Wyndham tax break challenged in court Hotel's foes question city's authority to grant exemption

Lodging

September 26, 1998|By June Arney | June Arney,SUN STAFF

Residents battling construction of the Wyndham Inner Harbor East Hotel headed back to the courtroom yesterday with their third lawsuit, this one challenging the legality of the hotel's tax exemption.

Judge Richard T. Rombro took the matter under advisement, after about two hours of arguments.

At issue is whether the city had the authority to grant a tax exemption under which the Wyndham is to pay $1 a year for 25 years -- an agreement that hotel opponents say amounts to about $85.6 million in lost property taxes over 25 years.

The city used a provision authorizing an exemption from a bond vote for city-owned property, which coalition members say is "nothing more than paper ownership to qualify for tax exemption."

"Does the city of Baltimore own this property?" asked John C. Murphy, the attorney representing the residents, who are members of the Waterfront Coalition. "I say that it does not. The city doesn't own the property if the developer can get it back by snapping his fingers."

But Stephen A. Goldberg, an attorney representing the hotel developers, argued that the code grants the city the right to make such exemptions and that the lawsuit asks the judicial system to second-guess the legislature.

"It is the judgment of the mayor and City Council that this $H property is better served by being granted a PILOT [payment in lieu of taxes]," he said.

The city also gets 10 percent of any return the hotel generates once the investors have received 15 percent, under the terms of the agreement.

A similar arrangement with the Hyatt on Light Street generates about $2 million a year.

Hotel opponents also await a ruling on an appeal of their first lawsuit, which asked that the zoning approval be declared invalid.

Coalition members also have been granted a December hearing for an appeal of their second lawsuit, which sought to set aside the amendment of the Inner Harbor East Master Plan. In a decision issued last month, Rombro ruled that the city had not violated its development plan when it approved the hotel.

A ceremonial groundbreaking was held in June for the 750-room Wyndham, a project being led by Baltimore businessman John Paterakis Sr. Wyndham officials have said the lawsuits have not caused delays in the project, which is slated for completion in September 2000.

Pub Date: 9/26/98

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