Inner Harbor East hotel plan gains Paterakis' proposal gets a key city nod

mayor liked location

February 22, 1997|By Gary Gately and JoAnna Daemmrich | Gary Gately and JoAnna Daemmrich,SUN STAFF

A Baltimore developer's proposal to build a 27-story, 900-room hotel complex east of the Inner Harbor -- with tens of millions of dollars in government assistance -- has received a crucial nod from the city's economic development agency.

Baltimore Development Corp. chose the proposal from H&S Properties Inc., a company owned by the politically connected baking mogul John Paterakis Sr., over two competitors seeking to build downtown mega-hotels.

The BDC board's unanimous recommendation now goes to Mayor Kurt L. Schmoke, who is said to generally favor the $112.2 jTC million Paterakis project over the other two that came in response to a city request for proposals: one for an 800-room Westin on the site of the former News American, another for an unidentified 800-room hotel a few blocks east on Pratt Street.

Neither Paterakis nor Schmoke, who was out of town last night, could be reached for comment.

BDC is expected to attempt to put together a package of aid for the chosen developer likely to include a mix of direct grants, subsidies, tax breaks or low-interest loans from the city and state.

Lynnette Young, Schmoke's chief of staff, said the mayor believes that the proposed Inner Harbor East hotel complex, along with a 1,000-space parking garage, is critical to the long-standing effort to revitalize areas beyond the harbor basin.

She also noted that the proposed hotel, whose operator has yet to be selected, sits in the federal empowerment zone, a $100 million project under way to revive Baltimore's poorest neighborhoods.

The mayor was influenced by both factors as he tried to envision the best place for a mega-hotel, Young said.

"It speaks to our commitment to the empowerment zone," Young said, adding that the hotel would create jobs where they are critically needed.

"You would get a domino effect, building up the area. It reaffirms not only the city's commitment to the empowerment zone, but businesses' commitment to the empowerment zone."

Carroll R. Armstrong, president of the Baltimore Area Convention and Visitors Association, welcomed the prospect of a hotel in the growing area east of the harbor and said it would help spread the tourism and entertainment district fanning out from the harbor.

"This should serve as a bridge and catalyst for that whole Inner Harbor East area, and, from that perspective, it's great for Baltimore, great for downtown," said Armstrong, who also served on the BDC's hotel evaluating committee.

But like many others, Armstrong stressed that the Baltimore Convention Center, nearing completion of a $151 million expansion, desperately needs a major hotel nearby.

Some skeptics worry that the new hotel will be too far from the Children's Museum, National Aquarium, Power Plant mall and other downtown attractions. But Young said she doesn't consider the proposed location too far away, though she cautioned that the administration wants to work out plans for transportation to all the cultural and night life activities.

"I don't think distance is going to be a problem," she said. "If you visit other cities, you see the hotels are spread all over the place."

BDC's recommendation came after two months of review and sometimes-fractious debate among members of an appointed evaluation team, the agency's staff and its 11-member governing board.

Ultimately, sources said, the board rejected the recommendation BDC's staff.

Like many tourism industry and downtown business leaders, the agency's staff had recommended New York-based Schulweis Realty Co. Inc.'s plan to build a 44-story, $173 million Westin Hotel on the former News American site it controls at 300 E. Pratt St.

Schulweis said last night that he had "serious doubts" he would consider building a hotel on the News American site without city and state aid.

Told of the recommendation, he said, "I could not be more disappointed. It should have been an open-and-shut case."

In its request for proposals, BDC said it would judge each by how well it answers the need for rooms, particularly for conventioneers, its projected economic impact and the amount of public assistance required.

But the deliberations were shrouded in secrecy, and BDC President M. Jay Brodie attempted to put a gag order on all participants for two months.

He declined to release the proposals and the amount of financial aid sought, and he banned the press and public from any and all deliberations.

"This is an important decision, and we want to make sure to avoid any misunderstanding," he explained, defending the attempt to review the proposals in a vacuum devoid of public scrutiny.

Brodie declined to comment last night.

Pub Date: 2/22/97

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