The owner of the Hallmark Hotel on Howard Street plans to close the hotel permanently Oct. 29 unless he gets financial assistance from the city or the state to remain open.
Owner Bernard Sandler said the 87-room hotel at 8 N. Howard St. never fully recovered from the disruption to business caused by the construction of the Howard Street transit mall in the mid-1980s and is now being adversely affected by the construction of the Howard Street section of the light-rail line.
He said the hotel's 35 employees were notified yesterday that the hotel will close its doors permanently Oct. 29. If it does, he said, he probably will make plans to liquidate the hotel under Chapter 7 of the U.S. Bankruptcy Code.
The hotel has been operating under Chapter 11 of the code since 1983 and is technically in default of loans from the city of Baltimore and the federal Small Business Administration, he said.
The 82-year-old Hallmark hotel, an affiliate of the Best Western chain, is the second business this year to claim it has been adversely affected by the light-rail construction. Owners of Baltimore Life Insurance Co., in the 900 block of North Howard Street, have made plans to move to Owings Mills, in part, they said, because the route of the light-rail line comes across their property.
Mr. Sandler, 63, bought the hotel in 1979 for $385,000 and has since invested $1.5 million in improvements. He said the light-rail construction has hurt his business because guests have difficulty reaching the building and complain about the noise outside when they do. He said business is down 40 percent this month compared with the same period a year ago.
He said he has asked city and state officials for help in paying his bills during the construction but hasn't had a response from them.
"I think they owe it to the merchants on Howard Street to provide some kind of disaster loans or other low-interest loans in a situation like this, especially coming right after the previous construction," he said. "To me, this isn't any different from being in an earthquake."
Helen Dale, a spokeswoman for the Mass Transit Administration, said the agency agreed to provide access to the hotel during the construction and is doing so. She said the state has no funds to compensate owners of hotels or other businesses for any drop in business caused by construction of the light-rail line.
A representative of the Baltimore Economic Development Corp. said she did not know of any steps that city was taking to help keep the hotel in business. An official of Center City-Inner Harbor Development Inc. declined to comment, saying the matter was involved in court proceedings.