Convention Center Hotel Opponents Offer List of Failed Hyatts

IF WE BUILD IT: Metro says a new Hyatt hotel will enliven the Oregon Convention Center.
By AARON MESH

Metro Council President Tom Hughes didn't need say much to convince Portland City Council to cast the key votes for his long-desired $198 million Oregon Convention Center hotel. All five commissioners had tipped their hands well before the Wednesday vote.

Yet when Hughes presented the plan at City Hall, he made a bold claim: The Hyatt-run hotel at the convention center would succeed, because Hyatts don't fail.

"We can find no example of a Hyatt failing," Hughes said. "So the question—'What if it fails?'—it would be the first example of a Hyatt failing in the United States."

It took only hours for the hotel's opponents to offer examples.

Paige Richardson, a consultant working for downtown hotelier Gordon Sondland, quickly sent WW a list of Hyatt projects in financial distress in recent years.

1. The Arcade, a downtown Cleveland shopping and dining development with a 293-room Hyatt, was sold at a sheriff's auction in 2011 after the bank foreclosed. The property's private owner defaulted on a $33.3 million mortgage.

"Even if Bank of America recoups its investment," The Cleveland Scene wrote, "investors including the city of Cleveland and Cuyahoga County are unlikely to see any cash. Property records show the county has a $2 million mortgage on the Arcade, while Cleveland lent $1 million."

2. The Hyatt Regency Jacksonville Riverfront was transferred back to its lenders in March after the owners of the 963-room hotel fell behind on a $150 million mortgage.

"Whether it's owned by the previous owners or the new owner," manager Dan King told The Florida Times-Union, "it operates under the standards of Hyatt."

3. The Hyatt Regency Chesapeake Bay, owned by the state of Maryland, dipped into its reserve fund this summer and is in danger of defaulting.

The Baltimore Sun reported in June:

Hughes' chief of staff Andy Shaw tells WW that Hughes was referring to Hyatts going bankrupt—and these cases don't qualify.

"From what we can see, these don't look like 'failed Hyatts,'" says Shaw. "It doesn't appear they were failed hotels. It appears they were failed real-estate deals."

Shaw looked at these examples this morning after he and Hughes attended the Multnomah County Commission, where the board unanimously approved the hotel plan. 

WWeek 2015

Willamette Week’s reporting has concrete impacts that change laws, force action from civic leaders, and drive compromised politicians from public office. Support WW's journalism today.