SALT LAKE CONVENTION CENTER HOTEL Utah Taxpayers Association “Utah Taxes Now” Conference May 2013

Existing Downtown Hotel Market  11 full-service hotels (4,800 rooms)  Existing hotels entered the market with little or no government help  Private investment in downtown hotels has been extraordinary—superior to other cities  Downtown well supplied by a wide range of hotel rooms  Grand America Hotel (775 rooms) is a convention hotel  Grand and Little America hotels have surplus capacity  1,000 room convention hotel would add 21% of room inventory (full-service) to a well-supplied market

Strategic Advisory Group (SAG) estimates about $100 million (NPV) subsidy is needed to bring a 1,000 room convention hotel to downtown Salt Lake Source: SAG, Convention Headquarter Hotel Financial Model Assessment, December 2012, pg.17

Problems and Issues  Unfair tax policy (how do existing hotels compete against a hotel receiving about $10 million/year in tax benefits?)  Approach incentivizes the subsidized hotel to take business from existing hotels  Public will lose tax revenue when lodging, restaurant and banquet business moves from existing taxpaying hotels to the non-taxpaying convention hotel  Public will lose tax revenue if a heavily subsidized convention hotel keeps taxpaying hotels from entering the market  A large portion of spending by delegates staying at the convention hotel would not be taxed for 15+ years  The approach boost convention business is not supported by Utah’s hotel and restaurant associations—which comprise 67% of convention delegate spending