Hotel dispute delays renewal

West-side project awaits settlement of Paramount price

Hotel price dispute delays west-side renewal project

January 22, 2001|By Tom Pelton | Tom Pelton,SUN STAFF

A monthslong debate over what the city should pay for Baltimore's oldest hotel - which has seen its price tag more than double since the city targeted it for condemnation - is holding up the construction of a key part of downtown's west-side urban renewal project.

The city's development agency has been weighing whether to pay about $6.6 million for the 120-room Paramount Hotel at 8 N. Howard St., which is what one city estimate says the 96-year-old building might be worth.

But other appraisals have been all over the board, with the owner's figures showing the hotel might be worth more than $12 million because of millions of dollars he says he has invested in recent months performing a "complete renovation."

City officials are questioning the extent of those renovations - all done since the building was marked for condemnation - and say that another city appraisal puts the building's value as low as $3.8 million.

"In some cases, people try to milk the system for all it's worth, and I think that's what's going on here," said City Council President Sheila Dixon. "I hope the city gets its appraisers in [the hotel] to take a good look at it."

The city's questions about the hotel's value are holding up the Bank of America's proposed 334-unit Center- point apartment complex, widely viewed as a linchpin of the west-side redevelopment, because it is designed to transform a boarded-up block across from the Hippodrome Theater into cafes and shops.

The overall cost of the west-side revitalization project - the city's largest urban renewal effort since the Inner Harbor - has been rising as the economy has cooled.

Two years ago, the city expected to pay about $30 million buying old buildings and relocating merchants in the project's first phase. Now city officials say they're looking at more than $45 million.

To compensate for the rising cost, the financially strapped city is turning to the state and asking for another $50 million in funding over the next five years.

Condemnation planned

The Paramount Hotel sits at the southern end of a blighted stretch of the Howard Street corridor, next to a boarded-up building and a closed clothing store.

In December 1998, the City Council introduced legislation allowing the city to condemn the Paramount as part of a plan to rebuild 18 blocks on downtown's sagging west side.

A month and a half later, the hotel's owner signed an agreement to sell it for $3 million - triple its 1996 selling price and more than five times the $545,000 it sold for in 1992 after foreclosure and bankruptcy, records show.

The sale closed on April 28, 1999, five days before the City Council voted 13-4 to approve the condemnation law.

The Paramount is the last property the city needs to buy before Bank of America can begin building Centerpoint, which is five months behind schedule.

Several other parts of the west-side redevelopment project are also behind schedule, for reasons that range from debates over preservation to the relocation of merchants, according to city officials and developers:

The Weinberg Foundation's renovation of the vacant Stewart's department store at Howard and Lexington streets into offices has begun but is about a year behind, in part because the city has been slow to buy two buildings east of it for conversion into the Stewart building's new entrance.

A proposed 600- to 900-space parking garage at Clay and Liberty streets has been delayed at least six months because the city wanted to preserve as many buildings in the area as possible.

A six-block, $150 million retail complex called Howard Street USA that the Weinberg Foundation had proposed building on the south side of the 200 block of Lexington St. has been sent back to the drawing board because the city has signed an agreement to preserve many of the buildings.

Meanwhile, construction has begun on six projects in the area, including the renovation of the former Hecht's department store and Congress Hotel into apartments, and the construction of three new buildings on the nearby campus of the University of Maryland, Baltimore.

City officials say the west-side project has been more expensive and time-consuming than expected because the new administration of Mayor Martin O'Malley has gone out of its way to preserve old buildings and be generous to shopkeepers being displaced.

`Going to happen'

Ron Kreitner, director of West Side Renaissance Inc., a business organization pushing the project, said neither the economic slowdown nor delays on individual projects will derail the revitalization effort.

Driving the project forward are an expansion of the nearby University of Maryland, Baltimore, campus and a national trend toward increasing demand for apartments in downtown areas, Kreitner said.

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