No Agreement Reached with Omni on Convention Hotel

Mayor Ben McAdams announced today that he is walking away from a proposed contract with Omni to develop a convention headquarters hotel adjacent to the Salt Palace Convention Center, after nine months of negotiations. McAdams said the company’s proposed financial terms during the last month of talks became too costly to Utah taxpayers.

McAdams said the development of a convention hotel is an important part of growing the county’s convention business, but Omni was asking for too much in public participation.

“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.

The process to develop the convention hotel was launched in 2014, with passage of legislation that provided post-performance tax incentives refunded to the hotel owner after project completion for the construction and maintenance of public spaces including convention meeting rooms, public parking and other public amenities. McAdams said that Omni’s original proposal indicated they would use the incentive package to develop a convention hotel and additional public meeting space. Last November, a 13-person committee reviewed the proposal and recommended that the county move forward with negotiations on project terms. By mid-July, McAdams said Omni wanted that incentive and then some, in the form of public grants and cash advances.

McAdams said another sticking point involved an agreement with hotel owners to block rooms for citywide conventions at the Salt Palace. While willing to “technically” block rooms, McAdams said Omni wouldn’t agree to the room block market rate protection that was set forth in the original request for proposal (RFP) and is typical for a convention headquarters hotel. Without room rate protection, McAdams said Omni could effectively get out of the agreement by offering above-market room rates not acceptable to event sponsors. McAdams said providing the incentives to the private hotel owner and then ultimately not having a viable room commitment was not acceptable to the county.

“I strongly believe in this private hotel development and its economic value to the state, but not at any cost. Salt Lake County is a great place to invest, with a strong, vibrant economy. We just need to find a hotel developer that understands what an opportunity this is, and wants to negotiate a fair deal,” said McAdams.

He said the county plans to reissue the RFP and stands ready to work with new development partners.