Hotel tax break OK'd City Council approves 25-year waiver for Inner Harbor East site

Wyndham 'to provide jobs'

Opponents cite loss of millions of dollars needed for city's ills

April 07, 1998|By Gerard Shields | Gerard Shields,SUN STAFF

Brushing aside criticism of an unfair tax break, the Baltimore City Council cleared the way last night for construction of a controversial Inner Harbor East hotel by freeing developers from paying city property taxes for the next 25 years.

The 14-4 vote should allow the builders of the Wyndham Inner Harbor East Hotel, including Baltimore bakery magnate John Paterakis Sr., to break ground on the 31-story, $134 million project by the end of June.

As about two dozen opponents of the project chanted, "Wyndham no, children yes," council supporters listed new jobs, expansion of the tourism industry and other new tax income for the city as reasons to favor the 750-room hotel to be located on the waterfront near the intersection of President and Lancaster streets.

"It's going to provide jobs," said Councilwoman Sheila Dixon of the 4th District before casting a supporting vote. "It may not provide the jobs that Bethlehem Steel provided, but it's going to provide substantial opportunities."

The council will take a final vote next week on the bill, but it is consider perfunctory. Last night's overwhelming support showed that the project has little chance of being derailed.

The tax breaks are estimated to save the developers, H&S Properties Inc., about $25 million over the next 25 years. But Councilman John L. Cain of the 1st District, who voted against the project, said the action taken by his colleagues will save the hotel owners about $74 million in property taxes ranging from $1 million to $4 million a year by the end of the quarter-century period.

Tax money from the hotel is needed to help the city's ailing libraries, playgrounds and school system, Cain said. "It's tortured the people of the city in the grandeur of the handout."

Cain was joined in opposition by Lois A. Garey and Nicholas C. D'Adamo Jr., the other members of the 1st District -- where the hotel will sit. Also voting against the deal was 5th District Councilwoman Stephanie C. Rawlings, whose father, Del. Howard P. Rawlings, a Baltimore Democrat, failed in his attempt in the legislature to force a referendum on the project.

Before conducting the Wyndham vote, the council approved enabling legislation that will allow a second hotel -- an 850-room Grand Hyatt proposed by Baltimore Orioles owner Peter G. Angelos -- to be built adjacent to the Baltimore Convention Center. The 22-story, $150 million project is expected to receive a 20-year waiver on city taxes worth an estimated $17 million.

Council members supporting the subsidies said the the legislation should not be called a tax break. Because the projects are not already built, the city is not giving up property tax money already being levied, they said.

Council supporters said the Wyndham is expected to bring in about $3.3 million in additional city revenue through room taxes, income taxes and parking.

"There aren't a whole lot of industries bringing money into our city," said Councilman Martin O'Malley of the 3rd District. "Tourism is one of them."

In addition to the tax waiver, the Wyndham will get a $5 million loan from the city, a $5 million city grant and a training grant of $500,000 because the hotel is being built in an empowerment zone established by the city.

The Wyndham backers estimate that the hotel will create 1,000 jobs, including 760 at the hotel. About 2,400 construction workers are expected to be needed for the project. Mayor Kurt L. Schmoke has supported the project as an eastward extension of Inner Harbor development, despite criticism of building the hotel one mile east of the convention center.

Opponents of the Wyndham project were out in force yesterday trying to muster opposition, giving out leaflets at the Broadway Market in Fells Point and marching on City Hall just before the council meeting.

The chief gripe of many residents who will be staring at the hotel looming over their neighborhood was that the project broke a regional development plan established by the city in consultation with the neighborhoods 10 years ago.

"We weren't as much objecting to the public financing," said Steve Bunker, president of the Fells Point Community Organization. "We were objecting to the illegal and arrogant way they went about it."

The Waterfront Coalition residents group announced yesterday that it would appeal the recent dismissal of its lawsuit attempting to block the Wyndham from being built. The lawsuit was tossed out by Circuit Judge Richard T. Rombro, who said the group lacked the legal standing to challenge City Hall procedures in passing legislation to make way for the hotel.

Pub Date: 4/07/98

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