Are taxpayers getting fleeced? Inner Harbor: Developer's willingness to forgo subsidies raises questions about hotel aid.

March 04, 1998

EVER SINCE the Schmoke administration gave the go-ahead to the taxpayer-subsidized Inner Harbor East Wyndham hotel a year ago, rival developer Harvey Schulweis has been acting like a jilted suitor. He has now dropped a bombshell by vowing to construct a 28-story hotel on Pratt Street, directly across from Harborplace, without any public subsidies whatsoever.

Mr. Schulweis says he hopes to start construction of a 600-room Westin hotel and its 200-space underground garage in late summer and complete the project by the fall of 2000.

"The project will be developed entirely with private capital," he wrote Mayor Kurt L. Schmoke, "without public subsidy of any kind, including, without limitation, tax abatements, grants, parking revenue bonds or other public financing."

This pledge comes just days before the City Council is to examine $41 million in public aid, chiefly tax abatements, requested by developers of the Inner Harbor East Wyndham. It raises a fascinating and fundamental question: If Mr. Schulweis can claim to finance a hotel exclusively from private sources, why would the Wyndham -- and a Grand Hyatt proposed by Orioles principal owner Peter G. Angelos -- require so much help from city taxpayers?

This question is made more compelling because of Mr. Schulweis' professional credentials. He not only heads a real estate firm bearing his name but is president of the Town and Country Trust, the Baltimore-based owner and operator of apartment complexes listed on the New York Stock Exchange.

Mr. Schulweis insisted yesterday that the timing of his announcement was purely coincidental and not intended to affect the consideration of any other developer's financing package.

"I'm only focusing on my project. I'm passionate about it," he said. "What the public reaction will be or who cares about it, I don't know. My position is very simple. I own the site; I can build as a matter of right. I don't need any favors from anyone."

Within the past year, Mr. Schulweis' proposals have been scorned twice by the Schmoke administration. The city rejected his hotel plan in favor of the Inner Harbor East Wyndham. The city also turned down his offer to buy the two lots near the Convention Center where Mr. Angelos hopes to build a Grand Hyatt.

Whether driven by pique or business motivations, Mr. Schulweis and the questions his announcement raises should not be ignored. If favorable private financing is so readily available, the developers of the Wyndham -- and the Schmoke administration -- will have to substantiate their claims that the Inner Harbor East hotel needs taxpayer handouts.

Pub Date: 3/04/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.