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Metro tries to fend off HQ hotel challenges

Opponents revise lawsuit as agency seeks resolution


by: COURTESY OF METRO/MORTESON DEVELOPMENT - A rendering shows the proposed $197.5 million headquarters hotel that could be constructed near the Oregon Convention Center. Metro, the lead agency on the project, is being buffeted by legal challenges to its plan to finance the hotel.It’s getting hard to follow the fight to block Metro’s proposed headquarters hotel without a scorecard.

Three different legal actions are underway in three different courts. Although Metro would like to consolidate all present and potential future legal challenges before a single Multnomah County circuit judge, that cannot happen because one of them is already before the Oregon Court of Appeals.

If that’s not confusing enough, the hotel’s main opponent has not officially filed any of the legal challenges. It is the Coalition for Fair Budget Priorities, a group of Portland-area hotel owners, which includes Provenance Hotels, the Hilton Portland & Executive Tower and members of the Asian American Hotel Owners Association. The challenges have been filed by campaign consultants working for the group, however, not the hotel owners.

Metro has been working for nearly two decades to put a 600-room hotel near the Oregon Convention Center, which is owned and operated by the regional government. After several false starts, the elected Metro Council has approved entering into a contract to have such a hotel built by developer Mortenson Construction of Minneapolis. The Hyatt Hotel chain would buy and operate the hotel when the project is completed.

The project budget is around $197.5 million. Mortenson has agreed to pay $119.5 million of the cost. The next largest contribution would be $60 million in bonds issued by Metro. The remaining $18 million would come from loans and grants by Metro, the Portland Development Commission and the Oregon Lottery.

The Multnomah County Commission supported the project on Dec. 12, 2013, by approving a measure to dedicate the county transient lodging taxes collected at the hotel to paying off Metro bonds. That prompted two challenges financed by the other hotel owners.

First, Michele Rossolo, a political consultant hired by the hotel owners, filed a petition to refer the county commission’s vote to the ballot. Although the hotel owners claim they collected enough signatures, Multnomah County elections officials refused to accept the petitions after county attorneys ruled the vote was an administrative action that cannot be referred to the voters. The hotel owners challenged that ruling in Multnomah County Circuit Court and lost. They subsequently appealed that decision to the Oregon Court of Appeals, which has not yet issued an opinion.

Because the referral did not qualify for the ballot, hotel owners have not filed a political action committee with the Oregon secretary of state’s office. That means their petition-related contributions and expenses have not been reported to Oregon elections officials or made public.

Following the loss in Multnomah County Circuit Court, the hotel owners challenged the legality of the proposed bond sale in Clackamas County Circuit Court. A lawsuit was filed by Paige Richardson, another campaign consultant hired by the hotel owners. It was recently amended to be more clear that they do not believe Metro has the authority to issue bonds for the hotel project without the approval of Metro’s voters.

On April 22, Metro filed what is called a “validation proceeding” in Multnomah County Circuit Court. The process allowed by state law lets the regional government consolidate all legal challenges to its action before a single judge, who resolves them. Metro is publishing public notices to tell all potential project opponents that they must file their objections with the court. The notification deadline ends in about a week.

Richardson says hotel owners will challenge Metro’s right to consolidate all legal challenges before a single judge. Even if they fail and must move their lawsuit from Clackamas County, the hotel owners will still be allowed to continue asking the Oregon Court of Appeals to place their referral measure on the ballot.