Sparks Fly Over Dallas Hotel Plan

The Dallas Convention & Visitors Bureau, City Council and Mayor Tom Leppert, along with a bevy of hospitality groups, unions and local chambers of commerce, finally seemed in the clear on their collective desire to build a long-awaited anchor hotel next to the Dallas Convention Center.

Land adjacent to the center was purchased, the decision had been made to publicly fund the estimated $500 million hotel with revenue bonds and the choice on a hotel chain to run it had been whittled down to two options.

Then that old adage – “if it seems too good to be true, it probably is” – came into play.

A contingent spearheaded by Crow Holdings, a Dallas-based real estate group that owns the Hilton Anatole Hotel, which is about three miles from the center, formed a political action committee, “Citizens Against the Taxpayer-owned Hotel,” with the goal of collecting 20,000 signatures of registered Dallas voters to prompt a citywide referendum in May on amending the city charter to outlaw publicly owned hotels.

Anne Raymond, managing director of Crow Holdings and spokeswoman and director of the PAC, said the group was formed because its members were opposed to the city “trying to put the taxpayers in the hotel business.”

According to the group's Web site, “A $550 million taxpayer-owned hotel means $550 million less for local law enforcement, health care, education, roads and other essential services our neighborhoods need.”

The Anatole is not alone in opposing the CC hotel. Representatives of the Warwick Melrose Hotel, Prism Hotels & Resorts and Aimbridge Hospitality, which runs a hotel owned by the Crow family, also are part of the PAC.

Larry McAfee, general manager of the Warwick, said of the public funding of the project, “I am a firm believer that you don't compete against those you tax. Whose hotel do you think they are going to drive business to first?”

The Warwick is a few miles away from the convention center, and, McAfee added, only a handful of hotels downtown would benefit if a CC hotel that drew more citywides to Dallas was built.

Raymond said the CC hotel would most likely fail since the average hotel occupancy rate in Dallas currently hovers between 50 and 60 percent. If it is not successful, she added, the city would have to use taxpayer money to pay off the bonds. “Our view is $550 million is too risky for taxpayers,” Raymond said.

Phillip Jones, president and CEO of the Dallas CVB, said that was quite an unlikely scenario since more than 80 groups have said they will not come to Dallas without an anchor hotel. The lack of one, he added, puts the city at risk of potentially losing millions of dollars in economic impact because of the events it loses to other cities.

“It's not if you build it, they will come,” Jones said. “It's when you build it, they will come.”

He added that the group opposed to the hotel was “willing to put the city of Dallas at risk for their own gain,” pointing out that the issue had less to do with taxpayers, which he said was misleading, and more to do with a fear of competition.

“The claim that the funds (for the hotel) will impact public services is blatantly false. You can't use bond money for public services,” Jones said. “(The Hilton Anatole Hotel) is probably the No. 1 beneficiary of citywide convention attendees coming to Dallas.”

To combat misinformation, he added, a PAC in support of the CC hotel, “Build The Hotel,” was formed. “It causes us great concern, and we felt we needed to state our case,” Jones said.

The purpose of the PAC, according to a press release, is “to go after thousands of endorsements to demonstrate broad-based support for the proposed convention center hotel.”

Dallas Mayor Tom Leppert said, “The Dallas Convention Center is a $1 billion asset, an economic engine that currently generates millions every year to help relieve the burden on our taxpayers. There has been an expensive campaign of lies and misinformation aimed at this project, and we cannot let that stand.”

Dallas is currently tied with three other cities for eighth place on the Tradeshow Week 200 list for 2007 – two places lower than the year before.

Jones said that without an anchor hotel, Dallas could slip even further down in the ranking. “Shame on us if we don't make this (hotel) happen,” he added.

Clay Stevens, president of Intl. Exposition, which manages the Intl. Air-conditioning, Heating, Refrigerating Exposition, said his show has been held in Dallas six times in the past 50 years and is scheduled to be back in 2013.

AHR Expo, No. 60 on the most recent TSW 200, drew 28,170 attendees and nearly 20,00 exhibiting personnel to its 2007 show in Dallas, all of whom needed a place to stay.

With just shy of 6,500 hotel rooms available in seven downtown hotels, Stevens said, people were spread out all over the city. “We would really like to have a hotel close by in Dallas,” he added. A new 1,000-plus room hotel next to the center would make a big difference, Stevens said.

“People would be fighting to walk out of the hotel and right into the hall,” he added.

Karen Malone, vice president of meeting services for Healthcare Information & Management Systems Society, previously told TSW that the HIMSS Annual Conference & Exhibition would not return to Dallas unless an anchor hotel was built. She also said her show needed more meeting and exhibit space.

Malone said, “If they could rectify all three, we would consider coming back.”

In 2005, HIMSS had 10,000 attendees and spanned 320,000 net square feet.

Jones said that without an anchor hotel, “We are losing $2.8 billion in business a year. We are not in a position to be competitive.”

Carrie Freeman Parsons, vice chair and chief marketing officer of Dallas-based Freeman, said the recent hiccup may not have been the first time the Crow family, which owns Crow Holdings, disrupted CC hotel plans.

At one point, Parsons added, there was a piece of property near the center that was gifted by the Crow family to the city of Dallas and turned into a park. “The speculation is that the reason they gave it to the city was to block the building of the hotel,” she said. “I don't know if that's true or not, but what is true is they have always spoken against having the hotel.”

Jones said regardless of the possibility of a referendum against it, plans for the hotel are moving forward. In mid-October, he added, he expected one of the two hotel operators in contention – Marriott or Omni Hotels – to be named and ground to be broken in the spring.