Portland Commissioner Steve Novick said this week he wants to limit how much local lodging tax could be diverted to help finance a new hotel for the Oregon Convention Center.

A May 2013 rendering of a proposed Hyatt Regency hotel at the Oregon Convention Center.

The

which operates the convention center, is leading negotiations with a development team that wants to build a $198 million Hyatt Regency hotel nearby.

But the Portland City Council and the Multnomah County commissioners would have to give their OK to divert proceeds from the lodging tax to pay off $60 million in Metro revenue bonds to help finance the hotel. Those bodies are expected to have their first chance to weigh in when they take up that issue in September.

Novick decided he didn't want to wait that long. He said this week that he wants only lodging taxes from hotel stays actually generated by conventions to go toward the hotel's financing.

"To the extent they're getting regular, old hotel business, the government should collect that like any other hotel," Novick said.

But parsing the tax revenue that way could upend negotiations between Metro and a private development group, which have nearly reached a funding agreement that hinges on the lodging tax.

"The financial size would get smaller, obviously, which would mean we'd have less to contribute to the project," said Ken Rust, a financial consultant hired by Metro and former chief administrative officer for the city of Portland. "There would be a bigger hole to fill."

Rust added it would be logistically difficult to separate convention-related hotel stays from other hotel stays. It could also make the revenue bonds a tougher sell to investors.

Metro has been discussing the lodging tax with city staff, but hasn't yet briefed the full City Council.

"I'm just tossing it out there," Novick said. "If people want my vote, that's where I am."

In addition to the $60 million in revenue bonds, the hotel developers say they need $18 million in direct subsidy from the state, Metro and the

. The private developers, led by

of Minneapolis, would contribute $118 million of the project cost.

The public subsidy is needed, Metro says, to allow the developers to build a large enough hotel to accommodate a 500-room block for conventions.

, which markets the convention center, says that would help it lure large out-of-town events and the dollars their attendees spend on hotel stays, meals and recreation.

-- Elliot Njus