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Now it's time to find out how much private-sector interest there is in building a headquarters hotel for the Salt Palace Convention Center.
Salt Lake County released a "Request for Proposal" this week seeking a development-and-design team to build, own and operate a hotel with 850 to 1,200 rooms — plus abundant meeting space — within 1,000 feet of the Salt Palace.
This consortium will have to commit to make a private capital investment of at least $200 million into the hotel. It must show that it has secured financing at least twice in the past 15 years for hotels with 500 rooms or more. And it would be wise to include as many Utah businesses in its team as possible, the RFP said.
The document also spelled out what this developer has to do to qualify for about $100 million worth of tax credits after the hotel is up and running and, it is hoped, attracting more big conventions that previously bypassed Salt Lake City because it lacked a convention headquarters hotel.
Officials from the county, Salt Lake City and the state, which are equal partners in providing that $100 million subsidy, are eager to see how many proposals are submitted by the Oct. 24 deadline.
"We think there's a great deal of interest," said County Mayor Ben McAdams, who has led the charge for the hotel. "It's tough to gauge at this point … but we hear the buzz. This is a big project."
Big enough that McAdams and his counterparts in the city and the Governor's Office of Economic Development (GOED) are maintaining a hands-off approach, avoiding conversations with potential bidders to ensure a transparent process.
"We're pointing everybody to the publicly available information on our website," McAdams said, referring to http://slco.org/mayor/issues/convention-hotel. "We're not meeting with people other than steering them to the public process. We want to make sure we have a fair process."
To stimulate interest, the RFP emphasizes that downtown Salt Lake City is a vibrant area that attracts visitors to the Utah Jazz's 19,911-seat arena, Temple Square (3 million to 5 million annually) and will be more attractive when the $116 million, 2,500-seat George S. and Dolores Doré Eccles Theatre opens on east Main Street between 100 South and 200 South.
But downtown could be much more with the desired megahotel, the RFP added.
While Salt Palace guests fill 300,00 to 345,000 rooms nightly over the course of a year, those numbers could be larger if the city had not been ruled out of 26 conventions because it didn't have a headquarters hotel. Those lost conventions cost Utah $139 million in direct visitor spending, the document said.
Applicants will have to provide information about their private financing plan, their experience and their key team members. They also must submit a plan projecting hotel operating revenues and expenses during its first decade.
Proposals will be evaluated by two teams of largely local and state officials. The developer they select will evaluate site options, test-fit a hotel on each feasible site, negotiate the costs of buying the land, secure a brand-name hotelier for the marquee and establish a timeline to get it all done.
The RFP did not express a preference for any of a half dozen potential sites around the Salt Palace. It said only that the project should be as close to the convention center as possible, must be sensitive to cultural and historical assets nearby and "minimize the impact on the Salt Palace's rooftop solar panels."
The site must accommodate parking, perhaps even more than required strictly for the megahotel. The developer should not expect any waivers from the city on demolition permits or building/impact fees, the RFP said, and must be prepared to guarantee blocks of rooms for citywide conventions — while giving Visit Salt Lake a right to cap nightly charges.
A section also describes how a small percentage of the tax-incentive package will go to two funds, one to help spread more convention-driven tourism business to other parts of the state, the second to compensate local hoteliers who could be hurt financially in the first few years of the hotel's existence.
After proposals are submitted Oct. 24, the RFP expects a short list of finalists to be released by Nov. 5. Those companies will be interviewed by Nov. 13, with developer selection set for later in November or in December.
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