What would you do with $350 million? The city of Phoenix decided to build a Sheraton hotel by the Civic Plaza at an estimated cost of $20 million a year, for the next 34 years. The city reasons the hotel will lure convention-goers--and their money--downtown.
The city hopes revenue from the hotel will cover debt payments. That may be hope against hope. Similar publicly financed convention center hotels in St. Louis, Washington, D.C., and Myrtle Beach are all losing money. To convince investors, Phoenix had to provide $13 million up front and create a safety fund from tax dollars in case the hotel fails to deliver.
With $20 million, the city could hire 500 new police officers. That is something to think about considering Phoenix's needless ranking as one of the 25 most dangerous cities in the country. Tying up public resources for a private resort company rather than improving core city functions seems like a case of misplaced priorities, at best.
Starwood Hotels & Resorts Worldwide, Inc., owner of Sheraton Hotels, made a $657 million profit in 2004 and its share price soared 67 percent. If building in downtown Phoenix were a profitable endeavor, surely Starwood could have entered the market of its own accord.
Phoenicians deserve better.
- Arizona Republic: "Phoenix borrows $350 million for hotel"
-Goldwater Institute: "This Cart Lacks the Horsepower"
- USA Today: "Baltimore Council supports publicly funded hotel"
-The Brookings Institution: "Space Available: The Realities of Convention Centers as Economic Development Strategy"