Theater budget increase sought

Hippodrome needs more money to lure investors, leaders say

March 04, 2002|By Scott Calvert | Scott Calvert,SUN STAFF

The Maryland Stadium Authority is asking the General Assembly for permission to borrow $2 million more for the Hippodrome Theater restoration on downtown's struggling west side - the latest escalation in the project's budget.

The request, with a pledge to find a $2 million private match, is an effort to attract private investors. It would push the heavily subsidized project's budget to $60.5 million, a 20 percent increase since December 1998.

As lawmakers consider the request, construction workers in recent weeks have knocked down small buildings at the corner of Baltimore and Eutaw streets to make way for a new lobby, a ticket office and restrooms.

"It's always been our intent to continue moving the project forward as best we can," said Richard W. Slosson, executive director of the stadium authority, which is managing the project.

The target for reopening the theater as a 2,250-seat playhouse for Broadway shows is February 2004. The goal had been September 2003.

In 1998, the stadium authority had estimated that the renovation would cost $35 million. In December 1998, the estimate rose to $50 million. Since then the budget inched up to $52 million, and then $56.5 million.

The latest proposed increase is meant to reassure two banks interested in buying historic tax credits for $9.8 million. The banks - Bank of America and Allfirst Financial - have told the authority they want a larger contingency fund in case of unforeseen costs.

"If they're going to invest, they want guarantees there is enough money to finish the project," Slosson said.

The banks' concern rose, he said, after the authority agreed to pay $2.7 million to acquire a building that will be part of the theater complex. The authority had budgeted $1 million and the property owner had sought as much as $12 million before the two sides settled.

Allfirst and Bank of America officials involved in the tax-credit discussions did not return calls.

The owner of the tax credit receives a dollar-for-dollar reduction in his tax bill. If the credit exceeds the state tax bill, the state will issue a refund for the balance. State credits equal 25 percent of approved renovation costs on older buildings; federal credits are 20 percent.

The banks are looking to buy $17 million in credits for $9.8 million. One reason for the discount is that an investor can cash in the credit only after a project is completed, and money loses value over time. The risk of the project and a profit to motivate investors are also factored into the discount.

The soaring expense of the popular tax credit program has led to efforts in the General Assembly to restrict it. The theater's tax credit funding would appear to be threatened by legislation as drafted. But state Sen. Barbara A. Hoffman, a Baltimore Democrat aiming to rein in the program, said she intends to protect the Hippodrome.

The authority's request for additional borrowing has support from key legislators, including Hoffman, chairwoman of the Senate Budget and Taxation Committee, and Del. Howard P. Rawlings, a West Baltimore Democrat who leads the House Appropriations Committee. They have sponsored legislation to increase borrowing for the Hippodrome project.

"The General Assembly has made a commitment to this project," said Del. Samuel I. Rosenberg, a Northwest Baltimore Democrat and co-sponsor of the Hippodrome bill.

Reviving the long-shuttered theater at 12 N. Eutaw St. is considered key to a larger effort to bring back downtown's west side.

The state has set aside $16.5 million for the project and told the stadium authority it can sell $12 million in bonds, $2 million of which will cover debt service on the bonds in the first two years. Baltimore has pledged $6 million, and Baltimore County $500,000. That comes to $33 million in public money, not counting the authority's new request.

But private fund raising for the theater has taken longer than expected. The pace has picked up since last fall, when Mark Sissman became chief executive of the Baltimore Center for the Performing Arts, a nonprofit group coordinating the restoration with the stadium authority. There are three private sources: donations, an investment by the theater operator, and the sale of tax credits. Sissman has not said how much money still needs to be raised.

In January, Robert M. Boras, the stadium authority's Hippodrome project manager, said major work such as demolition would not occur until all private fund raising is done. Boras did not return a telephone call seeking comment.

Slosson, though, said the goal has been to move as quickly as possible. And Alison L. Asti, the authority's general counsel, said last week that Sissman's efforts are nearly done, a view echoed by Sissman. Still, the bonds legally cannot be sold until all money is committed.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.