Angelos, Hyatt Hotels make little progress on agreement

O's owner optimistic despite delays

other brands are possible

June 05, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Two years after proposing a $175 million hotel across from the Baltimore Convention Center, Peter G. Angelos has failed to strike a definitive deal with partner Hyatt Hotels Corp.

The failure of the attorney and the Chicago hotel chain to sign an agreement means that construction of their proposed 850-room upscale hotel will be delayed for months and not completed until at least the end of 2002. Angelos had hoped to begin work on the Grand Hyatt this month, and had originally planned to have the hotel operating in 2001.

With the lack of a signed agreement with Hyatt, Angelos has begun considering alternative hotel operators, sources said. It could not be determined which hotel brands the Orioles' majority owner is considering or has approached. Angelos declined to comment on whether he is in discussions with other hotel brands.

Despite the delays, Angelos reaffirmed his commitment to the hotel project yesterday.

"I'm optimistic that we will put a convention center hotel on that site, and I am optimistic that something will be concluded in the near future," Angelos said. "I mean business. I consider it an obligation to make the convention center the success that it can and should be. The ball is in Hyatt's court. All the ingredients that we and the city need are on the table."

Angelos added that Hyatt has had "certain reservations about the project," but he declined to identify them.

Hyatt declined to discuss the proposed Grand Hyatt, or whether the company is still optimistic that a hotel with its flag will be constructed.

"We just really don't have anything to say at this point," said Gary Ross, a Hyatt spokesman.

The delay in hotel construction near the convention center also is exacerbating problems for the Baltimore Area Convention & Visitors Association, the city agency charged with marketing and booking the convention center.

"Obviously, it has a major impact on what we are able to do," said Carroll Armstrong, BACVA's president. "There's no way to sugar coat this. We need a convention center headquarters hotel to generate the type of business that Baltimore historically hasn't been able to attract."

To buy time in the hope of bridging the gap with Hyatt, Angelos has requested and received from the city's economic development agency a series of monthly extensions to his exclusive negotiating rights to the city-owned parking lot adjacent to Oriole Park at Camden Yards, where he plans to build the 22-story hotel.

"We granted them a monthly extension because we want to keep a sense of urgency," said Roger C. Lipitz, chairman of the Baltimore Development Corp.

"We granted the extension because they have not met all of the conditions of their exclusive negotiating agreement," Lipitz added.

The most important condition that has eluded Angelos is a definitive agreement with Hyatt or another operator, sources said.

Angelos and Hyatt said in October 1998 that they had agreed to jointly market and own the 487-room Hyatt Regency Hotel downtown and the Grand Hyatt. But thorny questions such as structure of ownership and potential conflicts of interest have arisen and blocked a final agreement, sources said.

Most recently, BDC granted an extension to Angelos' team on May 27. It marked the third consecutive month that such a reprieve was obtained.

Other critical details regarding the hotel may also be unresolved. Officials from Union Labor Life Insurance Co., the Washington insurer that had pledged in March to finance Angelos' hotel, said yesterday that it was still "in negotiations."

"We're seriously considering it," said John Rodgers, a Union Labor Life spokesman. "But I'd say there's a major difference between considering and a commitment."

Angelos slapped away the suggestion that the financing commitment was in jeopardy.

"I have a firm, firm understanding from Ullico that they will finance this project," said Angelos, who has represented numerous labor unions for years.

Under terms of the Union Labor Life financing, Angelos' hotel would carry a 30-year mortgage with an average 8 percent interest rate, sources said. Angelos and his development partner would invest at least $25 million each in the project.

Meanwhile, the convention center's inability to land big meetings continues. Armstrong said a recent study determined that between November 1997 and May 1999, the city lost roughly $500 million in economic benefits, primarily because downtown lacks hotel rooms.

Although developers have proposed nine new hotels containing more than 3,300 rooms -- projects that would increase the existing hotel stock by more than 70 percent -- only one new hotel is under construction. But the $134 million Wyndham International Inner Harbor East's 750 rooms won't be completed until at least the end of next year.

"Meeting planners don't consider us. Certainly they are not holding dates for us," Armstrong said. "But we have to be positive, so we keep saying that this is going to happen."

Pub Date: 6/05/99

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