Luxury harbor hotel sought

Ritz-Carlton heads list of firms touted for site at foot of Federal Hill

February 16, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Call it the Ritz-Carlton South Baltimore.

In what would be the sixth major hotel planned downtown, a Florida real estate developer is in negotiations to build a "five star" luxury hotel on the south side of the Inner Harbor, on land adjacent to the Rusty Scupper restaurant.

Developer Neil Fisher said he has been discussing the $80 million project with several luxury hotel chains, but the Ritz-Carlton Hotel Co. of Atlanta appears to top the list.

"We're discussing the project with Ritz-Carlton," said Fisher, chief executive of North American Doctors Investment Fund Inc. "I think it would be a good fit with the harbor, and we believe we have a site that is second to none."

Unlike the other projects, the Ritz-Carlton would be a midrise hotel that would be more horizontal than vertical on a site at the foot of historic Federal Hill once owned by Bethlehem Steel Co.

The other more vertical hotel projects include the 31-story Wyndham, the 28-story Westin, the 22-story Grand Hyatt and the 34-story office and hotel tower known as One Light Street. All are in the proposal stage or under construction.

The five-star hotel Fisher is proposing would likely contain 300 to 350 rooms, with construction possibly starting by the end of the year, he said. Such a hotel would employ about 500 full- or part-time workers.

The 300 rooms would bring to nearly 3,000 the number of new rooms on the drawing board downtown, from the Wyndham Inner Harbor East to the One Light Street tower.

A 1996 study commissioned by the mayor estimated that 1,000 new rooms were optimal for the Baltimore market, which now has 4,479 rooms.

With Ritz-Carlton -- or another luxury chain such as Regency Hotels or Four Seasons -- the city would attract a hotel with a reputation for quality matched locally only by the 203-room Harbor Court Hotel, at 550 Light St. across from Harborplace.

"We are definitely looking at opportunities in Baltimore," said Stephanie Platt, a Ritz-Carlton spokeswoman. "It's in the preliminary stage, but we consider that a very important market for us."

Marriott International Inc. of Bethesda acquired Ritz-Carlton between 1995 and 1998 for $290 million. Platt said the Ritz-Carlton hopes to increase the number of hotels that carry its flag from 36 to about 70 by 2004. The chain now controls 11,640 rooms.

A Baltimore Ritz-Carlton would become the fourth in the region. In addition to two in Northern Virginia, the 16-year-old company is constructing a 300-room hotel in Washington as part of a $225 million complex containing condominiums, retail space and a large health club at 2200 M St., N.W. The opening is expected late next year, Platt said.

The Fisher hotel would differ from some of the other hotel projects in that it appears to have financing in place. Although Fisher declined to reveal the financing source, he said it is a "major insurance company."

Like the proposed 600-room Westin at 300 E. Pratt St., Fisher's proposal would seek no public subsidies.

Both the Wyndham and the Grand Hyatt are expected to receive more than $50 million in tax breaks and other financial incentives that developers said are needed to bridge the gap between development costs and what can be charged in room rates.

Also seeking tax breaks are the $120 million One Light Street tower and Lockwood Place, a development at Baltimore City Community College, which is to include a 278-room hotel,

"We've indicated to them that we are only going to make a public investment in the Wyndham and assist with the [negotiated property tax payments] for the Grand Hyatt," said Mayor Kurt L. Schmoke, in an interview yesterday.

"I told the Ritz-Carlton folks that if they want to build on private property and can make it a successful and profitable venture, then we encourage that. I think it indicates that the private sector recognizes that the area needs more hotel rooms."

Schmoke said he has heard complaints about a lack of five-star accommodations downtown.

Fisher says a Ritz-Carlton or another luxury hotel would appeal to a different market than the other projects. A five-star hotel has top-of-the-line rooms, service and amenities such as fine dining. The Westin, Grand Hyatt and Wyndham chains are usually labeled as four-star hotels.

To ease development costs, Fisher said he would build luxury condominiums along with the hotel, even though condominiums in the 27-story tower at nearby HarborView suffered from disappointing sales. The tower is nearly full now, primarily as upscale rental apartments.

Fisher said he believes the condominiums there failed because of the economic recession earlier this decade and not because of a lack of interest.

"It's a limited market, admittedly, but there will always be an interest among CEO types to have a place on the water," he said. "And that will drive the hotel's costs down to a level where I can compete more effectively."

Fisher, whose group intends to purchase about five acres of Inner Harbor land from HarborView Properties Development Co. for more than $1 million, said he won't commit to the project until after meeting with Federal Hill residents to hear their opinions.

"I have to meet with the neighborhood," said Fisher, who is developing Ritz-Carlton projects in Miami and Coconut Grove, Fla. "If they don't want it, I will walk away, because we've found that in the last two projects we've done that if they aren't behind you, it can't happen effectively."

Sun staff writer Joe Mathews contributed to this article.

Pub Date: 2/16/99

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