Fort Worth, Omni Bless $90M Convention Center Hotel Plan

Council yesterday unanimously approved a proposal that absolves the city of any financial risk in the hotel's performance. The city's incentive package is valued at $29.8 million while state-funded perks are estimated to add another $16.9 million, says Scott Johnson, vice president of development and acquisitions for Omni, headquartered in nearby Irving. "There will be no risk to Fort Worth taxpayers or the general obligation fund," he stresses.

Johnson tells GlobeSt.com that immediately after yesterday's council vote that an RFP went out to architects. The plan for 600 rooms and 48,000 sf of meeting space are fairly set in stone, but a design option will include adding floors for 60 to 100 condos. "We're pretty confident it's something we want to pursue," Johnson says, "but we have to do the research to see if the market calls for it."

Johnson says it will be first quarter 2006 before construction can begin on a Texas-theme hotel with two restaurants, a swimming pool and exercise facility right beside the convention center along Houston Street. The hotel is eyed as a revenue-generating plum to lure larger conventions to its midst. If all goes as planned, doors will swing open in early 2008.

City officials and Omni have spent nine months negotiating the deal for the privately financed hotel project. Omni originally went up against 11 other hoteliers vying for the city project with a broad spectrum of proposals.

A completion guarantee has yet to be inked, but definitely is part of the plan, according to a city-generated press release. All hotel and sales tax incentives will be performance-based. Under the 10-year incentive package, Omni will get 1% of local sales tax and local hotel taxes; state sales and hotel taxes; and a property tax abatement for the hotel and garage. City officials plan to offset parking garage costs with $6.3 million from the non-general fund. In a separate pact, Omni secured an option to sublease retail space on the garage's ground level to retail or commercial tenants.

The hotel developer and city signed a 99-year ground lease for $10,000. Omni has the option to purchase the land at the end of 2015 at a net cost of $1 million. The agreement ensures that Omni will become the convention center's exclusive caterer and concessionaire six months after the hotel opens. It also guarantees a block of rooms for convention center use.

Omni is required to hire at least 125 Fort Worth residents for the 250 full-time hotel jobs. Its other local mandate generates revenue for Fort Worth companies and minority/women-owned businesses. Omni, holding the right to pay the least amount, must spend at least $12 million or 20% of the construction costs with Fort Worth companies and $6 million with the minority/women-owned operations. After doors open, Omni has agreed to spend at least $100,000 annually with local businesses and at least $50,000 per year on the minority/women-owned enterprise companies.