June 30, 1997|By Gary Gately | Gary Gately,SUN STAFF
The vexing, twisted saga of selecting a heavily subsidized hotel for downtown Baltimore reaches a crossroads today when the city is expected to decide whether to move forward with the proposed 750-room Wyndham south of Little Italy.
The outcome of three months' negotiating with the team assembled by baking mogul John Paterakis Sr. is eagerly and anxiously awaited by a wide range of interests: downtown business leaders, city and state lawmakers, heads of every major tourist attraction, hoteliers, the city's convention bureau and those who book gatherings in the nation's fiercely competitive meetings industry.
A mile from the expanded Baltimore Convention Center, the Wyndham, which seeks $42 million in public financing, is viewed by many as the least likely among proposed hotels to succeed as a public investment and, particularly, as a hotel to provide desperately needed rooms for conventioneers.
With bookings sagging badly and the city losing lucrative business to competitors, many believe the lack of a convention headquarters hotel threatens to turn the $151 million convention center expansion into a colossal, publicly financed failure.
Mayor Kurt L. Schmoke, who drew harsh criticism when he chose the $112 million Inner Harbor East project in late February, said last week that he believes the Wyndham will meet the eight conditions set by the city's economic development agency, Baltimore Development Corp. Conditions included parking, design, selection of an operator and financing.
Meantime, Schmoke said, the city plans to formally request proposals this week for the city-owned Camden Yards site, with a 45- or 60-day deadline for developers to send plans.
A partnership led by Orioles owner Peter G. Angelos and Hyatt Hotels Corp. has proposed a publicly subsidized 850-room hotel on the city-owned lots connected by covered walkway to the convention center.
But the mayor said construction of the two hotels would have to be staggered to avoid glutting the market.
"We'd have to decide, you know, what, if any, investment [in a hotel at Camden Yards] the city would make and then a timetable," he said.
"It's pretty clear that we don't want these two, if we do a second, to be constructed at the same time. We want one to come on line and then, in a reasonable period of time thereafter, bring another one on line."
He would not say what constituted "reasonable" but repeated his assertion that downtown could sustain two huge hotels by 2002.
However the BDC board votes, the Wyndham would still need state approval for a low-interest loan and for bonds to be paid with taxes generated by the project, as well as City Council approval for major amendments to the Inner Harbor East master plan and for parking revenue bonds.
The Grand Hyatt team, meantime, says it is prepared to move forward, provided the city grants the four-acre parking lots, as expected.
"What I can certainly say is that our commitment to proceed with the Grand Hyatt is really independent of what happens on the other side of town," said Douglas Geoga, president of Hyatt Hotels Corp.
"It's in the best interest of the city, the best interest of the convention center and the best interest of everybody concerned that the Grand Hyatt proceed at the first possible moment, and we are ready to go at the first possible moment the pieces are in place."
Further complicating matters, the team that wants to build a 44-story Westin on the site of the former News American on Pratt Street launched an 11th-hour bid to keep its proposal alive.
In a letter to Schmoke and key state lawmakers, Harvey Schulweis, who leads Schulweis Realty Inc., and Fred Kleisner, the Westin president, said the team would be willing to substantially reduce requested public subsidies -- to an amount much less than Wyndham or Grand Hyatt. The Westin team also said its $173 million hotel would generate at least as much convention center business as the Grand Hyatt or another hotel at the Camden Yards site -- a claim many legislators and a city-commissioned study have questioned.
The letter, citing figures from a city-commissioned hotel demand study by now-defunct Legg Mason Realty Group Inc., noted that no hotel is expected to generate more than 50 percent of its business from the convention trade.
"The success of a hotel and its impact on Baltimore will depend on its ability to attract new non-convention-related business to Baltimore," the letter said, suggesting the Hyatt site would be forced to offer deep discounts to keep occupancy up.
But the letter did not mention another key figure in the Legg Mason study: that a hotel at Inner Harbor East or the News American site would generate only about 10 percent of its business from conventioneers.
Schulweis noted that the BDC staff and business leaders had overwhelmingly favored the Westin in the first round of hotel proposals. But many of them now say they back the Grand Hyatt, which did not submit its unsolicited proposal until after selection of the Inner Harbor East site.
Schmoke said he had not read the Westin team's letter but would consider the Schulweis bid if the Wyndham team failed to meet city-established conditions.
Pub Date: 6/28/97
