Historic hotel sold for about $30 million Lord Baltimore to become Hilton Hotel & Towers

January 31, 1997|By Gary Gately | Gary Gately,SUN STAFF

The Lord Baltimore, the historic hotel that went from fashionable downtown destination to bankruptcy and back again, yesterday became the Baltimore Hilton & Towers after a Memphis, Tenn., hotel company teamed with an investors group to purchase the hotel.

Prudential Real Estate Investors and Memphis-based Davidson Hotel Co. bought the 68-year-old hotel from Universal Equities Group Ltd., a Washington-based investment group that had owned it since 1992.

Sources said the joint venture paid $28 million to $30 million for the 419-room hotel -- more than triple the $8.5 million Universal paid for it less than five years ago. The deal is seen as a reflection of a dramatic rebound and renewed confidence in the city hotel market.

With yesterday's purchase, Davidson, the new operator, immediately converted the 23-story West Baltimore Street hotel from a Radisson Plaza to a Baltimore Hilton & Towers franchise. It marks the return of the Hilton name to downtown Baltimore for the first time since the old Hilton became the Omni International in 1984.

Despite the Lord Baltimore's repeated struggles, including two bankruptcies during the past two decades, Hilton and the leaders of the joint venture said they were confident the hotel would prove a solid investment.

They pointed to the nearly complete $151 million renovation and expansion of the Baltimore Convention Center and more than a half-billion dollars' worth of other coming attractions, and said the Hilton name and the hotel's history will form a potent combination.

"We will definitely draw the business traveler and the leisure traveler alike back into this hotel," said John Coffay, Davidson's fTC new general manager for the hotel.

"The hotel maintains the grandeur reminiscent of the famous classic hotels of the 1920s, and the connotation is there [that] when we say 'Hilton & Towers,' we're talking upper-end accommodation."

Coffay noted that the hotel underwent a major renovation last year, the latest of several. The lobby has been restored to show off its sculptured ceiling, wood paneling, polished brass and marble staircase.

In the coming weeks, at least $4 million of new renovations will begin, to be completed in stages through 1998, he said.

By marketing the hotel in conjunction with the nearby 707-room Omni, Coffay said, the two hotels could offer large conventions more than 1,000 rooms and 50,000 square feet of meeting space.

Except for predictable changes in some management positions, none of the 300 staff members at the hotel will be replaced, he said.

The Lord Baltimore -- which includes a restaurant, 21,000 square feet of meeting space and an indoor fitness center and whirlpool -- has enjoyed a modest rebound, with occupancy rates hovering above 65 percent. Its new operators say they expect that figure to climb well into the 70s, healthy by any standards, with room rates starting at more than $100 a night.

Hilton, too, overflowed with confidence over its newest franchise. Dieter H. Huckestein, president of the Hilton Hotels Corp. hotel division, said the deal "reflects our commitment to placing the Hilton brand in locations where the market demand is strong." In a statement, he added: "This property is significant to our hotel growth plan as we progress toward the 21st century."

Hilton officials said the chain's newest franchise addition would have no bearing on a proposal to build a 750-room Hilton in Inner Harbor East.

The Lord Baltimore suffered as the center of activity downtown shifted toward the harbor, and the infusion of $7 million in city money failed to rescue it. The Federal Deposit Insurance Corp acquired the hotel in early 1991 for about $7 million, after the former owner defaulted on a $22 million loan.

With the hotel market rebounding and a host of new tourism-related developments coming, the hotel's owners want to help spread the momentum.

"We're extremely excited about what's going on down in the Inner Harbor and in downtown Baltimore," said David Bradford, managing director of the Prudential investment group.

"We see a wonderful combination of private investment and a city committed to revitalizing the area."

Prudential Real Estate Investors manages more than $7 billion for more than 400 clients.

Davidson owns and manages more than two dozen hotels, including the the 392-room Marriott Hunt Valley Inn it acquired in July 1995 for $12.3 million.

Pub Date: 1/31/97

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