Another hotel plan arrives at Pratt St. Philadelphia firm to develop BCCC site

June 05, 1998|By Greg Schneider | Greg Schneider,SUN STAFF Sun staff writer Kevin L. McQuaid contributed to this article.

Another hotel may be on the way for the Inner Harbor.

Baltimore City Community College announced yesterday its selection of Kravco Co., a Philadelphia-area shopping center developer, and several partners to build an $88 million complex of offices, shops, hotel rooms and parking spaces on one of the tourist district's last big open parcels.

The college-owned 2.8-acre site at 500 E. Pratt St. -- a prime spot across from the National Aquarium and the Power Plant -- now contains only the cracked asphalt of a parking lot and the aging Lockwood building of BCCC's Harbor Campus.

Lockwood Associates, the team led by Kravco, one of the nation's biggest retail developers, beat out two competitors more familiar to the local market. Baltimore-based Cordish Co., which is developing the Power Plant, submitted a $100 million-plus proposal that emphasized high-end shopping. Connecticut-based PDL Investment Co., which owns the Inner Harbor Center next to the BCCC site, offered a plan that focused on office space at a cost of more than $120 million.

The college's board of directors decided that Kravco's middle-of-the-road mix of uses was more appealing: a 12-story, 200,000-square-foot office building linked to 100,000 square feet of mid-range shopping. Adjoining those on the Lombard Street side of the Lockwood site would be a seven-story parking garage topped by a 200-room hotel aimed at the under- $100-a-night family market.

"The diversity of this proposal was very appealing to the board," college President James D. Tschechtelin said yesterday.

The fact that the proposal includes the fourth new hotel planned for the Inner Harbor initially raised fears of a market glut, Tschechtelin said. "If you just see that five-letter word 'hotel,' you're petrified," he said. "But with the niche nature [of this one], combined with the location, the board was convinced it was very plausible."

'Great hotel town'

Baltimore lawyer Peter G. Angelos, who plans to build a Grand Hyatt hotel near the Convention Center, agreed that the modest nature of BCCC's project means it won't be in competition with the big entries.

"It's hardly a threat," he said. "If anything, they probably hope to -- gain business from the presence of the Grand Hyatt Hotel. It seems there is a consensus that Baltimore's a great hotel town."

Kravco, based in King of Prussia, Pa., will focus on the retail part of the development, and Baltimore's A&R Development Corp. will handle the office tower. Switzenbaum/Pace Associates of Philadelphia is responsible for the hotel component, and Parkway Corp., also of Philadelphia, will handle parking.

The two rejected developers were displeased by the choice.

David S. Cordish, chairman of the Cordish Co., pointed out that the college, a state institution, was looking to get at least as much revenue out of the project as it gets from the parking lot currently on the site. BCCC clears about $750,000 a year from the 240-space lot and said it wants at least $1.1 million a year from whatever replaces it.

"They are required to maximize returns on the property. Our bid said, in writing, that we would pay 10 percent more than the highest bid they received, and they chose to select someone else," Cordish said.

Tschechtelin countered that revenue was only one of many considerations and that Kravco was committed to providing at least $1.1 million a year, equivalent to about 10 percent of expected operating income. Cordish might have offered more money, he said, but that advantage was outweighed by other factors.

For instance, Kravco's group showed a "greater commitment" than either of its competitors to striking up an educational relationship with the college, Tschechtelin said. The group promised to support internships, to supply executives as

classroom lecturers and to create employment opportunities for students.

Peter D. Leibowits, president of PDL Investment, said his firm was "totally shocked" by the choice. PDL had lined up tenants for almost all of one of its two proposed towers, including Piper & Marbury, the state's largest law firm.

Kravco's group has lined up no tenants for its office building but persuaded the college that 200,000 square feet of Class A office space with views of the Inner Harbor "is just not going to be a difficult thing to lease," Tschechtelin said.

There were other issues, he said, adding that "Leibowits [offered] very different land use -- really a corporate plaza, with very little retail on it." The college liked Kravco's proposal for including "lifestyle" retailers such as J. Crew, Pottery Barn and Virgin Records, though no such tenant has committed to a lease.

Unanimous decision

The college's board of directors was unanimous in its choice of the Kravco team, based on the unanimous recommendation of a project committee.

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