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Private funds option for convention site hotel

Supporters see outside financing as way to rescue stalled Albany project

Published on 9/17/2008 by the Times Union written by TIM O'BRIEN, Staff writer, Times Union

Private funds option for convention site hotel

Supporters see outside financing as way to rescue stalled Albany project

By TIM O'BRIEN, Staff writer, Times Union

First published: Saturday, September 27, 2008

ALBANY -- Supporters of the $400 million Albany Convention Center are trying to save the proposed project by convincing a developer to privately finance the construction of a hotel that would connect to the convention hall.

The convention center's board members want to pare back the taxpayer share of the project -- proposed as a way to revitalize downtown -- because of concerns that state fiscal problems make it unlikely Gov. David Paterson will support a $190 million increase in state aid for the project.

"That is an option that has to be looked at," board member and Assemblyman John "Jack" McEneny said. "A $400 million project has everybody re-looking at the finances. They are now trying to find new and creative ways to do it."

McEneny confirmed the board is examining private hotel financing as a way to reduce taxpayer expense on a project that has been on hold for months. The cost of the hotel is unknown.

Paterson has ordered an independent study of the project's viability before deciding on whether to provide funding beyond the $200 million that has already been committed.

Originally, the plans called for the public to pay for construction of a 400-room Sheraton Hotel, a 1,100-car parking garage and a 244,000-square-foot convention center.

Gavin Donohue, chairman of the authority's board, declined to discuss specifics of what was being discussed. Asked if having a developer build the hotel was an option, Donohue declined comment.

"We're looking at a dramatic cost-saver," he said. "I'm not prepared to say."

Donohue said the authority board, whose meeting Friday included more than an hour behind closed doors, is aware now is a difficult time to ask the state for more money.

"We recognize, and it would be wrong of us not to recognize, the pressures on state government," he said. "We're studying the project, and we're trying to address the issues. If we don't have a commitment from the state, we're obviously not going to have a convention center. They are open to suggestions."

Donohue said a decision needs to be made within the next six weeks.

Morgan Hook, a Paterson spokesman, would not discuss any changes.

"We need to see more details of what the authority is talking about," he said. "I don't think it would be necessarily appropriate to speak hypothetically about it without knowing exactly what the plan is."

Tim O'Brien can be reached at 454-5092 or by e-mail at tobrien@timesunion.com