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A bill that would set up a mechanism to fund a projected $100 million public contribution to a proposed convention-center hotel in downtown Salt Lake City faces its first legislative test Tuesday.

At 4 p.m. in Room 415 at the State Capitol, the Senate Economic Development and Workforce Services Committee will consider Sen. J. Stuart Adams' proposal (SB267) to help finance the megahotel's $335 million price tag through a model used regularly by the Governor's Office of Economic Development.

In this case, that formula offers potential developers a rebate of new sales tax generated over a 20-year period by the contemplated 1,000-room hotel, which would serve as a headquarters for meetings at the Salt Palace Convention Center. Supporters contend 23 large conventions rejected Salt Lake City as a meeting site last year because the city lacked a headquarters hotel.

A recent study projected the megahotel will bring in $600 million in state and local taxes over the next 30 years.

The bill sponsored by Adams, R-Layton, would limit the state's contribution to $32.8 million, about $3.5 million a year. It specifies that the money may be used only to buy land beneath the proposed hotel and to build at least 85,000 square feet of meeting space in it. The exact location of the proposed hotel has not been determined, but the bill says it must be within 1,000 feet of the Salt Palace.

Another $67 million in public funding would come largely from Salt Lake City and Salt Lake County, whose bypassed receipts of sales tax revenue could be used for parking and infrastructure. The developer's $235 million investment would go to build rooms used by guests attending big conventions such as the Outdoor Retailer trade shows.

Downtown Alliance spokesman Nick Como said the hotel will "pull in national conventions and increase our tourism tax dollars" while protecting the county's sizable investment in the Salt Palace.

Opponents from the Utah Hotel & Lodging Association, including the Grand America, contend the government should not give aid to one hotel at the expense of existing, privately financed hotels.

They endorsed a resolution, SR1, sponsored by Sen. John Valentine, R-Orem, that "opposes the use of public resources to subsidize a hotel." It has passed a Senate committee but has not moved on the Senate's second reading calendar since Feb. 26.

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