After a bitter referendum battle and decades of debate, Dallas broke ground Tuesday on the city-owned Dallas Convention Center Hotel.
City leaders marked the occasion with confetti, a marching band and a "Big D" hoisted by crane above the construction site on Lamar and Young streets.
Voters endorsed the $500 million, city-owned hotel in May after a bitter referendum campaign, but the debate has raged even longer in Dallas.
Opponents argued the city should not be in the hotel business and said private developers would have built the hotel if it were a good deal.
Supporters said Dallas loses big conventions to other cities that have hotels attached to convention centers and that the current lull in the economy makes construction more affordable.
"This has been something that's been talked about in our community for 25 years," said Dallas Mayor Tom Leppert.
Support for a convention hotel was a key plank in the mayor's election campaign.
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"People said we couldn't get it done, and we've gotten it done," Leppert said.
The city sold bonds to finance the hotel in August at an interest rate more favorable than first expected.
"That move alone saved us $147 million, which pushes directly to the bottom line to benefit the citizens of the city of Dallas," said Councilman Ron Natinsky, a strong hotel supporter.
Natinsky helped negotiate the city's deals with developer Matthews Southwest and hotel operator Omni.
The developer plans additional construction around the hotel that will appeal to local residents and help revive the downtown area.
"There will be great restaurants to go to, there will be interesting entertainment," said Jack Matthews, president of Matthews Southwest.
He said potential tenants working with his firm are interested in becoming involved in the project.
"People are saying this city of Dallas is really serious about stepping forward and making downtown Dallas a great place to be," Matthews said.
The Dallas Convention and Visitors Bureau Tuesday reported a substantial increase in convention bookings since voters approved the hotel in May. Bureau president Phillip Jones said Dallas booked enough room nights for the period from 2012 to 2015 to move up from 11th among convention cities and back into the top five.
Spillover business that would help other Dallas hotels was a key promise from the pro-hotel campaign.
"It's going to be very important to our economy," Leppert said. "It's more than a building. It really is building our economy."
The hotel is expected to open for business in early 2012.
