Baltimore is proposing to sell a city-owned building downtown to the family of a politically connected strip club manager for a $480,000 discount, prompting complaints that the city is giving the family a sweetheart deal and endorsing pornography.
The city is evicting the El Dorado Lounge, owned by the family of Kenneth A. Jackson, from its home of 26 years at 322 W. Baltimore St. to make room for apartments and shops as part of a project to improve the west side of downtown near the University of Maryland, Baltimore.
City officials have proposed moving the club to 19-21 S. Gay St., a former cooking school building just south of The Block strip club district, an area not far from the Inner Harbor that is booming with new restaurants and nightclubs.
The city is offering the vacant building to the Jacksons' company for $50,000, though a Jan. 19 city appraisal indicated the building is worth $530,000.
Mayor Martin O'Malley said yesterday that he supports the discount because the building is in poor condition and the Jacksons need financial help relocating their business.
He said the city has put the Jacksons in a difficult position by condemning their old business when there are few places in the city where zoning allows strip clubs.
"None of us are truly happy about the new location, but this business is a legal business, and this is one of the few areas that it is allowed," O'Malley said. "This guy was condemned through no fault of his own. ... But such is the nature of urban renewal."
City Comptroller Joan M. Pratt said yesterday that it is not financially wise for a city that is running a deficit to be practically giving away its buildings.
"If it's a building worth $500,000 and we are selling it for $50,000, I can't be in favor of that," said Pratt. "I need to know the rationale for selling a building for one-tenth of what it's worth, when we have a $21 million deficit."
The proposed home for the El Dorado on Gay Street is across the street from the Baltimore City Community College's Business and Continuing Education Center, a half-block south of the Big Top pornographic magazine store and several other adult businesses, and just north of the Holocaust Memorial and the offices of Deutsche Banc Alex Brown Inc.
Mayo A. Shattuck III, co-chief executive officer of Deutsche Banc Alex Brown, said yesterday that he opposes the City Council bill to allow the El Dorado to move to Gay Street. He said that it would mean a southward spread of The Block and that the city is endorsing a permanent presence of pornography in the heart of the city's business district.
"Obviously, everybody is interested in containment [of the strip clubs to the Block]," said Shattuck. "But there is a longer-term issue here: We are institutionally endorsing The Block in a way that will legitimize it for many, many years to come."
Donald P. Hutchinson, president of the Greater Baltimore Committee, an organization of business leaders, wrote to O'Malley on March 1, saying he was "greatly disturbed" that the city might be moving the strip club "near the heart of the business district."
O'Malley faced criticism from six elected officials Oct. 11 when he proposed evicting the El Dorado Lounge and paying the Jackson family's company $400,000 for their old building at 322 W. Baltimore St. K.A.J. Inc., the Jackson family's company, and the El Dorado Lounge had contributed a combined $4,500 to the campaigns of two of the officials, City Council President Sheila Dixon and state Sen. Joan Carter Conway.
The price was almost double the $225,000 the Jacksons' company paid for the building in 1996. But one of the legislators, state Sen. Clarence M. Mitchell IV, threatened that he could cut off state money for the city's west-side redevelopment effort if the city didn't give more money to the Jacksons or allow more time for them to move.
In the end, the city agreed to give the Jacksons an additional $50,000 - a total of $450,000 - when it buys 322 W. Baltimore St. from them. And it agreed to sell 19-21 S. Gay St. for a deeply discounted price after the Jacksons' attorney argued that the building was in terrible condition and needed a new roof, plumbing and renovations that would cost $470,000 for the first floor.
O'Malley gave a mixed response when asked what influenced him to approve a discount for the Jacksons' company.
"The political pressure did not have any effect on the price of the [Gay Street] building," O'Malley said. "But it's also true that to allow the west-side project to move forward, we needed to keep together a pretty strong coalition of legislators from across the city and state."
The El Dorado isn't the only business being displaced by the west-side renewal project to get a seemingly lucrative deal from the city. The Board of Estimates approved yesterday the purchase of the Paramount Hotel at 8 N. Howard St. for $6.9 million, though the hotel's owner bought it for $3 million in April 1999.
Jackson, the manager of the El Dorado, has said he has turned his life around after a troubled past. Court records show he has an arrest record that includes more than 30 charges of assault, drug possession and other crimes, and convictions for manslaughter in 1978, resisting arrest in 1979 and illegal possession of a gun by a felon in 1984.
His family's attorney, Lisa Harris Jones, said yesterday that she thinks the $50,000 price for the Gay Street building is fair because it's in "terrible condition."