Tag Archives: Tom Hughes

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The Oregon Convention Center Hotel: paying off the unions

Ask any informed person without a vested interest in the proposed Oregon Convention Center Hotel whether they think it will be a fiasco and you’re likely to get a loud and clear, “Yep!”

But public opinion has little to do with whether the hotel will get built. The fix is in, with Metro, liberal politicians and labor unions joined at the hip.

Metro Council President Tom Hughes, the hotel’s principal cheerleader, was first elected to Metro in 2010 with the strong support of labor organizations; they continued that support in his successful 2014 race.

“I want to build a hotel,” Hughes once told union workers. “I want it to be built by union workers, and I want union workers running it.”

unite here

Portland has just three union-operated hotels, all organized by Unite Here Local 8: the Benson; the Paramount; and the Portland Hilton Hotel and Executive Tower.

The unions got their first break on the Convention Center project when Metro mandated that the hotel be built by union building trades.

Prospective developers were also told to bid the privately-owned and operated project under union-supported prevailing wage guidelines where wages are set artificially high above the market.

Metro stacked the deck in favor of the unions again when the Council required that Hyatt sign a labor peace agreement with Unite Here before Metro would begin negotiating the details of the project. Hyatt, long a non-union hotel chain, subsequently agreed to a national labor peace agreement with Unite Here.

Metro also gave unions an edge in organizing the eventual hotel workers by requiring that they use a voting process despised by employers and many workers called card check. Under card check, instead of holding a federally-supervised secret ballot election, workers get to vote under the watchful eyes of union organizers, Lucky them.

Once a majority of employees have signed cards, the union is immediately recognized.

As the AFL-CIO’s Southeastern Oregon Central Labor Council put it, the hotel workers “…will come into a workplace where their management has promised to leave any decisions to the workers without wasting money on deceiving anti-union campaigns.”

Yep, folks, the fix is in.

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A public vote on a convention center hotel: is Metro trying to pull a fast one?

A May 2013 rendering of a proposed Hyatt hotel at the Oregon Convention Center.

A May 2013 rendering of a proposed Hyatt hotel at the Oregon Convention Center.

I wrote recently about the absurdity of building a government-subsidized hotel to support the Oregon Convention Center.

Now it looks like Metro is trying to work an end-run through the Oregon Legislature to prevent voters from having a say on the project.

State law (ORS 268.310 says a district, such as Metro, can’t construct new facilities “unless the electors of the district first approve the financing of the facilities…” Senate Bill 64 would amend the law to allow the construction of new facilities to go forward if ,“The facility is acquired or constructed pursuant to an intergovernmental agreement under ORS 190.003 to 190.130.”

On Feb. 24, 2015, Metro President Tom Hughes told the Senate Committee on Finance and Revenue that the bill is no big deal. It relates “strictly to clarifying existing statutory intent regarding Metro’s authority under its home-rule charter,” he said. The bill “merely cleans up awkward word placement in the current statute that has been the basis for serial lawsuits by opponents of the Oregon Convention Center hotel whose goal is to prevent the project from moving forward,” he added.

But John DiLorenzo , a partner at the Davis Wright Tremaine law firm, took a decidedly different position on the bill. DiLorenzo represents one of a group of hotel owners and managers who have opposed taxpayer subsidies for the proposed Hyatt hotel. He told the committee the bill “is an effort to subvert the judicial process” and “would deprive voters of any opportunity to vote on financing for any new construction projects built by Metro.”

Dilorenzo expressed the view that the courts would ultimately agree that residents had a right to vote on the hotel project . “Please do not deprive the voters of their last chance to avoid what could be another government subsidized albatross,” he said.

Ignoring DiLorenzo’s concerns, the Senate Committee On Finance and Revenue reported out the bill by a 3-2 vote, with Democrats Mark Hass, Chris Edwards and Chuck Riley voting in favor and Republicans Herman Baertschiger Jr. and Brian Boquist voting against. On March 4, 2015, the Senate passed the bill by a vote of 20-10, with all the no votes coming from Republicans.

Now it’s up to the House.

If the bill is just minor housekeeping, what’s the hurry? Given the controversy over the Convention Center hotel, and the ongoing lawsuits to require a public vote, the House should stay out of the mess. If, as Hughes insists, S.B. 64 doesn’t really change the law, but just clarifies it, killing the bill should make no difference to Metro. If the bill would deprive voters of the chance to vote on the hotel, as DiLorenzo alleges, it’s an insult to the public and undeserving of passage.

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We’re waist deep in the Big Muddy: the Oregon Convention Center hotel

The 990,000 sq. ft. Crystal Palace opened at Britain’s Great Exhibition of the Works of Industry of All Nations in London’s Hyde Park in 1851.

The 990,000 sq. ft. Crystal Palace opened at Britain’s Great Exhibition of the Works of Industry of All Nations in London’s Hyde Park in 1851.

For some reason, politicians are infatuated with building stuff. They’re objectophiles, aroused by, even obsessed with, things rather than people

In Portland, politicians have fallen head over heels in love with the idea of building a Convention Center hotel. The object of their desire is a subsidized $212 million 600-room Hyatt Hotel.

But the fact is, it was a bad idea right out of the gate and it’s an even worse idea now.

On the one hand, given Portland’s vigorous emergence from the Great Recession and a skyline brimming with construction cranes, the assumption that government-mandated subsidies are critical to building a convention center hotel is outdated if Metro believes the hotel’s success is a slam dunk. On the other hand, if the growing competition in the convention market will make adding a subsidized hotel a foolish gamble, then why do it at all?

“Faced with convention centers that are routinely failing to deliver on the promises of their proponents and the forecasts of their feasibility study consultants, many cities wind up, as they say, “throwing good money after bad,” said a Brookings report. “Indeed, weak performance—an underutilized center, falling attendance, an absence of promised private investment nearby—is often the justification for further public investment. A new center is thus often followed by a subsidized or fully publicly-owned hotel…”

A May 2013 rendering of a proposed Hyatt hotel at the Oregon Convention Center.

A May 2013 rendering of a proposed Hyatt hotel at the Oregon Convention Center.

So here we are.

The Portland project would be funded with $60 million in Metro-issued revenue bonds, backed by taxes the hotel would generate, plus $18 million in grants and loans from Metro, the Portland Development Commission and the state lottery.

But there are problems with Portland’s hotel proposal, as well as with the arms race of convention center-related construction going on around the country. According to CityLab, there simply aren’t enough big conventions to justify all the convention center expansions. Since 1995, convention space in the United States has increased by 50 percent, but convention growth hasn’t kept pace. “So many were saying, ‘all you have to do is get one percent of the national market and you’ll do just fine,'” he says. “Three hundred cities bought the same logic.”

In fact, the number of conventions in the United States has fallen over the past decade, as has attendance at the largest conventions.

The optimistic predictions for the Oregon Convention Center and an associated hotel neglect to consider that lots of other cities are expanding, too.

Boston is considering a $1 billion expansion of its convention center with a massive 1,200 room $800 million hotel. A Marriott Marquis Hotel is expected to open in 2016 across from the George R. Brown Convention Center in Houston. Hotel operators Omni, Hyatt, Starwood, Peabody and Marcus have shown interest in a request issued by Oklahoma City to develop a 500- to 800-room downtown convention hotel to go with a $287 million convention center scheduled to open in 2019.

Even Des Moines, Iowa is in the game. In Feb. 2015, city and county officials approved a $101 million 10-story 330-room convention hotel project attached to the Iowa Events Center. Officials said they expected the project would draw many more national events to Des Moines and add considerable revenue to the property tax base.

And the list goes on and on.

But not to worry. Portland has advantages because it’s a happening city – food, culture, livability, young professionals – enthused the Oregon Convention Center’s ebullient 2013-2014 Annual Report. That year, the Center hosted 343 events attended by 549,762 people, many of them first time visitors to Portland, the report proclaimed.

But dig deeper into the dry numbers at the end of the report and you’ll find a less glowing story.

The number of events at the Oregon Convention Center actually shrank from 469 in FY2011 to 392 in FY2012, 377 in FY2013 and 343 in FY2014. Meanwhile, net operating results showed losses growing from $10 million in FY2011 to $11.6 million in FY2014.

Despite these numbers, and continuing controversy over the planned subsidized hotel, Metro president Tom Hughes calls critics “short-sighted and selfish” for wanting a public vote on the hotel project.

The hotel plan “promises generous returns for many years to come,” Hughes has said.

So we slog along.

Waist deep! Neck deep! Soon even a

Tall man’ll be over his head, we’re

Waist deep in the Big Muddy!