$20 million question Wyndham Hotel: City Hall offered subsidies Paterakis developers did not even ask for.

December 15, 1997

WHEN DEVELOPERS of the Inner Harbor East Wyndham Hotel recently expressed their willingness to give up $20 million in taxpayer-backed bonds, they said they were being flexible and bowing to the City Council's wishes.

What the politically connected developers did not say was that the $20 million subsidy was money they had not originally expected to get. It was added last summer to a yet-incomplete aid package by the Baltimore Development Corp., the Schmoke administration's economic development arm.

This revelation raises questions about the way the BDC has been bargaining with developers headed by John Paterakis, the bakery tycoon who is a long-time financial contributor to Mayor Kurt L. Schmoke and several City Council members. Those questions may have legitimate answers, but they cannot be established because the BDC is still in financial negotiations with the Paterakis group and refuses to disclose pertinent information.

"I am startled, I don't think that's true," BDC President M. J. Brodie said after The Sun called his attention to the absence of any parking revenue bonds from "public investment assumptions" the Wyndham developers submitted to his agency June 17. Their memo outlined total expected subsidies of $32.2 million; there was no mention of parking revenue bonds.

Yet by July 18, when the Paterakis interests signed a development agreement with the city Board of Estimates, "not less than" $19.6 million in parking revenue bonds had been added to the aid package that totaled over $51 million of the hotel's projected $132.6 million cost.

Mr. Brodie, who said he thought the parking revenue bonds had "been there from the beginning," explained the aid was needed to "make the garage numbers work." Asked how those numbers would work, if the developers now seemed willing to forgo the bonds, Mr. Brodie said he did not know that they would. "All of that is still on the table," he said.

The situation underscores the haphazard way in which the Schmoke administration is seeking to build the 41-story hotel that would be the city's second tallest skyscraper.

The process has been chaotic from the beginning. Of three rival proposals, the Inner Harbor East Wyndham was not the one recommended by BDC staff because the location is nearly a mile from the city's underutilized Convention Center. The agency's board, however, overruled the staff in a vote in which only four of nine board members participated. The rest recused themselves.

Because Mayor Schmoke is a strong supporter of the hotel, the project has been on a fast track. For example, the city already has spent more than $100,000 in engineering work, which was not specifically approved by the Board of Estimates.

The City Council is scheduled to give final approval to two bills today that would bring the hotel closer to reality, even though members lack crucial information. Unless they want to give the store away, we urge council members to postpone their action.

Pub Date: 12/15/97

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