City and state officials reached agreement on paying for the $150 million Baltimore Convention Center expansion late yesterday, with Mayor Kurt L. Schmoke committing to financing $50 million of the cost -- previously a sticking point for the financially ailing city.
While Mr. Schmoke had supported the project and agreed to help pay some of the cost, he had not committed to the amount Gov. William Donald Schaefer wanted until yesterday.
But two days of meetings with city and state budget officials, financial consultants and staff members of the Maryland Stadium Authority -- which has run the Convention Center since April -- culminated yesterday in the city's commitment, officials said.
"It's wonderful news," said Bruce H. Hoffman, executive director of the authority. "We finally got a team really working together. I think we're finally in a position now to really go after this project."
The agreement yesterday means that the city narrowly slipped under the Jan. 13 deadline that Mr. Schaefer had set for Mr. Schmoke.
Two weeks ago, Mr. Schaefer gave the mayor an ultimatum: Either give him a written commitment to the $50 million or forget the Convention Center expansion being included in the capital budget he will send to the Maryland General Assembly this year.
Mr. Schmoke agreed to pay part of the cost last Wednesday, the day after Mr. Schaefer appointed the mayor's nominee -- city Finance Director William R. Brown Jr. -- to the Stadium Authority, which the governor previously had refused to do. That standoff had held the Convention Center expansion plans hostage for the last nine months.
Details for financing the project have yet to be worked out, though Mr. Hoffman said problems related to paying for the expansion with the sale of revenue bonds were not insurmountable.
Both the city and state have limits on how much money they can borrow, and officials are working on ways to pay for the bonds to finance the expansion within those debt ceilings.
In the state's case, its self-imposed Capital Debt Affordability cap is $350 million; the city's limit on borrowing this year is $45 million.
A study prepared for the Stadium Authority shows that the cost of expansion and renovation could be paid for with the sale of revenue bonds, which would require that part of the sales tax and hotel-occupancy tax revenue generated by the Convention Center be earmarked for repaying the principal and interest on the bonds.
The Schaefer administration wants to pay the state's $100 million share of the cost with proceeds from the sale of revenue bonds over the next two years.
What lies ahead now is getting the project through the legislature, where members of the Montgomery and Prince George's counties delegations have threatened to kill the proposal in reprisal for the city's support of a budget-cutting plan in the November special legislative session.