SALT LAKE CITY — Mayor Ben McAdams has walked away from a multi-million dollar deal for a convention center hotel, claiming the proposal from the Omni Hotel chain was too expensive for taxpayers.
After nine months of negotiations, Salt Lake County’s mayor announced on Tuesday he was abandoning the deal.
“I’m disappointed that we could not get to ‘yes’ with Omni, but it reached a point where they were asking for too much in public financing which would benefit their bottom line, at taxpayer expense,” said McAdams in a statement released by his office.
The mayor’s office said sticking points in the deal included public incentives and cash advances that Omni wanted. The hotel chain also would not agree to”room block market rate protection” for conventions within the city. The mayor’s office said that would have allowed Omni to offer above-market room rates not acceptable to convention sponsors.
The county has been in negotiations with the luxury hotel chain since 2014, after lawmakers approved money to build a convention center hotel. The county has claimed it has lost out on dozens of conventions and trade shows at the Salt Palace without a hotel to accommodate it. Major events like Salt Lake Comic Con and Outdoor Retailer’s have backed the convention center hotel, saying it is vital for their growth.
McAdams’ office said it plans to re-open the bidding process for other hotel chains. Omni was the lone bidder the last time.
In a statement, Omni Hotels said:
Omni was disappointed to receive notice today of termination of negotiations related to a new convention center hotel. Omni is appreciative of the opportunity to have worked closely with the County throughout the site selection process and during negotiations of advanced terms related to Omni’s interest in developing, owning and operating a headquarters hotel at the Calvin L. Rampton Salt Palace Convention Center.
Salt Lake County, in conjunction with the State of Utah and Salt Lake City as other Stakeholders, had put together a very compelling incentive package that drove Omni’s interest to work closely with HKS to evaluate multiple potential sites. The County showed great flexibility throughout the site selection and negotiation process. Unfortunately while both sides were very close, the final economic terms were just not suitable enough for Omni to be able to commit to the project. Beyond economic tax incentives, Omni understands and supports the need for a reasonable room block agreement, which the company has reached to the satisfaction of other municipalities for similar projects – and Omni indicated to the County it would revisit its stance on room rate control should other economic incentives have been agreed to.