After a decade of discussions and debate, the City of Oklahoma City voted 7-2 Tuesday to enter an agreement with Omni Hotels to build and operate the new convention hotel downtown.
The 600-room, full-service hotel, the convention center and Scissortail Park are all a part of plans to develop the city’s blighted lower downtown district using a combination of MAPS 3 funds and other financing mechanisms.
The agreement also ends a yearslong political struggle between those who think the hotel should be built without any city money and those who believe it could not be built without city help.
The agreement calls for Omni Hotels to invest $150.1 million and the city will issue bonds (how cities borrow money) for $85.4 million. The agreement will not raise taxes.
Omni Hotels is purchasing the land from Oklahoma City Urban Renewal Authority.
The $85.4 million borrowed by the city will be paid back from 10 funding sources.
According to city staff, over half of the money will come from revenue raised from the hotel itself:
- Hotel property taxes
- Sales taxes from hotel operations
- Hotel occupancy taxes
- State matching funds from the sales and hotel occupancy taxes
Staff said the other six funding sources are tax increment finance (TIF) districts and revenue from leases and the hotel land sale:
- Omni’s payments to the Oklahoma City Urban Renewal Authority (OCURA) for the purchase of the hotel site
- The Downtown/MAPS TIF district
- The Devon World Headquarters TIF district
- The proposed new TIF district for the Core to Shore area
- The Skirvin Hilton Hotel lease
- The Bass Pro Shops lease
No public review
The issue of how a convention hotel would be funded became the center point for deep disagreements about the values of the city and how decisions are made for it.
The park and convention center itself were a part of the MAPS 3 plan and were explained in the campaign to get the public to vote for the measure in 2009.
MAPS 3 passed and has been the fuel for revitalizing the oldest part of downtown just south of the Chesapeake Arena and Myriad Gardens.
But even though Greater Oklahoma City Chamber of Commerce leaders had been floating the idea of a 500-room or bigger convention hotel downtown since 2007, the idea was not a part of the MAPS 3 plan.
After the vote, discussions about the necessity of a hotel continued with the Chamber funding a study on the matter. The actual study results have yet to be made public.
The effect was that downtown business leaders connected through the Chamber were a part of the discussion about a convention hotel, but not the wider voting public.
The issue was one point of contention in the bitter race for mayor in 2014 between the sitting mayor, Mick Cornett and Ward 2 Councilman Ed Shadid.
Shadid lost the race to the popular incumbent Cornett.
And Tuesday some of that heat came to the surface again with Shadid launching an argument against the secrecy of the process leading to the decision the council was about to make.
When it was Shadid’s turn to speak on the matter before the council vote, he challenged those who had been pushing for the decision.
He said he believed the hotel project “was decided years ago.”
He argued the recently-approved vote to extend the MAPS tax could have included the hotel project.
“We put together a $240 million-dollar sales tax package for streets next month. We could have put this $85 million on that initiative, let the people vote on it in six weeks and we could have paid for it in cash,” said Shadid.
He objected to the city borrowing money to start the project.
And the harshest accusation came next.
“We withheld this part of the story from the people because we were afraid of how they might vote,” Shadid said. “That, to me, is the greatest shortfall of this entire project.”
Shadid was not the only voice questioning the measure although the other objections came from a different viewpoint.
Ward 1 Councilman James Greiner objected to the project from a strict market approach as he has done in previous discussions about a possible hotel.
“I don’t like government infusing itself into private markets” said Greiner. “I trust the market to do what needs to be done.”
Greiner and Shadid voted against the resolution.
After the vote, Free Press talked with several who had spoken for the measure during the pre-vote comments time.
Cathy O’Connor, President of Alliance for Economic Development, is the one who presented the agreement to the council for a vote.
The agreement was a complex one that had several types of assurances that were intended to protect the city and Omni Hotels.
We asked her what was the most important point in the agreement for protecting the city.
“The key thing that protects the city is that the city will not construct, own or operate the hotel,” O’Connor said.
Arturo Delgado, vice president of the Laborers’ International Union of North America, Local 107, had spoken in favor of building the hotel because of the jobs it would create for the local economy.
“It’s not just for the workers I represent, but the workers in general,” he said.
Omni Hotels has made an informal agreement that they will use at least 60 percent local contractors to build the hotel.
Robert “Bob” Rowling, Co-founder, owner, chairman and chief executive officer of TRT Holdings, Inc. which owns Omni Hotels assured the council that Omni Hotels did not want to be just a service company on someone else’s property, but a “stake holder” in the future of Oklahoma City by building and owning the hotel.
Afterward, he told Free Press that he didn’t mind the objections that were raised while coming to the decision.
“That’s democracy,” Rowling said.
Then the Texan who got his first big money in the oil business before buying Omni Hotels showed his open-ended approach.
“I don’t feel rejected even by the ones who voted against it. No. When we build it and they see it, we’re going to make them wish they had voted yes,” he said with a smile.
The hotel will sit next door to the convention center between the Chesapeake Arena and I-40, and North Robinson and Shields Boulevard.
Scissortail Park will be across Robinson west of the convention center bounded by Reno Avenue, Walker Avenue, Robinson Avenue and SW 10th Street.