Dallas Picks Omni As Headquarters Hotel Operator, Sets Cost

The city of Dallas is attempting to finalize a contract that would make Omni Hotels the operator of a publicly funded and owned hotel next to the Dallas Convention Center. The city is also racing to get the project off the ground before a public referendum in May that threatens to kill it.

An operating agreement should be voted upon by the city council this month. Moreover, the city and the hotel's developer, locally based Matthews Southwest, have set the maximum cost at $356 million.

The hotel is now envisioned to launch in 2011,with 100,000 sf of meeting space, multiple F&B outlets, and a spa. Dallas Convention & Visitors Bureau president and CEO Phillip Jones revealed to MeetingNews that it would have 1,016 rooms, a 50,000-sf ballroom, and a 30,000-sf junior ballroom.

But the anchor hotel may hinge on a citywide referendum triggered by a signature petition from the Citizens Against the Taxpayer-Owned Hotel. The group is composed largely of real estate and hotel firms, including Crow Holdings, which owns the Hilton Anatole, a convention property three miles from the Dallas Convention Center.

The group argues that the city and its taxpayers cannot afford to build the hotel amid the struggling economy and the area's already low hotel occupancy. While the city has plans to fund the hotel through the sale of revenue bonds, it is also seeking aid from the planned national economic stimulus package. Last month, Dallas mayor Tom Leppert presented to Congress the city's list of municipal projects for federal help, which included the hotel.

Opponents contend the bond option will not find legs amid the financial and economic crises, and that if the hotel falls short on revenues, the deficit will have to be made up through taxes. Anne Raymond, Crow Holdings' managing director and spokesperson for the anti-hotel group, told MN, "The financial market meltdown has put a
[stark] reality on floating the bonds."

Hotel proponents have stated that they want construction to start by April—ahead of the May referendum. Jones said the bond sale and hotel groundbreaking would occur in early to late spring.

"If they move forward without voters being able to learn about the issue, it would be unfortunate," said Raymond, though she suggested her group would explore other courses of legal action.

Jones did not appear fazed by the referendum threat. "If construction begins in April, it makes the referendum moot," he said. "The opposition is not slowing the city in any way, shape, or form."

The CVB chief has previously cited that Dallas loses $800 million annually in group business because it lacks a headquarters hotel. He told MN that planners' response to the hotel—including feedback from the CVB's customer advisory board—has been "very positive," adding that convention bookings contingent on the hotel are robust.

The hotel "is a priority to remain competitive," said Jones. "The city, mayor, and city council are committed to this."

Originally published Jan. 5, 2009