Little risk, big windfall What about taxpayers? City-subsidized hotel backed by Paterakis would reap quick profits for local investors.

November 30, 1997

WITH LITTLE risk or money of their own, an investment group headed by bakery mogul John Paterakis stands to reap a quick windfall if the City Council this week approves construction of the taxpayer-subsidized $132.6 million Inner Harbor East Wyndham Hotel.

Despite vocal community opposition, most council members appear ready to vote for the hotel being pushed by Mayor Kurt L. Schmoke.

They ought to think again before approving this questionable undertaking.

Council members acknowledge they know less about the deal than they should. Among crucial details still to be worked out are the hotel's ultimate price tag as well as its financing and architectural design, including height. How can any responsible council member vote without first having such essential information?

Yet when the council meets Thursday, members plan to put this project on the fast track with tentative approval of a sweeping bill that would remove them from active oversight of the hotel project. Another bill giving developers carte blanche is slated for preliminary approval Dec. 8. Final action is anticipated Dec. 15.

This is a highly irresponsible approach to public policy. Voters should remember how their council representatives voted when

re-election time comes in 1999. We certainly will.

To the investment group headed by Mr. Paterakis, a generous political donor to Mayor Schmoke and council members, the publicly subsidized hotel promises a windfall.

Even before the project gains council approval, developers have a commitment to sell the finished hotel to Patriot American, the country's largest real estate investment trust.

No price has been announced. But by acquiring the Wyndham, the rapidly expanding Patriot would become a dominant operator in the Baltimore market. It recently purchased the 707-room Omni, the largest downtown hotel.

Without hefty taxpayer subsidies, though, the lucrative hotel deal might not take place.

The developers' own cash outlay is only about $8 million -- plus land owned by Mr. Paterakis valued at roughly $11.5 million. The bulk of the hotel's cost, according to the development contract with the city, would be covered by more than $50 million in taxpayer subsidies and $61.4 million in private lending.

Many worthy causes cry for public aid. But council members who vote for the Wyndham project need to explain why Patriot American, with its growing multi-billion-dollar portfolio of hotels and casinos, needs so much help from hard-pressed Baltimore taxpayers.

Pub Date: 11/30/97

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