Convention Center may get Md. boost More state funds would aid promotion, allow smaller tax rise

April 09, 1996|By Gary Gately | Gary Gately,SUN STAFF

After months of increasingly urgent warnings that inadequate marketing jeopardized Baltimore's convention trade, the General Assembly was expected last night to more than double spending in the coming year for the agency that markets the center.

The move, in the final hours of the legislative session, would increase the fiscal year 1997 budget for the Baltimore Area Convention and Visitors Association from about $2.8 million to nearly $6 million.

The state Senate passed the hefty increase in amendments to a bill increasing Washington County's hotel tax, to promote Civil War tourism. Baltimore's increase would be financed primarily by allowing the city to spend highway user fees to market the center. The House was expected to approve the amendments late last night.

As part of a deal brokered by Gov. Parris N. Glendening, Mayor Kurt L. Schmoke and legislative leaders in both houses, the city's hotel tax also would increase from 7 percent to 7.5 percent to help cover the city's cost of financing the Baltimore Convention Center's $150 million expansion.

An allocation of highway money will go toward financing the expansion, which will double the convention center's size.

The compromise caps the city hotel tax at 7.5 percent for the coming year and averts a city plan to increase the tariff to 9.9 percent to pay for the expansion.

Including the state's 5 percent sales tax, the increase planned by Mr. Schmoke would have raised the tariff on a night in a Baltimore hotel to the highest on the East Coast and, critics warned, devastated the city's $1 billion-a-year convention and tourism industry.

The move drew praise from hoteliers, business leaders and the BACVA's president-elect, Carroll Armstrong, a former San Diego Convention Center executive who starts work here later this month.

For years, the agency's leaders have pleaded for more money, saying they struggle to compete with counterparts in other cities that spend two to three times as much. But Mr. Schmoke has slashed the agency's budget by about 20 percent in the past few years, while competitors increased spending.

"This is terrific news. It gives us the opportunity to get out there and do what needs to be done because we are way behind in the game," Mr. Armstrong said. "The infusion of these additional funds will allow us to get out there and make an impact in promoting the city and the destination."

House Speaker Casper R. Taylor Jr., who has repeatedly stressed the need to spend more to market the center, called the compromise an emergency, short-term plan to keep Baltimore and the Convention Center competitive.

"This is a one-year Band-Aid, but it's a very good Band-Aid because it'll keep the hotels competitive and it will begin the very, very necessary job of marketing downtown Baltimore and the Convention Center."

Lawmakers said they plan to work with Mr. Glendening, Mr. Schmoke and tourism officials to devise a long-term solution later.

Pointing out the huge public investment in the expansion -- $100 million from the city -- Mr. Taylor and many other lawmakers said inadequate marketing endangered that investment.

Already, bookings for major conventions, generally reserved three to five years in advance, are dismal for 1999 and 2000, well below current bookings, despite the expansion. Without more aggressive marketing, lawmakers said, the center would never reach its promise of generating more than $15 million in additional annual tax revenue and creating more than 6,000 jobs.

The plan approved last night followed several failed efforts to increase funding for the agency by increasing taxes on meals and other purchases. Last week, during the weekend and through last night, lobbyists representing hotels, restaurants and licensed beveraged dealers maintained a nearly constant vigil at the State House and in legislative offices to push for more funding without the huge tax increase Mr. Schmoke had sought.

Last night, a jubilant Mary Jo McCulloch, executive director of the Maryland Hotel & Motel Association, said she viewed the compromise as fair and necessary.

"They did a wonderful job in crafting a compromise that keeps the city whole," Ms. McCulloch said. "Everybody wins. I don't think this [tax increase] will hurt Convention Center business," she said, noting that Baltimore's rate will still be lower than competitors such as Philadelphia.

Pub Date: 4/09/96

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