The city of Dallas' efforts to build a headquarters hotel next to its convention center have apparently hit another snag. According to a story in the Dallas Morning News, city officials are having troubles forging an agreement with Omni Hotels to operate the $356-million city-owned property, for which construction is slated to begin in May. And, as previously reported, a well-funded effort by a number of local hoteliers, including Hilton Anatole owner Harland Crow, is attempting to block the project, contending the hotel isn't needed and that it will create unfair competition for the other properties in the city.

"It's always an issue when a public/private project is under consideration," says Dallas-based consultant Rick Besse, senior managing director of Horwath HTL. "I believe the hotel will be built eventually, although the timing is suspect now because of the economy."

Despite the controversy, Besse believes the project is important for the city and the convention center. "It's a great center, but it needs a hotel adjacent to it. It's a very important consideration for many groups. The center can lose a lot of business if there is no hotel adjacent or very close by."

And should Omni and the city not be able to reach an operating agreement, Marriott International is waiting in the wings. According to Marriott spokesman Roger Conner, Chairman Bill Marriott recently sent a letter to the Dallas city council expressing interest in operating the hotel and recounting the chain's long track record with big-box convention properties.

"With 65 to 70 properties, we have a huge presence in the Dallas area and generate a lot of economic impact," says Conner. "Our roots here go way back: The third hotel we opened was in Dallas in 1960."