PHOENIX — The Oregon Supreme Court will hear a case challenging the legality of a bond-financed hotel near the Oregon Convention Center, a project that has been tied up in legal difficulty for years.
The proposed $212 million, 600-room hotel, a partnership between Metro, the Portland-area regional government that operates the convention center, Mortenson Development, the Schlesinger Companies and Hyatt, has been the subject of dispute since a 2013 petition by a group of hotel owners spearheaded by the Provenance Hotel Group sought to refer the project to the ballot for a popular vote.
The state's top court announced this month that it will take up Michelle Rossolo v. Multnomah County Elections Division, and try to decide whether the county commissioners could legally allocate hotel taxes to debt service for the project without a popular vote by the public.
County officials have maintained that Oregon law does not allow a ballot initiative to challenge an administrative decision - only a legislative one. The Multnomah County Circuit Court sided with the convention center hotel backers and the county elections division in a decision last November, and the plaintiffs quickly appealed to the Oregon Court of Appeals. That court affirmed the lower court's decision in a July 29 opinion which will now be reviewed.
Metro has said the hotel would attract five to ten more conventions every year, boosting tourism spending and creating jobs. The plan to build the hotel had been debated for more than 20 years, and the Hyatt Corp. won the rights to it in 2012, beating out Sheraton. Metro has also said that Portland's convention center underperforms despite an estimated $516 million added to the regional economy each year, in part because conference organizers have difficulty making hotel arrangements near the facility. Besides more than $60 million in revenue bonds backed by the hotel room taxes, another $18 million in loans and grants would come from the city, state, and Metro. The remaining costs would be funded with investments from Hyatt, its development partners, and other private investments.
Until recently Metro had hoped to issue its bonds for the hotel this year, but the timetable was pushed back by the developer, said Metro spokesperson Stephanie Soden. The agency is now targeting a financial close next October with a hoped-for hotel opening date in fall 2018, Soden said.
"We're moving on the new time line, so we're good to go," said Soden.
James McDermott, an attorney at Ball Janik in Portland who argued the case against Metro at the appellate level, said following his clients' defeat in that court this that Metro probably can't issue its bonds until the litigation is decided. He has said at that time that if the Supreme Court granted review of the case, it could be up to a year until a final decision came down.
