Keep compromising on the Salt Lake convention hotel

By A. Scott Anderson

For the Deseret News

Published: Tuesday, March 4 2014 12:00 a.m. MST

While a new convention hotel is needed in Salt Lake City, it must not damage the financial viability of existing private hotels. The legislation attempts to strike a compromise that protects existing hotels while still supporting the new hotel.

Jeffrey D. Allred, Deseret News

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Salt Lake City enjoys its own niche as one of the fine cities of America. We ought to acknowledge and promote our unique qualities and character.

One important element present in every world-class city is great infrastructure. Excellent infrastructure providing public services, mobility and accommodations is necessary for a robust, job-creating economy. Visionary Utah leaders have invested in highways, public transit, a great convention center and other facilities. Visionary private entrepreneurs have also made significant investments in the hospitality industry, greatly benefitting our state.

For example, the Holding family used private funds to build Salt Lake City’s only Five Star hotel, Grand America, to provide a suitable headquarters hotel for the 2002 Olympics. We have Ruby’s Inn providing accommodations for Bryce Canyon visitors. We have the Red Cliff Lodge in Moab and Dell Loy Hansen’s Marriott Hotel in Logan. These entrepreneurs have shown great faith in our state by investing significant private dollars into our hospitality infrastructure.

One missing piece of critical infrastructure is a convention headquarters hotel. My definition of a convention hotel is one providing a large convention 700 or more rooms at prices matching what other convention cities are offering, in a package deal with the actual convention space. We’re losing convention business and are unable to bid on some large meetings for lack of a convention hotel. And some of the large trade shows we currently host, like the Outdoor Retailers, expect us to continue to improve our infrastructure to accommodate their needs.

Our regional economic competitors either have large convention hotels or are building them, giving them an advantage in attracting large conventions.

The Legislature is currently considering legislation to facilitate building a convention hotel. Across the country, most convention hotels do require some level of public involvement to ensure the hotel development is financially viable.

It’s important to note that in Utah we take a responsible approach to business incentives, granting rebates only post-performance. Rebates would be tied to new revenue generated by the hotel, using no current tax revenue. Also, public funds will be dedicated only to public meeting rooms used for conventions, and other public infrastructure, and will not subsidize sleeping rooms. In essence, the 100,000-square feet of new meeting space will be funded through new economic activity created by the hotel. This approach makes sense.

But while a new convention hotel is needed in Salt Lake City, it must not damage the financial viability of existing private hotels. The legislation being considered attempts to strike a compromise that protects existing hotels, while still supporting the new hotel. However, concerns remain because tax incentives would apply to all convention hotel business, not just to the largest conventions that can’t be accommodated in existing hotels.

Existing hotels would benefit somewhat from creation of a fund used to reimburse some losses, but the fund wouldn’t cover all losses, especially in the near term before convention and tourism visitation grows as a result of the new convention hotel.

Many people have worked very hard to find a compromise, including Clint Ensign and the hotel industry, Salt Lake County Mayor Ben McAdams, and key state legislators like Sen. Stuart Adams, Rep. Brad Wilson and Speaker Becky Lockhart. But the legislation can yet be improved to avoid damaging existing hotels.

A great city needs great facilities. We need a headquarters convention hotel. One of Utah’s great strengths is our leaders’ willingness to collaborate, compromise and find common ground. Let’s keep working on the bill, and then get to work building a great new convention hotel.

A. Scott Anderson is CEO and president of Zions Bank.

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