Charity group backs out of hotel project

Catholic Relief says it will seek another building downtown

Agency can't afford to wait

Convention complex would make new offices 18 months late, it says

February 19, 2004|By June Arney | June Arney,SUN STAFF

Catholic Relief Services has withdrawn from the convention hotel project that would have included its new headquarters on a lot just north of Oriole Park at Camden Yards. The charity said it couldn't wait for the new building and would move its headquarters to an existing edifice downtown.

The charity's decision to walk away from its partnership with Robert L. Johnson, whose development team has signed an exclusive agreement with the city to negotiate a contract to build the hotel, will not slow down the proposed 750-room project, officials said yesterday.

"It's a simple business decision," said Ken Hackett, president of Catholic Relief Services. "We need space, and we need it sooner than that was going to give it to us."

Hackett announced the decision in a letter to Mayor Martin O'Malley last week. The mayor had pledged to include Catholic Relief in plans for the hotel development when it appeared possible that the agency might seek a new headquarters outside the city.

Catholic Relief is planning to quickly buy and move into another building in downtown Baltimore, Hackett said. The convention center plans would have put construction of the new headquarters 18 months behind schedule.

The agency has identified about four buildings as possibilities for its new home, said David M. Gillece, president of the commercial real estate firm Colliers Pinkard and real estate adviser to the relief agency. The group hopes to select one within 60 days, he said.

With the Catholic Relief headquarters no longer on the site, developers can now expand their plans for the proposed $200 million, 750-room Hilton to include an additional 25,000 square feet that would have been used by the building.

The hotel - intended to boost use of the city's flagging convention center - is to be publicly owned and publicly financed.

"We now have the entire site," said Irene E. Van Sant, project analysis director for Baltimore Development Corp. "We're going to absorb the entire site. It will be ours to use for the convention center hotel."

Johnson's firm, RLJ Development LLC of Bethesda, did not return calls yesterday.

RLJ is teamed with Robert M. Gladstone's Quadrangle Development Corp. on the headquarters hotel project to be built just north of Oriole Park.

The question of whether Catholic Relief Services should be included in plans for the hotel sparked controversy in the months of jockeying among various developers that preceded the selection of Johnson's team in mid-November.

Others who hoped to build the hotel said the promise of a home for Catholic Relief forestalled more creative use of the site.

The city and Johnson's team signed the exclusive negotiating agreement Feb. 9, which gives them six months to work out details of design, cost and financing, subject to extensions. The hotel is now proposed to open in spring or summer 2007.

"Freeing up that footprint will give the Gladstone/Johnson team the opportunity to reconsider some of the aspects of their design," said M.J. "Jay" Brodie, president of Baltimore Development Corp., the city's quasi-public development arm. "I would be surprised to see much change in the room numbers. We think 750 is about what could be financed."

In coming months, several possible designs will be presented in informal public meetings, Brodie said. Official public hearings would come later on in the process, he said.

In selecting a developer for the project, Catholic Relief found itself often at the center of controversy over whether its headquarters, a building that would not bring in tax dollars, was the best use of such prime real estate.

In its original agreement with the Johnson group, Catholic Relief made clear it could move forward with construction independently of the hotel project. But moving up construction wasn't possible because of parking and other issues.

"It wasn't enough," Hackett said. "We couldn't build and just ignore all the other things that were going on at the site. We were concerned about all the controversy on the design issues. That was a wake-up call to us."

The Catholic charity, currently at 209 W. Fayette St., did not enjoy being at the center of contentious discussions over the project.

"In the debate about the design issues, we kept coming up," he said. "This was getting way too complicated and too much of a delay."

Catholic Relief had looked at two dozen sites downtown four years ago and briefly considered moving to the Catonsville area, before sealing the deal with the Johnson team.

The mayor, in an effort to keep a big employer in the city, had supported the plan that aligned Catholic Relief with the developers.

The group has not requested nor been offered any incentives by the city to stay downtown, officials said.

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