SPRINGFIELD — A consultant is questioning a developer’s projections on demand for hotel rooms in its proposed Glenwood hotel and conference center.

But city officials poised to invest public money in the project say the conclusion doesn’t dim their interest in the venture.

Springfield city officials paid consultant ECONorthwest $5,000 to vet the numbers in the developer’s confidential 10-year business plan to see if there were any major flaws. ECONorthwest delivered its report last week. The city gave The Register-Guard a copy of the ECONorthwest report plus a redacted version of the developer’s business plan documents in response to a public records request. The city removed trade secrets including detailed cost breakdowns and some financial projections.

Glenwood H&CC Development LLC is seeking a public subsidy for the project that it says will generate jobs and tax revenue and kickstart the revitalization of the Glenwood riverfront.

The projections for the occupancy rate — the percentage of available rooms occupied — are important in the discussion over the public subsidy. The occupancy rate helps determine how much hotel tax revenue the project could generate for the city and county, which are looking at that new revenue to help meet any financial pledges they make to the development.

Assistant City Manager Jeff Towery said nothing in the report raised a red flag for city officials. The city would earn enough hotel tax revenue from the project to meet its financial pledge, even based on ECONorthwest’s more conservative numbers, he said.

“We retained ECO to give an unbiased perspective, and I think we’re pleased with what we saw,” Towery said.

Lane County officials received the report last week and are still reviewing it, spokeswoman Anne Marie Levis said.

The developer’s business plan predicts the hotel’s occupancy rate will start at 61.5 percent in the first year and would rise steadily, cracking 80 percent in the 10th year.

Creating its own financial forecast, ECONorthwest concluded that the developer’s projections are “too aggressive” for several reasons. Data it reviewed showed the number of the hotel rooms booked in the local market has declined 0.2 percent annually since January 2000.

“Without marketwide growth in rooms sold, it is unrealistic for an individual property to assume an increase in rooms sold after reaching stabilization,” the point when awareness of the hotel is established, the report said.

Also too aggressive, according to ECONorthwest, is the developer’s first-year occupancy rate projection. The consultant said a 55.6 percent occupancy is more reasonable for the first year.

While ECONorthwest expects demand for rooms to level off after the third year, the developers project the occupancy rate will continue to climb after that.

“It is unrealistic to expect that you would get 80.4 percent occupancy in year-ten when we estimate the current upscale (hotel room) average is about 71.2 percent and the competing properties set (provided by Glenwood H&CC Development) show 65.5 percent occupancy,” the report said.

But the consultant noted — and Towery echoed — that a state-of-the-art conference center intended to draw people to the hotel could best ECONorthwest’s expectations.

“If the facility is designed to offer a unique experience, and if that experience is in high demand, then the facility could outperform our projections,” the report said.

Towery said the city did its own internal estimates that were even more conservative than the numbers provided by ECONorthwest and the developers. “From that perspective, we think that the facility will generate adequate revenue to support the city and county’s contributions from room tax dollars,” he said.

Allen Lonstron, a member of the development group, said that while he’s comfortable with the ECONorthwest finding, he’s confident that the project’s uniqueness and the area’s need for conference space will attract the business volume that the project needs.

“This particular facility is being designed and built specifically to the specifications of what the market said it would support,” he said.

ECONorthwest reported that its lower projected occupancy rates mean less hotel room tax revenue, but not drastically less.

The consultant said the difference in city hotel tax revenue between its and the developers’ projections is $164,382 over 10 years, or 5.8 percent. The developer estimated the project would generate $6.6 million in lodging tax revenue for the state, county and city during that period.

“In any case, the difference in lodging tax revenues is relatively small, and is unlikely to have an impact on the feasibility of the project,” the report said.

ECONorthwest found that the developer’s projections for average daily rate — the price paid by a hotel guest for a room — and other revenue it would earn from meeting space and food and beverage appear to be on target.

The developers propose a 150-suite Hyatt hotel and a 47,000-square-foot conference center along the Glenwood riverfront.

They are seeking a subsidy from the city and Lane County for the $17.1 million conference center as they say it’s not viable without public support.

The city has signaled its intent to provide $2.5 million over 10 years for the project using solely hotel tax revenue. Lane County commissioners are still mulling a request totaling $6 million over the next decade using hotel tax revenue and possibly video lottery funding. They will resume their discussion during a work session and public hearing scheduled for July 23.

If Lane County agrees to the request, the city and county would need to finalize a formal agreement with the developers before they made any financial contribution.

Towery said terms could be included to protect any public investment. One example he gave is that city and county officials could require the developer to divert any excess revenue from the conference center if room tax revenue is falling short.

The disclosed portions of the business plan provide new details on the project, which would be behind the Ramsey-Waite equipment dealership on Franklin Boulevard. It would open in 2016.

The ground floor of the conference center would feature an 11,500-square-foot ballroom that could seat 1,000 people or could be divided into smaller rooms. It also would have a 4,200-square-foot common area, a cocktail lounge and a restaurant. The second floor would feature 12 private executive conference rooms, a business center and four smaller teleconference rooms. Each conference room would be outfitted with state-of-the art equipment: digital audio and video systems; wraparound white boards; and display screens, lighting and window tinting controlled by remote.

Visitors would enter a front lobby that connected to both the $25.8 million hotel and conference center with floor-to-ceiling glass walls offering a view of the Willamette River.

The five-story hotel with underground parking would feature an indoor swimming pool, fitness center, gift shop and business center.

ECONorthwest reviewed the full 157-page business plan after signing an agreement that it would not disclose any of its contents.

The city released redacted versions of the business plan and consultant’s letter to The Register-Guard in response to a public records request it filed in late April.

Officials redacted information it deemed “trade secrets,” business information that has commercial value and could give a competitor an edge, if known. The business plan is heavily redacted, but the consultant’s report was virtually untouched by redactions.