A battle is brewing between Dallas city officials and a taxpayer watchdog group over construction of a $550 million Omni hotel adjacent to the Dallas Convention Center. Ultimately, voters will decide its fate.

Proposition 1 on the May 9 ballot asks voters to prohibit the city from building the publicly funded convention center hotel. A group called Citizens Against the Taxpayer-Owned Hotel, which formed around this issue last year, brought the proposition to the ballot by gathering more than 60,000 signatures. A primary supporter of the group is Harlan Crow, whose company, Crow Holdings, owns the Hilton Anatole Hotel, according to various press reports. Anne Raymond, an executive at Crow Holdings, is the director of CATOH.

“We’re not opposed to a convention center hotel; we’re opposed to a taxpayer-owned convention center hotel,” says Brooks Love, spokesman for CATOH. They also argue that the public sector should not compete with the private sector. “You have taxpaying hotels that will be competing with a government-owned hotel that can operate at losses for sustained periods because they’ll have taxpayers footing the bill,” says Love. “We also don’t think its right to expose taxpayers to the level of risk that they are going to be exposed to with this hotel. The hotel business is a risky business especially at this point with revenues plummeting year over year in the first quarter,” he said. CATOH claims the city is trying to undermine Proposition 1 by rushing construction of the hotel so that it’s under way before the May 9 vote.

On the other side, Dallas Mayor Tom Leppert and the city council, which approved the project earlier this year, believe that the new hotel is essential for Dallas to compete as a convention destination. In a letter sent out to drum up support for the hotel, Mayor Leppert wrote: “Dallas’s potential as a convention destination city and a magnet for business development has never been more in jeopardy.” Supporters of the project say the city will have a more difficult time attracting annual conventions without a headquarters hotel and that a loss of business will mean the loss of jobs and revenues. According to Leppert, a new convention center hotel would also lead to more development in the area and revitalize the downtown. “We can’t afford not to invest in the convention center hotel,” he stated. The city has launched a Web site called Vote No, Dallas to support its efforts.