Ready for future growth

January 06, 1994

During 1993, the City of Baltimore:

* Spent $5 million to buy a 276-car garage near the Inner Harbor and got an adjoining 280,000-square-foot Brokerage retail and office complex thrown in free.

* Agreed to forfeit a $6 million loan guarantee to acquire title to an Inner Harbor hotel and restaurant complex known as Harrison's Pier 5. The project's owners, saddled with $13 million in debts and penalties, sweetened the deal by paying the city $750,000.

* Exercised an option to buy the 73-acre Seton Business Park, off Northern Parkway near Liberty Road, for $1.6 million.

There is no doubt that the Seton acquisition was a good deal. It is one of the last large undeveloped industrially zoned parcels in the city. It is a splendid site for attracting new or expanding industrial businesses.

The other acquisitions, too, could prove to be masterful deals, if things work out right.

To reach that point, however, the city has to find a winning new format for the Brokerage. It hopes to turn the largely empty space into a combination of children-related services and shops, including a museum for children.

The Harrison's Pier 5 complex presents a different set of problems.

As many other late 1980s projects, it seems to have been designed with little consideration of economic realities, particularly in adverse times. Its 71-room hotel was too small to be marketed profitably, and the project assumed too much debt to make the numbers work. When the Board of Estimates agreed to take over the hotel complex just three days before Christmas, the city's top officials had little choice -- unless they wanted to lose the $6 million loan guarantee.

"We just bought a hotel we didn't want to," City Council President Mary Pat Clarke said of the action.

The city's intention is have a private manager run the complex until the market improves and then sell it. By that time, the new Columbus Center should be completed, adding to the Harrison hotel's viability and attraction to investors.

In hindsight, the Harrison complex never ought to have been built; it now unnecessarily blocks the Columbus Center's access to the water and restricts its possible expansion. But by acquiring the hotel at its low point, the city now holds all the cards and can decide in a few years from now how that four-story structure can be best used to enhance the Inner Harbor.

These deals represent a splendid chance for the city to position itself for future economic growth.

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