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City Council approves deal with Omni to operate convention center hotel

Post Date:07/18/2017 11:29 AM

The Oklahoma City Council voted Tuesday to approve a redevelopment agreement with Omni Hotels for a headquarters hotel to support the MAPS 3 Convention Center.

The agreement calls for Omni and the City to share development costs for the 600-room, full-service hotel, which is planned to be built just north of the MAPS 3 Convention Center near the MAPS 3 Scissortail Park, Chesapeake Energy Arena and other major attractions in downtown and Bricktown.

“Our partnership with Omni will support our investment in the MAPS 3 Convention Center and position it to become a resounding success,” said City Manager Jim Couch. “Having a top-quality, full-service hotel next door to the convention center will maximize Oklahoma City’s return on an important investment in the increasingly competitive convention business. This is good for Oklahoma City and good for Oklahoma.”

The City and Omni had been in negotiations on the deal since Sept. 27, when the Council selected Omni’s proposal after a public bidding process.

The convention center and hotel are scheduled to be finished in 2020.

About the agreement

The agreement calls for a $150.1 million commitment from Omni and an $85.4 million commitment from the City. The agreement does not raise taxes.

The City’s 36 percent share of the development cost is one of the lowest in the country for recent convention center hotel deals. It compares favorably to five deals in similar cities, which have public participation ranging from 32 percent to 61 percent.

The Council’s approved funding plan uses 10 sources and a revenue stabilization fund to spread out and minimize financial risk. The City will sell municipal bonds to fund its share of the hotel construction costs, and use the 10 funding sources to pay off the bonds over 25 years.

More than half of the City funding comes from four revenue sources generated by the hotel itself:

  • Hotel property taxes
  • Sales taxes from hotel operations
  • Hotel occupancy taxes
  • State matching funds from the sales and hotel occupancy taxes

The other six funding sources are tax increment finance (TIF) districts and revenue from leases and the hotel land sale:

The two existing TIF implementation plans will be amended to use currently uncommitted funds for the hotel project. The City owns the Skirvin property and OCURA owns the Bass Pro property, and revenue from the leases will also be used for the hotel.

The revenue stabilization fund will allow the City to soften the potential blow of economic recessions, and lessen the risk and possible impact to the City’s operating funds.

The agreement also calls for the City to provide 450 parking spaces, which Omni will lease at market rates.

About the hotel

Early plans for the 600-room Omni hotel call for a mid-rise tower to be designed by architect HKS, with about 570,000 square feet of total space.

The full-service, four-star hotel will have six restaurants and bars with about 16,500 square feet of space, plus more than 50,000 square feet of ballroom and meeting space.

The Alliance for Economic Development of Oklahoma City retained HVS, a global hospitality industry consultant group, to study the hotel’s potential economic impact. HVS estimates the hotel will help the new convention center draw more events and out-of-town attendees than it would without the hotel, boosting spending from $62 million per year to $137 million per year.

Hospitality is the fastest-growing segment of the local economy, and visitors contribute more than $2 billion in annual spending inside the metro, according to the Greater Oklahoma City Chamber.

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Media Contact
Kristy Yager
(405) 297-2550 / (405) 863-2831
kristy.yager@okc.gov

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