C.H. Johnson Consulting assisted the City of Salem in preparing projections and developing a deal structure for a combined hotel and conference center project for downtown Salem. The project was developed under an innovative public/private partnership.
The $19 million project, which features an integrated 200-room hotel and conference center with 45,000 square feet of exhibit and meeting space, is being developed to provide a high-quality venue to service the growing need for conference space in Oregon’s state capital.
As part of the engagement, C.H. Johnson Consulting worked with the City to develop a financing structure for the project that created a TIF district to fund the conference center element and required the selected developer/ operator to participate in the financing of the hotel. The developer/operator term sheet struck by the City provided for fair terms for both parties and accomplishes the stated goals for the project and the City. Interestingly, the hotel developer is responsible for the first $300,000 operating deficit at the Conference Center.
C.H. Johnson Consulting also conducted due diligence review to ensure the integrity and capacity of the developer to implement the project, and provided on going deal structuring negotiation support for the management and operating agreements.
The project moved forward according to the recommendations made by C.H. Johnson Consulting. The facility opened in February 2005. Demand for the facility is exceeding expectations and is scheduled to turn a profit in its first year of operation, ahead of schedule.