A fight is looming over whether Utah and local governments should grant a tax subsidy to help build a convention-sized hotel in downtown Salt Lake City.
Salt Lake County Mayor Ben McAdams is bringing back the proposal this month to the Utah Legislature, which already balked once.
Salt Lake City hosts the world’s largest trade show for outdoor gear, and organizers say they need a hotel with up to 1,000 rooms to satisfy the crowds and keep the bi-annual expos from leaving Utah.
Opponents say a tax subsidy gives one hotel an unfair advantage. McAdams counters that a convention hotel would draw more business for all the city’s major hotels.
“Our analysis shows that a rising tide lifts all boats,” McAdams told The Salt Lake Tribune.
McAdams was responding to a study commissioned by the Utah Taxpayers Association, which called the hotel subsidy an example of government “picking winners and losers in the marketplace.”
The study by consultants Hospitality Real Estate Counselors Inc. estimated that a third of the convention hotel’s revenue will come at the expense of existing downtown hotels.
It wasn’t clear how consultants calculated the numbers, and company officials didn’t immediately return phone messages Tuesday from The Associated Press.
McAdams said an amenity-rich 1,000-room hotel will cost so much — about $335 million — that no developer would build it without some government help.
The subsidy would come in the form of a rebate on sales and property taxes generated at the convention hotel. Those rebates would help pay for its construction.
Royce Van Tassell, a vice president of the Utah Taxpayers Association, said he rejects arguments that big groups avoid Utah because of the lack of a mega-hotel.
He insists many convention organizers generally look for venues in warmer climates, and that Salt Lake’s nightlife scene and hotel rates are drawbacks.
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