BRIAN NEARING Staff writer
Section: CAPITAL REGION,  Page: B1

Date: Tuesday, April 29, 2003

County Executive Michael Breslin said Monday he'll support a new county hotel tax that is vital to a planned $185 million downtown convention center, even if Pepsi Arena isn't included in the project. In a meeting with the Times Union editorial board, Breslin said he was ``committed'' to passing the tax to help support the idea, regardless of his wish to move the arena's remaining debt onto the larger project.

The county executive may have removed a major stumbling block for the project, which is being spearheaded by Mayor Jerry Jennings. The mayor wants Gov. George Pataki and state lawmakers to create an authority that would borrow money to build a 275,000-square-foot convention center, attached 400-room hotel and parking for up to 1,500 cars.

Jennings had said adding the arena's remaining debt -- about $31.9 million in principal and interest through 2014 -- on top of the $185 million project could swamp the new authority and kill the deal for potential investors.

Earlier this month, Breslin wrote a letter to Pataki, asking arena debt be absorbed into any new convention center authority.

``This is not a matter of me saying, unless I get what I want, I'm taking money and going home,'' Breslin said Monday. ``These are not tied together.''

The county executive's support is crucial, as the proposed county 3 percent hotel room tax is expected to yield about $3 million a year to repay debt on the new convention center, which could run $8.5 million annually. The project also hinges on the state contributing millions of dollars a year, although no agreements have been reached.

``I'm pleased to hear the county executive supports the project,'' said Jennings, who last week accused Breslin of throwing a monkey wrench into the plan. ``Mike is an important part of the task force. This is a great project for the county and the region. It is not an appropriate time to discuss the folding in of other expenses.''

However, Breslin said Jennings' concerns that arena debt could sink the convention center might not be founded.

The arena opened in 1991 and had several money-losing years, but it turned the corner recently, according to figures released by Breslin's budget director, Joseph Pennisi. The county supports the arena through an existing 2 percent hotel tax along with any profits produced by running events at the arena. Any shortfall is made up through the county sales tax.

Because arena debt payments are dropping each year and proceeds from the hotel tax are projected to rise annually, the arena will become self-sustaining starting in 2005, according to Pennisi's projections.

A convention center task force appointed by Jennings has been meeting for months behind closed doors and is expected within the next few weeks to rank three possible sites for the project, the mayor said.

One site, promoted by Columbia Development Companies and The Galesi Group, is just west of the arena between State and Beaver streets around the former Wellington Hotel.

The other two sites are east of the South Pearl Street arena. The other two developers -- Omni Development Co. and Albany Convention Center Associates/Mercer Cos. -- are promoting sites bounded by Beaver Street, Broadway and Green Street.

Jennings said it would be up to the new authority to recommend a final site.