Developers break ground on 2 downtown SLC hotels

SALT LAKE CITY (AP) -- Real-estate developers are breaking ground on downtown Salt Lake City's first new hotels since a Hyatt Place was built in 2009.

The additions are for specialized segments of the hotel industry and won't satisfy the needs of the nearby Calvin L. Rampton Salt Palace Convention Center, which needs a much larger hotel that will require public-private financing to get built, said Scott Beck, president and chief executive of the Salt Lake Convention & Visitors Bureau.

Ground is being cleared for a 159-room extended-stay Hyatt House for business executives or families that need a place for a week or more. A Courtyard by Marriott with 175 rooms is for business and sales executives who drop into Salt Lake City for a night or two and need work stations in their rooms.

Both hotels will occupy the same parcel less than a block from the Salt Palace, but they won't cater to convention traffic and the location is coincidental, Beck said.

Instead, the Salt Palace needs a hotel with 850 to 1,200 rooms. No developer is willing to build it alone because "the return on investment is not there," Beck said.

It will take a sales-tax subsidy to get a convention hotel built, county officials say.

No convention-quality hotel has been built in Salt Lake City since the 750-room Grand America opened in 2001 ahead of the Winter Olympics.

Organizers of the Outdoor Retailer trade show, held in January and August for gear and apparel makers, have asked Gov. Gary Herbert to bring a larger hotel to downtown Salt Lake City for attendees forced to take rooms miles away. The shows draw more than 20,000 people.

The Salt Palace has doubled in size since 2001 to satisfy the signature trade show and is considered ideally suited for groups of 10,000 to 12,000 people, but it can accommodate more, Beck said.

The Outdoor Retailer show is an unusually large gathering for the Salt Palace, which packs exhibits tightly inside the center and uses outdoor tents to accommodate a larger summer trade show. The shows have been held in Salt Lake City since 1996 and pour $40 million into Utah's economy annually.

Salt Lake County owns the Salt Palace and asked Utah legislators in January for help getting a convention hotel built.

Salt Lake lost as many as 27 conventions last year because of the lack of a convention center, County Mayor Ben McAdams said.

"We believe it is a bottleneck hurting our ability to generate economic activity," he said Thursday.

The Utah Senate approved a sales-tax rebate for a hotel developer, but it failed in the House in March by four votes. McAdams said he was regrouping with legislators on a new effort to grant an incentive. He wants a convention hotel within a block of the Salt Palace, and said some developers believe they could build it on top of the Salt Palace.

U.S. Bank is loaning $19.4 million to developers Brown Realty, PEG Development and Blue Diamond Capital for hotels that will be managed by Hyatt Hotels Corp. and Marriott International Inc., The Salt Lake Tribune has reported.