Is convention hotel doomed to failure?

7:22 PM, Sep 18, 2013   |    comments
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Cuyahoga County will soon be getting into the hotel business, but some wonder if that is such a great idea -- given what is happening at publicly funded convention center hotels around the country.

The Investigator Tom Meyer found a number of government-owned or financed hotels aren't doing such hot business.

And one county councilman is already asking questions about why the figure of the amount of the county's surplus to pay for the hotel has changed.

The $260 million hotel project is slated to get underway in November, when the old and drab county administration building is demolished.

To help pay for the 650-room hotel that is to go up in its place, the county will use a $93 million surplus left over from the building of the new Med Mart and Convention Center.

Is the surplus $93 million or $38 million, which is the number used most recently? County councilman Dave Greenspan says he hasn't gotten a straight answer.

"The actual money available, cash on hand, is $38 million, which is different than when we were originally told that it was $93 million," Greenspan says.

He demanded answers from County Executive Ed FitzGerald, and waited a month before finally deciding to file a public records request for information.

FitzGerald says the $93 million is available -- and that Greenspan knows it.

"We're in the middle of an election season," says Fitzgerald, a Democrat who is running for governor against incumbent Gov. John Kasich.

"We all know that councilman Greenspan is a supporter of the governor."

As for the bigger issue of funding, Cuyahoga County would not be the first local government to get involved in the hotel business. In fact, there are a number of government-owned or financed hotels around the country.

But many of them have never met their developer's expectations.

"The hotels don't manage to produce the anticipated new convention business," says Heywood Sanders, a professor at the University of Texas who is highly-regarded as an urban planning expert and has studied convention center projects around the country.

"The problem is that Wall Street and the bond markets have come to recognize...that the hotels don't necessarily pay off."

The convention center hotel in St. Louis went into foreclosure. Baltimore's convention center hotel, a Hilton, has been struggling to fill its rooms and pay its debt.

The same is true of Chicago's Hyatt at McCormick Place. Business experts point to another not so promising sign -- the county is already looking for a new operator for the convention center and the med mart, only two months into operations by MMPI.

That signals, they say, the fact that the number of conventions they've booked for the next couple of years is disappointing.     But plans for the hotel are moving forward.

The county administration building is scheduled to be torn down in November, and construction is to start on the hotel in the spring. The job should then be completed in 2016.  


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