RLJ receives mayor's nod for new hotel

750-room Hilton planned just north of Oriole Park

Financing still a hurdle

City hoping to boost use of convention center

November 13, 2003|By June Arney | June Arney,SUN STAFF

A year to the day after the city first unveiled Robert L. Johnson's plan for a headquarters hotel in Baltimore, the founder of Black Entertainment Television yesterday won the mayor's blessing to build it.

Johnson's firm, RLJ Development LLC of Bethesda, and Quadrangle Development Corp. will have a six-month exclusive negotiating priority to build a $200 million, 750-room Hilton just north of Oriole Park at Camden Yards. The hotel is designed to boost attendance at the city's flagging convention center.

Johnson beat out two other development teams for the job.

"We're thrilled as you can imagine," Thomas J. Baltimore Jr., president of RLJ Development, said yesterday. "We have worked 14 long months on this."

The goal is to break ground next year and complete the project by 2006 or 2007, he said.

Mayor Martin O'Malley's decision echoes a unanimous board vote by the Baltimore Development Corp., the city's quasi-public development agency, which was announced Oct. 24.

"We do this to maximize the economic success of the convention center, so that we can expand the travel and tourism industry," O'Malley said yesterday.

But the mayor acknowledged that financing remains a large hurdle.

"The financing still has to make sense for the city," he said. "We want to do it with as little exposure as possible to the citizens of Baltimore."

Also still to be negotiated is a room-block agreement by which the hotel would provide a certain number of rooms to the Baltimore Area Convention and Visitors Association, city officials said.

Leslie R. Doggett, BACVA president and chief executive, said she hopes that 60 percent of the rooms will be available to the association under those terms.

"One of the things that's most important if we're going to build this hotel is having a room-block commitment," she said.

As part of its proposal, RLJ offered to make 600 rooms available to BACVA at any given time depending on the booking window available, Thomas Baltimore said. Final details would be resolved between Hilton and the city as the hotel gets closer to opening, he said.

The Johnson/Quadrangle hotel would have a 25,000- square-foot grand ballroom and a diagonal plaza running from Pratt Street and opening to a Camden Street plaza, which would be paved and landscaped. An elevated all-weather walkway would cross Eutaw and Howard streets, connecting the hotel project with the Convention Center.

The 750,000-square-foot hotel would have 1,000 underground parking spaces, with restaurants and retail space at street level. The project also has a provision for an additional 250 rooms in a second phase.

The plan includes an adjacent new headquarters building for Catholic Relief Services Inc.

461 new jobs

The hotel is projected to create 461 jobs and to contribute $4.4 million a year in city taxes and revenue by its fourth year of operation, O'Malley said.

Compared with other proposals, the Johnson hotel was closer to the main entrance of the Baltimore Convention Center, tied in better to west side development, provided a more visitor-friendly entrance to the city, allowed for more parking and could accommodate expansion to 1,000 rooms - all reasons that O'Malley said he thought made it the best choice for the city.

It also preserves views from Camden Yards, he said.

"You will still be able to see the distinctive cupolas at Camden Station and 250 West Pratt Street, popularly known as the Step Building," he said. "You will still be able to see the top of the Holiday Inn with the restaurant that no longer turns. You will still be able to see the Bromo Seltzer Tower."

The hotel is to be financed with tax-exempt bonds, but the precise obligation of the city is yet to be determined.

Denver offers a glimpse of how such a deal might work. Denver recently closed on a $300 million bond deal for a hotel in which the local government was responsible for 40 percent to 45 percent of $280 million in senior bonds, according to Irene E. Van Sant, project analysis director for the BDC.

Concerns voiced

As the process of selecting the Baltimore hotel's developer unfolded in recent months, critics questioned whether 750 rooms was enough, given that a consultant's study recommended that the new convention hotel have a minimum of 800.

Also, there were concerns about whether the proposed site preserved views from the ballpark and whether putting Catholic Relief Services on the site was the best use of prime space. Many also questioned whether the city should finance and own the hotel.

The Johnson team has long been viewed as the front-runner in what became a three-developer race for the hotel job.

The competing teams included a group that called itself "the Believe Team," which included local businessman Otis Warren; Willard Hackerman, head of Whiting-Turner Contracting Co., who controls the Sheraton Inner Harbor and a neighboring parking lot; and Baltimore architect Peter Fillat, who designed the Baltimore Marriott Waterfront hotel.

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