Schmoke rejects land funds

Mayor won't rush Key Highway area purchase in last days

Hotel plan in question

Deal worth millions struck with governor, says city official

November 16, 1999|By Tom Pelton | Tom Pelton,SUN STAFF

In a move likely to disappoint developers hoping to build a hotel and apartment complex in southern Baltimore, Mayor Kurt L. Schmoke said yesterday that he will not approve a project to fix up the crumbling waterfront along Key Highway before leaving office next month.

"I want to disabuse people of the notion that this was something we wanted to rush through before I left office," said Schmoke, who steps down Dec. 7 to make way for Mayor-elect Martin O'Malley.

A representative of HarborView Properties Development Corp. has said that he hoped the mayor and cityBoard of Estimates would approve the $5.6 million purchase of a milelong ribbon of waterfront property from the company before the change in administrations.

O'Malley declined to comment on the project, saying through his spokeswoman that he didn't know enough about the deal.

The proposal would help developers build a 250-room Ritz Carlton and dozens of apartments because it would require the city and state to pay for millions of dollars in repairs to the waterfront's decaying bulkhead.

Neighborhood activists in nearby Federal Hill have complained that the project -- which could cost more than $20 million -- amounts to more taxpayer support for a company that has received tax breaks.

The proposal also calls for the construction of a milelong brick walkway for the public along the waterfront near the 27-story HarborView apartment tower on Key Highway.

The proposed real estate deal is spelled out in a Sept. 3 letter from state Transportation Secretary John D. Porcari to George G. Balog, city public works director. This letter says the city and state are committed to pay $9.5 million toward the project, with the city and state each contributing about $4.7 million.

Schmoke said yesterday that the city and state struck the deal with HarborView company President Richard Swirnow during a meeting July 6 at the governor's conference room in Annapolis.

Swirnow had been trying to persuade Schmoke for almost two years to help his project by paying for the same kind of waterfront improvements that the city provided in Inner Harbor East beside John Paterakis Sr.'s hotel and office complex, Schmoke said.

Schmoke said he kept turning Swirnow down, saying that the city didn't have the money and that Inner Harbor East was different because that involved city-owned land.

"Apparently, Swirnow finally convinced the governor that his project deserved the same kind of funding as Inner Harbor East," the mayor said yesterday.

The governor took the initiative to call the parties together and strike the deal, Schmoke said.

The mayor said he was irritated because it appears as though the governor might be underplaying his leadership role in the hotly debated project and waffling on his promise to pay for it.

"The governor cut this deal in July," Schmoke said. "If the state is now saying, in the words of Ron Ziegler, Nixon's press secretary, that this agreement is no longer operative, then there will be no city commitment to this project," Schmoke said.

Jack Cahalan, a spokesman for the governor, said yesterday that Glendening is not wavering in his support for fixing up the waterfront and building a public walkway. The request is being analyzed as part of the normal state budget process, Cahalan said.

"The governor agreed to work with the city to fund those elements of the project that are ready to move forward," Cahalan said. "And we are now trying to identify the hard numbers and find out where the money is going to come from."

State campaign contribution records show that Swirnow, his companies and a vice president of the HarborView company contributed $5,000 to Glendening's campaign last year.

In addition, the HarborView was the location for an Oct. 17, 1998, $125-per-ticket fund-raising event for the governor that featured cast members of the now defunct NBC television drama "Homicide."

Cahalan said the campaign contributions had nothing to do with the governor's decision to help Swirnow.

Cahalan acknowledged that the governor set up the July 6 meeting with Swirnow. "The governor thought this project was stalled, and he wanted to get the parties together to figure out how things could move forward."

But Cahalan added: "Any decision in allocating state funds is made strictly on the merits of the project."

Franklin Wise, general counsel for the HarborView company, said he will not comment on Schmoke's decision not to act on the proposed purchase of land.

Wise added that he expects the state and city to honor the agreement struck in July. That deal would give the HarborView company $5.6 million for a 20-foot-wide strip running along the waterfront from Federal Hill nearly to the Baltimore Museum of Industry.

The agreement would also require the city and state to pay about $4 million to strengthen a pair of vacant industrial piers along Key Highway so the HarborView company can build 86 townhouses or a number of apartments, Wise said.

Dick Leitch, president-elect of the Federal Hill Neighborhood Association, said taxpayers are contributing so much money they deserve to see a public park along the water instead of a private apartment complex.

"This is a funny project," said Leitch. "It is supposed to be on the most attractive land in the city of Baltimore, and yet it needs so much public subsidy."

Sun staff writer Thomas W. Waldron contributed to this article.

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