Harbor Courtyard finally under way

Developer bores holes for Marriott project

207 rooms planned

Hotel industry

April 02, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The developer of a waterfront tract east of the Inner Harbor has begun work on a $21 million Courtyard by Marriott, a long-stalled project that represents the ninth lodging project pending in the effort to add hotel rooms downtown.

H&S Properties Development Co.'s planned 207-room hotel will be part of a $55 million project that includes parking, office space and a Fresh Fields gourmet grocery store. It is expected to be completed by mid-2000.

"This segment of the hotel industry is very under-served in Baltimore," said Michael Beatty, an H&S Properties vice president. "It's a midmarket product that doesn't have a great deal of competition right now."

The Courtyard by Marriott becomes only the second downtown hotel under construction. Earlier this week, workers used a large corkscrew machine to drill holes into the Fleet Street parking lot where the six-story hotel will be located. Work is expected to begin in earnest within the next month.

The only other hotel under construction in the city is a 31-story

Wyndham International that is roughly 200 yards from the Courtyard site that is also being developed by H&S Properties, a group led by entrepreneurial baking mogul John Paterakis Sr. and Stormont Trice Corp. of Atlanta.

Beatty added that plans originally called for the Courtyard and the Wyndham to undergo construction simultaneously, but a lawsuit from a citizens' group and a judge's ruling striking down $75 million in tax breaks for the Wyndham indefinitely stalled -- and some observers believed it had killed -- the Courtyard.

Rooms in the Courtyard by Marriott are expected to rent for roughly $110 per night.

In addition to the hotel, the project is slated to contain 170,000 square feet of office space, a 375-space parking garage and roughly 35,000 square feet of retail space.

It could not be determined if H&S Properties would attempt to obtain "payment in lieu of taxes" incentives for the mixed-use project, but it would qualify, according to guidelines contained in a bill working its way through the state General Assembly in Annapolis.

The Courtyard plan becomes the ninth new hotel to be proposed for downtown. The hospitality projects would add nearly 3,600 rooms, nearly doubling the city's existing inventory.

Analysts contend, however, that not all nine projects will be completed, because the additions would put too much of a strain on the hotel market overall.

"Obviously if all nine get built it would result in a difficult market to operate in," said Rob Koger, president of Molinaro-Koger, a Virginia hotel brokerage and consulting firm. "It's very hard to obtain financing these days, though, so my sense is lenders will restrain several projects."

The other projects include a Westin Hotel, Grand Hyatt, Ritz-Carlton, Comfort Suites, Embassy Suites, Residence Inn and a 278-room hotel proposed for the Baltimore City Community College's campus on Pratt Street.

Still, Koger added that the Courtyard would likely succeed in Baltimore, because of its business-traveler orientation and moderate prices.

"It's a strong product with good quality and great brand appeal," Koger said. "The question is whether the larger hotels in the city will have to lower their prices and increase competition for the Courtyard. How well it does will depend on how the market overall holds up with the abundance of new product coming on line."

The Inner Harbor East project will become the fourth Courtyard by Marriott in the area, joining projects in Columbia, Linthicum and Hunt Valley. In all, Marriott operates nearly 400 Courtyard hotels nationwide.

Geary Campbell, a Marriott International Inc. spokeswoman, said the company is increasing the number of Courtyard projects by targeting urban areas.

The Courtyard would also be the third different Marriott product on the local drawing board. The Bethesda-based hotel giant also controls the Residence Inn brand being pitched as the site for a hotel at Light and Redwood streets and owns the Ritz-Carlton Hotel chain, which plans to operate a luxury hotel that a Florida developer is working to build in South Baltimore.

"Each product line we have appeals to a different customer," Campbell said. She added that cities such as Atlanta, Dallas, Chicago and Washington all maintain several different Marriott hotels.

Pub Date: 4/02/99

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