Why does a new Broadway theater also require a new hotel? 

Portland's lodging industry is struggling. Currently, the city lands in the bottom five markets in the country for hotel recovery, with too many empty rooms, occupancy rates below pre-pandemic levels, and distressed downtown properties selling at staggering discounts. 

Portland’s hotel occupancy averaged just 61.8% in 2025, compared with 71.5% before the pandemic. Last week, Hotel Zags sold for $10 million, nearly 80% below its purchase price in 2013. In July, Kimpton RiverPlace Hotel sold for $11 million, more than 82% below its purchase price in 2015. And in February, Portland Marriott Downtown Waterfront sold at a 64% loss. 

Furthermore, building a new theater on the PSU campus could threaten the future of Morton’s, a popular dining destination for theatergoers for more than 25 years. Other nearby restaurants that could lose theater-related business include Proof Reader (inside the Marriott), Terrane and Xport Rooftop Lounge (both inside The Porter Hotel), Higgins, and Q Restaurant & Bar.

“This jeopardizes loyal businesses that have stayed open in a difficult climate, exacerbating Portland's already weak economy and potentially putting the nail in the coffin for some of these establishments,” said Terry Goldman, general manager of The Porter Portland.

Additionally, he said the cast and traveling crew of currently touring shows regularly stay in hotels like The Porter, The Marriott, The Hotel Vance, and Hotel Zags. Moving to a new location with an attached hotel will pull hundreds of overnight stays a year away from existing properties, further impacting an already volatile hotel market. 

Despite this crisis in the local lodging industry, city officials and Portland State University continue to promote a plan to build a new, publicly subsidized hotel as part of a larger performing arts complex that will directly compete with existing downtown properties. 

Why? Because unlike the neighborhood of existing hotels, bars and restaurants that surround the Keller Auditorium, the proposed location of the new theater complex at the south end of the PSU campus has no existing hotels or restaurant amenities. 

Of the many problems associated with the City-PSU theater proposal, the lousy location, as evidenced by the need to build a new hotel and parking garage, is one of the most glaring. It deserves greater scrutiny by elected officials and the local media.

It’s bad enough that city and PSU officials don’t seem to understand the economic realities of Portland’s already struggling lodging market, but even worse, they’re introducing public money into the equation. State and local taxpayers will subsidize the new hotel as part of the broader funding for the full PSU complex that includes two theaters, classrooms and a new parking garage.

In its official solicitation for a hotel developer, PSU disclosed that Prosper Portland, the city's economic development agency, had committed $7.6 million toward site clearance and development benefiting all property owners, including the proposed hotel. I guess they don’t see the irony that PSU is already operating a failing hotel on the property. 

PSU argues the hotel would attract additional visitors and generate overnight stays. 

But if existing downtown hotels are struggling to fill rooms, what makes another hotel at the edge of downtown financially viable?

More importantly, why should taxpayers help prepare the site for another hotel when existing businesses are fighting to recover?

The hotel is just one symptom of a larger problem. 

The proposed theater site at SW 4th and Lincoln is wedged between PSU and a freeway. Making it a viable Broadway destination would require taxpayers to help finance what Keller already has: parking, restaurants, bars and nearby hotels. 

Freeway access to this area is already challenging. Now imagine the back ups Broadway shows would create. Even the city's transportation study identified potential congestion and traffic backing up onto I-405, requiring further analysis.

This begs the question:

Have any independent urban planners, designers or architects identified this site as the best location for Portland's premier performing arts center?

Would this isolated piece of property with an existing failing hotel even make the short list? 

City councilors should answer these questions and many more before voting to commit to financing the project on Dec. 1.

The Keller, with its iconic fountain, is part of Portland’s established downtown cultural district with the Portland Art Museum, Oregon Historical Society, and Arlene Schnitzer Concert Hall. The Keller is surrounded by parks and public spaces, hotels, restaurants, parking garages and transit connections that support 400,000 visitors annually.

Why is the city trying to spend hundreds of millions attempting to recreate those advantages somewhere else?

With Portland facing serious financial constraints, the alternative deserves consideration.

The Keller Affordable Fix offers a five-year, $15 million maintenance and improvement strategy to keep Portland's largest theater operating without a prolonged closure. It would preserve a profitable public asset, support downtown businesses and allow time to assess new private theaters and changes in Portland'5 management.

Portland doesn't need to spend nearly a billion dollars trying to manufacture another Broadway destination.

It already has one.

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