The idea of a downtown megahotel to serve as headquarters for big meetings at the Salt Palace Convention Center experienced a revival Tuesday.
On a 6-3 vote, the Salt Lake County Council decided to invest $25,000 in a study that will assess public officials' sentiment about the project and outline potential funding models for building a hotel costing roughly $300 million, with upward of 1,000 rooms.
Salt Lake City is providing matching funds for the study.
County funding appeared unlikely a week earlier, when the council was asked to set aside $835,000 to cover the costs of a series of studies. Although only $25,000 for the financial model study would be released right away, and council approval would be required to spend more money for subsequent steps, the council's GOP majority seemed on the verge of rejecting funding outright.
But Republican Councilman Max Burdick asked for another week to think about the proposal, which came back in a revised form Tuesday. Instead of setting aside $835,000, the council was asked only for the money that will be spent in 2012 $25,000. And that money would come from the county's general fund, not from transient room taxes, reducing the objections of other Salt Lake Valley hotels whose customers pay that money.
That was enough to convince Burdick that the county's massive investment in the Salt Palace warranted looking at possible financing schemes.
"I'm having a difficult time just saying no and letting this concept go away," said Burdick, noting that he has traveled frequently in his business career and understands the importance of convention-center hotels. "I'm not ready to say no, to put my head in the sand and say, 'I'm against it, I don't even want to look at it.' We need to keep the discussion alive of what the future might be for the Salt Palace."
Although more reluctant, GOP Councilman Michael Jensen also came around to support the initial outlay.
"We've put hundreds of millions of dollars into the Salt Palace. We have to make sure the investment lasts and is successful," he said, adding that he remains adamantly opposed to putting taxpayer money into a private hotel but would like the study to identify private entities that might be involved.
With Burdick and Jensen joining the four council Democrats, the $25,000 expenditure was approved despite strong objections from the remaining GOP councilmen.
"This is throwing good money after bad," said Councilman Steve DeBry.
"From homemakers in Herriman to the small businessman in Millcreek to executives in Salt Lake City, this is not something that has public support," Councilman Richard Snelgrove added. "There's no guarantee this is going to be the golden goose that solves our convention ills."
Council Chairman David Wilde said it was "pie in the sky" to believe a megahotel could be built without some public funding. "I can't feel good about the road we're heading down."
Visit Salt Lake President Scott Beck felt good about the outcome, particularly Burdick's motion requiring that county to create a committee that includes state and Salt Lake City officials, the Salt Lake Chamber, the hotel association and the Downtown Alliance in evaluating the future of Utah's convention business .
"The business community sees advantages to this as an economic-development tool," said Jason Mathis, executive director of the Downtown Alliance, "and are happy to see the process move forward in a thoughtful, deliberate way."
But Utah Taxpayers Association Vice President Royce Van Tassell called the decision a mistake, contending that if the private sector thought the project was worthwhile, it would be building it.
"This is $25,000 that could be put to much better use," he said, "whether that's putting the money into the pockets of the taxpayers of Salt Lake County or making sure that county roads are better maintained."
Rising costs delay two building projects
Rising costs have dealt setbacks to plans for new headquarters buildings for the Salt Lake Valley Health Department and the District Attorney's Office.
The Health Department had set its sights on a new main building in West Jordan, but after projected costs grew to $10 million over the initial $25 million projection, the Salt Lake County Council voted Tuesday not to proceed with buying the site at 7800 S. 1300 West.
Instead, the Health Department was instructed to look into other options discussed in a closed session of the council.
Similarly, the downtown building proposed to hold a consolidated D.A.'s staff hit a roadblock when the low bid for the energy-efficient, six-story structure came in $9.7 million above projections.
That extra expense, on top of an earlier discovery that the building would cost $10 million more than initially estimated, raised the bottom line to $50.8 million compared to $31 million when first proposed.
The council instructed real estate personnel to seek new bids and also explore the possibility of buying existing office space relatively close to the Matheson Courthouse.