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SALEM, OR-In an about face from last week, the city council here has voted to begin negotiations with VIP’s Industries Inc. for the development of a $17-million conference center adjacent a new hotel on the former Ramada Inn property at 200 SE Commercial. VIP owns the land that would be used for both projects.

Last week, city council members voted to ask the public about the use of hotel taxes or the general fund to pay for an estimated $700,000 in annual operational expenses related to the conference center. This week, they decided to try and negotiate their concerns away by joint venturing on the project with VIP’s, which wants to get started as soon as possible.

City Manager Bob DeLong tells GlobeSt.com the city will hire a professional negotiator to represent it in discussions with the company. Urban renewal dollars would be used to construct the facility, he says, but the city cannot afford to pay for operational costs. The conference center would be about 50,000 sf. A city consultant estimates it could pump several million dollars into the local economy annually.

“Salem is in a tough financial situation, as a lot of cities are, and the council’s overriding concern is how to avoid getting into a situation where we have new and substantial impacts on city’s general fund,” says DeLong. “They want that minimized or perhaps even eliminated; that is the major issue they are attempting to resolve. At the same time, we understand the need for the private sector to move quickly.”

At the beginning of the month, DeLong told council members he spoke with VIP president Steve Johnson and believes that if the project wasn’t well on its way by November, VIP’s would pull up stakes and develop somewhere else.

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