Mayor rejects offer to buy lot

Sale of Gay St. site to strip club favored over developer's plan

March 13, 2001|By Tom Pelton and Gady Epstein | Tom Pelton and Gady Epstein,SUN STAFF

The city now has an alternative to selling a prime piece of real estate near the Inner Harbor to the owners of a strip club, but Mayor Martin O'Malley said yesterday that he won't consider it.

A Brooklandville real estate company has offered to buy a vacant former cooking school building at 19-21 S. Gay St. from the city for $450,000 - nine times the price for which the city is proposing to sell it to the politically connected family that owns the El Dorado Lounge.

The city is evicting the El Dorado from its home of 26 years at 322 W. Baltimore St. to build loft apartments as part of an urban renewal project meant to revitalize an 18-block area near the University of Maryland, Baltimore.

City officials have struggled for months to find a new home for the El Dorado, because few properties in the city have zoning that allows adult entertainment. The city chose the Gay Street location because it's a half-block south of The Block, which has been the home of strip clubs for decades.

O'Malley said last night that he would not consider the offer by Consolidated Equities Corp. because the city has made a commitment to sell the property to the family of Kenneth A. Jackson, which owns the El Dorado.

O'Malley said the city is required by law to find a new home for the strip club because it is being displaced for the city's urban renewal project. He said the Gay Street location is reasonable because it's near other adult businesses on The Block.

Although the city is losing money by selling the building to the Jacksons, it would have to pay much more if it forced the El Dorado to close and became entangled in a protracted legal battle over compensation for destroying the family's source of income, O'Malley said.

"It all goes back to the difficulty of relocating this business," O'Malley said. "We had a Hobson's choice with this club: Do we pay them a whole lot of money to put them out of business? Or do you compensate them and relocate them in one of the few areas where they are allowed?"

Some business leaders in the area have objected to the club moving to the location because it means the city is endorsing the spread of pornographic businesses into the financial district and toward the Inner Harbor.

In a letter to city officials Friday, Robert B. Becker and Todd A. Tilson of Consolidated Equities proposed buying the building as part of a "major real estate development" that the company is trying to put together nearby, although they offered no details. Tilson declined to comment.

City zoning laws allow strip clubs in the first block of S. Gay St., but only if the City Council votes to allow it as a "conditional use." O'Malley has asked City Council President Sheila Dixon to introduce legislation allowing the change. Dixon said last night that she supports that location for the club.

In addition to subsidizing the El Dorado's move through a discount price for 19-21 Gay St., the city is proposing to pay the Jacksons' company $450,000 for their old building at 322 W. Baltimore St., twice the amount the company paid for it in 1996.

City Comptroller Joan M. Pratt has objected to squandering the resources of the financially strapped city by selling the Gay Street building for $50,000 when a city appraisal Jan. 19 said it was worth $530,000.

Pratt said the city should have put the Gay Street building up for competitive bid, instead of offering it to the Jacksons at a discount.

She said a developer has told her he might be interested in buying properties adjacent to 19-21 S. Gay St., but only if a strip club is not next door.

Six legislators, including two who have received campaign contributions from the El Dorado and the Jacksons' company, have pressured O'Malley to give the Jacksons more money or time to move.

Lisa Harris Jones, an attorney representing the El Dorado's owners, has said the building is worth $50,000 because it's in "terrible condition." Her office issued a statement yesterday saying: "The city has been negotiating in good faith, and has made a commitment to my client."

Becker and Tilson said in their letter that the company would buy the building for $450,000 "as is."

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