which would invest about $100 million in state, county and Salt Lake City funds into the project, would take $105 million in business away from existing hotels, such as the Grand America and Little America, three blocks south of the Salt Palace.
But McAdams, with support from the Salt Lake Chamber and Visit Salt Lake leaders, maintained the public-sector funds would not subsidize one private hotelier at the expense of others. Instead, he said it would attract new convention and tourism business that would benefit hotels around the capital city and the state.
"Our analysis shows that a rising tide lifts all boats," he said.
A year ago, a McAdams-driven bill that would have secured $33 million in state funds to go along with matching amounts from the city and county, passed the state Senate but fell three votes short of passing the House.
A former Democratic state senator, McAdams said he believes several modifications will make the legislation more palatable to the largely Republican lawmakers.
The new bill would place a cap on the level of public financing, he said, and also clarifies that this financial aid is available to a private developer only as a rebate of some sales and property taxes after the hotel is up and running.
As before, public funding would be used for large meeting rooms required for conventions at the Salt Palace. But instead of being added onto the convention center, these meeting rooms would occupy lower floors of a privately financed hotel with enough guest rooms to appeal to big conventions.
"This is something the Chamber is enthusiastic about," said Jason Mathis, the chamber’s executive vice president and executive director of Salt Lake City’s Downtown Alliance.
Utah Taxpayers Association Vice President Royce Van Tassell disputed the proponents’ notion that public funding is not a subsidy, even if it is used to build meeting space.
"The tax subsidies for the proposed convention center hotel establish a government preference for one new hotel over all existing hotels who invested in Utah without these massive subsidies," he added, citing the results of a study conducted for the Taxpayers Association by Hospitality Real Estate Counselors.
Van Tassell rejected arguments that big conventions don’t come to Utah because there is no megahotel next to the Salt Palace. Salt Lake City loses out primarily because conventions are looking for a city with warmer winter weather and also have concerns about limited nightlife and high hotel rates.
His report will be presented Tuesday to the Salt Lake County Council, whose members have displayed mixed feelings about county financial involvement in a convention-center hotel.
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