Future buyer of hotel is big in gambling business

THIS JUST IN ...

December 01, 1997|By DAN RODRICKS

I like to call it Big John Hotel (no definite article) because John Paterakis, the wealthy and politically influential East Baltimore baker, is the point man on this adventure. It's his Inner Harbor East property upon which the Wyndham Hotel will be built, if the City Council signs off this week on about $50 million in taxpayer subsidies. It's his political and personal capital that's being spent on this project, a long silly mile from the Baltimore Convention Center.

But Big John Hotel might be a misnomer because, six months after the hotel's planned opening in 2000, Patriot American Hospitality Inc. will be the full owner.

Paterakis is going to sell out.

This excites conspiracy theorists already inclined to believe that, Paterakis' declarations to the contrary, this lavish hotel at the water's edge is destined to become a casino hotel. My take on that? Never say never in politics. I don't dismiss the possibility.

So, before we go any further, perhaps it would be prudent for members of the Baltimore City Council - assuming they haven't all wimped out by now - to familiarize themselves with the hotel's eventual owner. It's a company that acquires companies that own casinos.

Patriot American Hospitality Inc. is a humongous, international hotel management and real estate investment company based in Dallas. It went public in 1995. Its portfolio includes hotels operating under the Marriott, Doubletree, Hilton, Hyatt and Holiday Inn brands. (Imagine being a major executive or stockholder in a company like this. Not only do you never have to worry about finding a hotel room, but I bet you never get caught walking barefoot in a hallway with a plastic ice bucket, either.)

In April, Patriot American got even bigger. It agreed to buy Wyndham Hotel Corp. and 11 Wyndham hotels owned by related partnerships for about $1.1 billion.

Wait! There's more!

Just this fall, Patriot American agreed to buy the hotel assets of Carnival Hotels & Casinos and its affiliate, Gencom American Hospitality, for $485 million in stock and cash.

Carnival Hotels & Casinos is one of the largest hotel and casino management and development companies in North America. Its gambling division runs the Casino Rouge riverboat in Louisiana, two Caribbean casinos, a casino in Peru and casino operations aboard Carnival cruise ships. One of its current projects is a Native American casino and entertainment center in eastern Massachusetts. The company continues to pursue gambling licenses as opportunities arise in various states. Carnival's affiliate, Gencom, is a Houston-based hotel-management company. Its holdings include the twin-towered Omni Inner Harbor Hotel in Baltimore, which it acquired last year for $25 million.

Most interesting of all is Patriot American's recent acquisition of WHG Resorts & Casinos for $148 million in stock. WHG, through subsidiaries, owns an interest in three highly profitable casinos in Puerto Rico - the Condado Plaza, the El San Juan and the El Conquistador. That translates into nearly 40,000 square feet in gambling floor space, 120 gaming tables and 940 slot machines.

This has been another FYI from TJI.

Setting an example

Did you happen to notice that the head of Yamaichi, the Japanese brokerage that shut down the other day, actually broke into tears, said he was sorry about the company's failure and asked executives of other firms to hire his workers? I'm trying to imagine American CEOs or bank executives showing a sense of shame when they make a complete mess of things for their workers and customers. And it's not easy.

Mayor's short on words

The mayor of Baltimore came up with this the other day: "I think some would say Mrs. [Ellen] Sauerbrey is diving deep for her pearls." That was the mayor's way of knocking the Republican gubernatorial candidate for trying to connect the governor of Maryland to the student discipline crisis at Northern High School in Baltimore. Of course, Sauerbrey also put the hammer on the mayor, which is less of a stretch. But the mayor didn't have anything clever to say in rebuttal. In fact, the mayor hasn't had much to say about the Northern High problem since it erupted with mass student suspensions Nov. 19. All he says is that elected officials - such as himself, I guess - should keep their hands off and let the city's newly restructured school board and its chief executive officer handle matters. That's not high-mindedness; that's a cop-out.

Correction

A Baltimore County purveyor of turkeys was misidentified in Friday's TJI column. R&L Hay and Straw is the correct name of the company. It is located in Reisterstown.

Contact Dan Rodricks at TJIDAN aol.com; by post at 501 N. Calvert St., Baltimore 21278; or by voice mail at 410-332-6166.

Pub Date: 12/01/97

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