First the binge, now the hangover.
A headline in the Aug. 10 Omaha World-Herald succinctly sums up the state of affairs at the city's new convention center hotel: ``With Too Few Conventions, Hilton Can't Pay Its Way.''
The story described how the city of Omaha, Nebraska, would have to tap reserve funds to make payments on the bonds it sold to build the hotel in 2002. When the city sold the $103 million in bonds, it also promised to make up a portion of the debt service, if hotel revenue fell short. In part because of that promise, Ambac Financial Group Inc. guaranteed the bonds.
The hotel, owned by the city and operated by Hilton Hotels Corp., is meeting its goal of filling two-thirds of its rooms, but not at the rates originally projected, which were $143.43 in 2005 and $147.07 in 2006. A couple can stay there this weekend, for example, for as little as $109 per night.
That's not all. It looks like the city will have to increase property taxes in 2007 to pay debt service on the bonds it sold to build the convention center. The center has booked 14 conventions for 2006, and only six in 2007, the newspaper reported.
``2007 is a big problem,'' the newspaper quoted Dana Markel, director of the Greater Omaha Convention and Visitors Bureau. ``We are very concerned about it.''
Welcome to the convention business. Now get ready to raise taxes.
Looks like Baltimore taxpayers better look out for yet another O'Malley Tax.