Expanded Convention Center sought $100 million project would double size

December 11, 1990|By David Conn John W. Frece of The Sun's Metropolitan staff contributed to this article.

Some of the people who first recommended building a Baltimore Convention Center gave a repeat performance yesterday, calling for a $100 million-plus expansion of the downtown facility that would more than double its size and shore up the city's ability to compete for national convention business.

The expansion is needed if Baltimore wants to retain its competitive edge in the convention industry, said Robert Hillman, chairman of Gov. William Donald Schaefer's Baltimore Convention Center Authority, who was one of the city planners who helped create the first phase of the Convention Center. "We have already started to lose repeat business and will lose more" if the center remains as it is, he said.

But even before the ink had dried on the authority's report, some legislators expressed opposition to and skepticism about taking on such a large project when the state faces a projected budget deficit of $423 million.

Mr. Hillman presented his panel's final recommendations to the governor and the General Assembly yesterday. The report calls for expanding and renovating the Convention Center to add 600,000 gross square feet of space, a 150 percent increase. That would expand the exhibit space by 185,000 square feet, to 305,000 square feet and would more than double the meeting-room space to 87,000 square feet.

If the General Assembly approves the project, construction would begin in 1992 and end in late 1994 or early 1995, Mr. Hillman said. He said convention organizers typically plan five years in advance.

Yesterday's report confirms the recommendations the city's Convention Bureau made a year and a half ago. Mr. Hillman said his panel thinks that "their proposals were largely correct."

The expansion would be south and southwest of the existing center and would require the relocation of the 52,300 square foot Festival Hall, just west of the Convention Center between Howard, Sharp, Pratt and Camden streets. The 7-year-old ZTC building can be disassembled and rebuilt if the city chooses to do so.

Mr. Hillman said that because the construction would be financed by a revenue bond, just as the first phase of the Convention Center was, it would not cost Maryland citizens a penny beyond the $2 million needed for the initial architectural work.

Once 35 percent of the design work is done, he said, the authority will know better how much the full job will cost. Last year the Convention Bureau estimated the work would cost $130 million, and its executive director, Wayne Chappell, said last month that the cost could range from $130 million to $150 million.

"The additional revenue for the expanded center would pay for the bonds for the expansion," said Mr. Hillman, a partner in the Whiteford, Taylor & Preston law firm.

But some legislators were skeptical about the idea, coming as it does in the midst of the state's worst fiscal crisis in a decade.

"I say it is a very bad year," said Sen. Charles H. Smelser, D-Frederick, chairman of the capital budget subcommittee of the Budget and Taxation Committee. "The timing is bad for most everything. We have our hands full right now trying to reduce the deficit and get our budget in balance.

"In my opinion, it is not going to fly, not with my vote."

Delegate Timothy F. Maloney, D-Prince George's, chairman of the capital budget subcommittee of the House Appropriations Committee, was more upbeat about the proposal because of its reliance on revenue bonds instead of general-obligation bonds. General-obligation bonds finance the state's capital budget, which, Mr. Hillman noted, faces about $500 million in proposals for only $330 million in projected spending.

"But the question is," Mr. Maloney said, "if they don't plan to use G.O. bonds, will the revenue bonds work? That is, are their financial predictions realistic, and will they be satisfactory to the bond market?"

If lawmakers balk at the size of the bonds needed for the expansion, the authority suggested an alternative that would pay for half of the construction costs: imposing a hotel room tax of $1 or $2 a night and a $1-a-transaction car-rental tax.

Mr. Hillman said such taxes would have no real effect on Maryland residents because they would tax the businesses that stand to gain the most from more convention business. They would generate about $8 million a year to pay for the bonds, he said.

He said legislators can look to the example provided by the first phase of the center. "The Baltimore Convention Center is, and has been since its opening a decade ago, an extremely profitable investment for the State of Maryland," the report says. "State tax revenues generated by increased delegate days associated with the Baltimore Convention Center since its opening in 1979 total $58.5 million."

The center's cost to date has been $39.3 million. By the end of 1995, when the original bonds expire, Mr. Hillman said, the center will have run up $51.9 million in principal and interest costs but will have generated almost $70 million in tax revenues.

In the meantime, 6,759 jobs have been created because of the center, and the center has generated a total direct and indirect economic impact of $244 million a year for the state's economy each year since it has opened, the report states.

But a Convention Center big enough for 85 percent of the nation's conventions in 1979 now can accommodate only 60 percent, Mr. Hillman said.

Doubling the center's size "would make us competitive for at least 20 or 25 years," Mr. Hillman said. It also would generate cumulative profits of more than $170 million over the 20-year life of the bonds, he added.

Mr. Smelser remained skeptical, however. These big-ticket projects "always come in low" in the initial cost estimate, he said. "Some [legislators] take the bait and go with it and then say if I had known it was going to be that high I wouldn't have voted on it."

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