A proposal for a major convention hotel to be built adjacent to the Baltimore Convention Center - on a city-owned parking lot that has seen grand ideas come and go - is to be unveiled at a City Hall news conference today.
Black Entertainment Television mogul Robert L. Johnson and the Quadrangle Development Corp. of Washington, led by chairman Robert M. Gladstone, have proposed a Hilton hotel for a 4-acre lot west of the convention center and north of Oriole Park at Camden Yards, Mayor Martin O'Malley and others involved confirmed yesterday.
Details about the proposed size and cost, including the extent of any public subsidy, were not immediately available.
"I think it's big news, great news for the city," O'Malley said. "I believe this will be the first hotel of its size built in any city in the country since Sept. 11 hurt the tourism industry. This is a prime site and a prime location, and these guys are great developers who do what they say they're going to do. So this is a really exciting opportunity for the city."
The proposal came unsolicited, so the city must first allow others to bid on the property, which for at least a decade has been full of big ideas - and parked cars. The amount of public money sought for such a project is likely to become a major point of contention with the state and city governments facing serious budget concerns.
But if the proposal ultimately wins approval and is built, it could solve the most pressing need for Baltimore's convention trade: a large "headquarters" hotel beside the Convention Center. The project would also aid the continuing revitalization of the west side of downtown.
The development may also include a new home for Catholic Relief Services, the international assistance agency that early this year announced plans to move to the suburbs from downtown. The mayor persuaded the group to reconsider.
"We've been looking throughout Baltimore for an appropriate home, and we're excited by any options that may become available," said Jennifer Lindsey, a spokeswoman.
The principals in the hotel proposal, Quadrangle and Johnson, founder and former chief executive officer of BET, are already involved in the hospitality industry in Maryland.
Quadrangle is a partner in the 400-room Hyatt Regency Chesapeake Bay Resort that opened to much fanfare after repeated delays in Cambridge in August.
It is also a partner in a plan to build an apartment building on Howard Street on the city's west side.
Johnson's RLJ Development LLC of Bethesda last year bought the 205-room Courtyard by Marriott-Inner Harbor for $26 million.
Johnson held 63 percent of BET when Viacom Inc., owner of the CBS, MTV and Nickelodeon television networks, bought it for $2.9 billion in stock and assumed debt two years ago. Johnson is also in discussions to buy the Montreal Expos and move them to Washington should Major League Baseball allow a second team in the area.
"A lot of good opportunities lay in Baltimore. It's a city we believe in," said Christian Chambers, a Quadrangle executive. The commercial developer also is involved in the Grand Hyatt at Washington Center and the J.W. Marriott at National Place, both in Washington.
Kathy Shepard, a spokeswoman for Hilton Hotels Corp., confirmed her company's involvement, but said it would not retain an equity stake.
"If and when the project is built, Hilton will manage it. This is what we do well," Shepard said. Hilton also manages convention center hotels in Washington, Chicago, New Orleans and San Francisco, among other cities.
The Baltimore Convention Center has failed to meet attendance projections made when lawmakers approved spending $151 million to triple its size five years ago. City tourism officials said the lack of a hotel next door has made it tougher to sell the city to convention goers - a fear that was raised when a more distant convention-hotel site was selected.
The development in Baltimore comes as Washington recently awarded Marriott Corp. negotiating rights for a new convention hotel in the nation's capital. It would eventually serve a new convention center set to open in March.
The Baltimore proposal could potentially benefit more than just the convention trade. The city is in the midst of a major facelift for the west side of downtown - once the shopping destination for Baltimoreans until blight and suburban flight took hold a generation ago. The project includes the $62.7 million conversion of the Hippodrome Theater into a Broadway-style playhouse.
"Having additional hotel rooms close to the university [of Maryland] and university medical system and Hippodrome Theater and Lexington Market - that's all very positive," said Ronald M. Kreitner, executive director of the business group WestSide Renaissance Inc.
Johnson and Gladstone submitted a proposal to the Baltimore Development Corp., the city's development agency, after discussions with president M.J. "Jay" Brodie, officials said. By law, the city must now distribute a request for proposals to enable other competing developers to make counter-proposals for the city land, O'Malley said.
Many other hurdles remain, including possible approval by the City Council and Board of Estimates of a package of financial incentives including the kind of tax breaks offered to the developers of other downtown hotels.
The convention center proposal is not the only downtown hotel project scheduled to get a boost from the city today: The Board of Estimates is scheduled to vote on a $3.2 million tax break over 10 years that will allow the construction of a 176-room Marriott Residence Inn at Light and Redwood streets. That project will have 13 percent minority investment, according to city records.
O'Malley, who has worked to boost minority businesses in the city, said he was especially encouraged that the proposed convention hotel would be owned in part by Johnson, one of the best-known African-American businessmen in the country.
"In the past, when the city looked for economic development deals, minority participation wasn't something that the city strove for," O'Malley said. "But that has changed and a lot of the deals we are putting together now have minority equity and involvement."
Some have described the site as the best one in Baltimore for a convention hotel, but it has remained a parking lot for sporting events as downtown hotels were built elsewhere.
In 1998, Peter G. Angelos, attorney and principal owner of the Orioles, unveiled plans to build a $150 million, 850-room, 24-story Grand Hyatt hotel there. But he forfeited the exclusive negotiating rights for the property with the city in April 2000 after two years of contract extensions.
A year earlier, then-Mayor Kurt L. Schmoke stunned many when he chose a site in the Inner Harbor East, a mile from the convention center, for a "conventional hotel." The 41-story Baltimore Marriott Waterfront Hotel opened last year. John Paterakis, the H&S Bakery owner, began the $154 million project himself but eventually gained other lenders and investors.
After Paterakis' project was awarded the convention-designation, some industry experts doubted that Baltimore could support two such hotels - and still do. But others believe a second major convention hotel is warranted, including Paterakis' group.
"We've always said the city was under-hoteled. Adding more hotel rooms at an appropriate pace would be good," said Michael S. Beatty, head of H&S Properties Development Corp. "Selfishly, we'd like to say we're the only game in town, but if the city is going to grow its convention business, another hotel would be a good thing. I still say we have the best site. You cannot re-create the waterfront."
The design of the project, next to the baseball stadium, is also likely to be scrutinized. Angelos had promised to place his hotel on the western edge of the site, but concerns remained about the view of the renovated Camden Yards railroad station and the ballpark from downtown.
But economic considerations will likely loom largest. Hospitality industry officials have warned that the convention center could become a "white elephant" unless a large hotel is built within walking distance of the meeting facility.
'A little skeptical'
Skeptics of the market's ability to support two convention center hotels will remain tough to convince given that the original arguments and studies supporting the center expansion are now viewed as unreliable. Combined attendance at conventions and trade shows has never reached the 330,000 a year that backers of the expansion projected. In spite of that, the Baltimore Area Convention and Visitors Association wants to explore another expansion to the convention center, which would double exhibit space - at a cost estimated at $250 million.
The proposal for a new hotel had been held to a tight circle of city and business leaders. Even City Council President Sheila Dixon said she was unaware before yesterday of any details or whether an announcement was imminent.
"I'm a little skeptical," she said. "Looking at the economy, I wonder how feasible it's going to be.
"I have some reservations about what we're promising. That's the city's land. ... It's prime land."
Tori Leonard, spokeswoman for the state Department of Business and Economic Development, said, "We've not been involved in any discussions about such a project. Clearly this is an opportunity for the city to have a leadership role. The state role at this point is uncertain."
Several experts acknowledged the likelihood for public incentives to be sought for a major hotel project, which have been rare since the downturn in travel after the Sept. 11 attacks. Convention center hotels are scheduled to open next year in Houston, St. Louis and Denver.
Hans F. Mayer, executive director of the Maryland Economic Development Corp., the quasi-public state agency that finances public-private projects, said yesterday that he had not been approached about the hotel plan, but believed it would likely require public subsidies.
Among options, he said: The city could retain ownership of the property and the hotel and finance the project through tax-exempt bonds. Or it could use taxable bonds to help pay for a project owned by a private developer.
But Mayer acknowledged, "This is a very difficult market for hotels."
Sun staff writers Scott Calvert, June Arney, Laura Vozzella and Kate Shatzkin contributed to this article.
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