If we build it, will they come?

Author:Rundles, Jeff
Position:Jrundles@cobizmag.com - Hotel, development, Denver, Colorado - Brief Article
 
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I HAVE BEEN IMPRESSED MANY TIMES OVER THE LAST couple of years by the actions of Mayor Wellington Webb when it comes to the city dealing with business people.

The Winter Park deal, for instance, was sheer brilliance. It maintained city ownership of the resort, but allowed a private developer to commit millions to developing it.

Webb's latest maneuver was to cancel a long-time-pending deal with developer Bruce Berger that would have thrown $55.3 million in city money into a $285 million plan to build a convention-center-headquarters hotel downtown.

On first blush, you have to love the Mayor's moxie.

Berger couldn't give the city a firm date as to when it could open a viable 1,100-room hotel, and Webb wanted a date. After all, negotiations have been going on for nearly four years, the convention center expansion was planned to break ground at the end of April, and we need to get a move on, the Mayor is saying. Now, Webb is going to appoint a committee to recommend how the city itself can pay for a hotel.

On reflection, however, I see something much more ominous going on here than a squabble between the city and a developer.

Berger can't give the city a firm date because, he says, he can't get any firm commitments for financing from banks and other lending institutions in the wake of Sept. 11.

Everyone seems to be playing some 9-11 card these days, especially involving business transactions that have even the slightest negative impact. But I doubt 9-11 has anything to do with the hotel deal in Denver.

I suspect the lenders -- even with a substantial government subsidy -- don't view a convention-center hotel in Denver a viable project, and haven't for quite some time.

The convention business has been down since 9-11, no doubt.

I have traveled to several conventions in the last several months and I've noticed a drop-off in attendance at these meetings compared with last year.

The convention business will, however, bounce back and...

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