Public funds for hotel might shrink Wyndham developers reportedly amenable to $20 million cut

'We can be flexible'

Bond to help pay for parking garage could be dropped

December 06, 1997|By Robert Guy Matthews | Robert Guy Matthews,SUN STAFF

Developers of the proposed Wyndham Hotel appear ready to reduce their dependence on public subsidies by as much as $20 million to build the controversial project at Baltimore's Inner Harbor East.

Top negotiators involved in the hotel deal said they are looking to eliminate the need for a $20 million parking revenue bond to supplement the construction of the $133 million hotel development. If they succeed, the public subsidy would drop to $30 million from about $50 million.

"We are looking at [the parking revenue bond] as well as other options to fund the parking," Michael Beatty, vice president for development for baking executive John Paterakis' H&S Properties Inc., which proposed the hotel, said yesterday. "The components of the financial structure can change; we can be flexible on certain things."

The city's chief negotiator on the hotel project, M. J. "Jay" Brodie, president of the Baltimore Development Corp., confirmed that the developers are looking at private contractors to build the hotel.

"The exploration of various ways to fund the garage has been going on for several months," Brodie said. No decision has been made, he said.

The news that developers are willing to consider a reduced public subsidy comes days after some members of the City Council threatened to try to hold up construction of the hotel if the developers proceeded with their original plan to ask the city to provide nearly $50 million in a combination of city loans, grants and the parking revenue bond.

The developers are searching for a private contractor to build the planned 600-space garage.

Preliminary projections from developers sought $20 million in tax breaks and $10 million in city loans and grants, in addition to the $20 million parking bond. A final financing package, which is being negotiated by the developers and Mayor Kurt L. Schmoke, is expected to reach the council by early February.

Council leaders want all of the public portion of the hotel's financing to come from property tax breaks.

Schmoke said Thursday that he couldn't see how the financing package could be completed without the $20 million parking revenue bond and held out hope that the council would be willing to compromise.

Council members and chairs of key council committees who will oversee approval of the hotel construction, including Martin O'Malley, Lois Garey and President Lawrence A. Bell III, required that the financing package not use city loans, grants or parking revenue bonds.

O'Malley, who chairs the Taxation and Finance Committee, is blocking a Schmoke administration bill that calls for raising the city's parking revenue bond limit from $150 million to $225 million. The administration wants the limit raised so that the money can be used to pay for the hotel garage.

The developers would rather have the public subsidy than to have to find a private contractor to build the garage. But, because of council protests about the hotel's dependence on public subsidies, the developers are looking for other ways so that the deal can be approved quickly.

Schmoke has said that he wants the hotel to be completed by early 2000.

Thursday, to compromise with detractors who want a far smaller hotel, the council passed legislation to reduce the height of the proposed hotel to 41 stories from 48.

Pub Date: 12/06/97

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