“If we are able to get a headquarter hotel, then we’ll see spillover benefits to other hotels in the area,” McAdams explained. “The development of the new properties just shows that there is energy and economic growth in that (area of downtown).”
Despite the addition of the extended-stay hotels, the development of a convention hotel would be mutually beneficial to the market segments served by each type of property.
Jason Mathis, executive director of the Downtown Alliance, also voiced support for the new project, calling it “the evolution” of that area of downtown. He added that while the new project is good for the community “from a development perspective,” the new hotels would not attract many new travelers to Salt Lake City.
“Nobody should confuse these hotels with a full-service convention hotel that will actually bring new, larger conventions and convention delegates to our community,” Mathis said. “Limited-service hotels compete on rate for existing business, whereas a large convention center hotel next to the Salt Palace will actually bring new business and ultimately raise the daily rates for every other property.”
Rep. Jacob Anderegg, R-Orem, who voted against the bill, said the new hotels likely will have a negative impact on the future of a headquarter hotel property.
“It takes away the emphasis of having a new convention center hotel built in Salt Lake County,” Anderegg said. “If you bring in new hotels, that hurts bringing in a convention center because you’re creating more supply than demand.”
The assessment of convention hotel supporters who claim, “If you build it, they will come,” he said, is overstated.
Anderegg conceded that a convention hotel could potentially be a “boon for the state,” but the proposal put forth in the Legislature gave away “too much of the bank.” Offering tax-free operation for two decades is too much for taxpayers to burden, he said.
Rep. Brian Greene, R-Pleasant Grove, who strongly opposed SB267, said he was glad to see that the new project was a private joint venture funded through conventional financing methods and not with the investment of public funds or tax incentives.
“Privately owned projects should not be the recipient of taxpayers' funds,” Greene said.
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