Convention center hotel proposed

SunSpot Staff

The city-owned parking lot near the Baltimore Convention Center downtown has seen a myriad of hotel-development dreams come and go over the years.

Now, this one seems to offer the most promise. A proposed 750-room Hilton hotel north of Oriole Park at Camden Yards is expected to enhance Baltimore’s reputation as a major convention destination.

The 75,000-square-foot Hilton Hotel would be located west of the Baltimore Convention Center and north of Camden Yards, Mayor Martin O’Malley said today.

"We are about to begin yet another chapter in the national rebound of Baltimore," O’Malley said today at a City Hall news conference. "This proposal illustrates the confidence and belief that these developers have in Baltimore."

The hotel is to be built by Robert L. Johnson, the founder and former owner of Black Entertainment Television, and Quadrangle Development Corp., the Washington developer led by chairman Robert M. Gladstone.

The proposed hotel, which came forth in an unsolicited bid, would include parking for 750 cars, would create about 800 construction jobs and would employ 350 people once the hotel is in operation. It would be managed by Hilton Hotels Corp., on whose board Johnson sits.

The project also includes a new 200,000-square-foot international headquarters for Catholic Relief Services, the agency that relocated to 209 W. Lafayette St. downtown from New York City in 1989.

The headquarters would be bordered by Pratt, Paca and Camden streets and would allow the agency to expand from its current base of 350 jobs to as many as 600.

The proposed Hilton would address the primary need facing the convention center: a major hotel within walking distance. The development also is considered the crown jewel in the city’s efforts to develop the west side of downtown Baltimore.

"We see Baltimore as a market that has future growth opportunities for our business," said Johnson, 56, whose Bethesda-based company bought the 205-room Courtyard by Marriott-Inner Harbor last year for $26 million. He borrowed $15,000 to start BET in 1979 and sold it two years ago for $2.9 billion Viacom Inc. "This relationship is a centerpiece for what minority entrepreneurship can be in this town."

But today’s celebratory atmosphere -- marked by O’Malley being flanked by a broad range of local officials, business executives, philanthropists and entrepreneurs -- was tempered with a dose of reality from Gladstone.

"We know that this is not going to be an easy project," he said. "It’s going to take a lot of time and a lot of resources to get this project completed.

"We welcome this challenge, and we look forward to working together with the city on this project," he said.

M.J. "Jay" Brodie, president of the Baltimore Development Corp., the city’s development agency, also was pragmatic. Since the proposal was unsolicited, the city must allow others to bid for the property, he said. Bids will be solicited for 60 days.

"For 15 years, the lot has been just sitting there -- growing cars," Brodie said. "We’d like to see it grow a hotel, and a Catholic Relief headquarters."

Gladstone, whose company is a partner in a plan to build an apartment building on Howard Street on the city’s west side, later added that he and Johnson were prepared to meet any bid that surfaced through the solicitation process.

"You never know, so we’re prepared," he said after the news conference. "It’s an open, competitive process.

"We think we have a great team, and we think we have some good ideas on how we should develop the property," Gladstone said. "We don’t want to get complacent."

The primary hurdle facing the proposed project concerns the amount of public money that would be involved in such a project, as both the city and the state face serious budget issues. Any plan for local financial incentives would face approval by the Baltimore City Council and the Board of Estimates.

In addition, the plan comes as the travel and tourism industry seeks to rebound from the Sept. 11 terrorist attacks -- as well as amid struggling financial markets, continued concerns about sluggish economic growth and record-low interest rates, all of which could make raising funds for such a project all the more difficult.

"The credit markets are very volatile -- and they change very frequently," Gladstone said. "Hopefully, the capital markets will have settled by the time we come to the gate."

Because the proposal is subject to the city’s bidding process, other specifics concerning the hotel project were not available. The proposed Hilton is expected to be located on the east side of parking lot site.

Ken Hackett, executive director of Catholic Relief Services, said his agency expects to be in its new headquarters by June 2005. The agency had been considering a site in Catonsville, he said.

"This is a great opportunity for us," Hackett said. "We gave a great partnership. We are so pleased that we are able to stay in this great city."

Should the hotel be built, it would "put Baltimore on the convention center market map," said Chekitan S. Dev, an associate marketing professor at Cornell University’s School of Hotel Administration in Ithaca, N.Y.

"The city will become a strong player," he said. "In order to attract conventions, you need a good convention center and a good hotel. This would do it."

With a Hilton hotel, the Baltimore would be able to tap into the company’s marketing expertise, Dev said.

"You’ll have the Hilton global marketing team working for you," he said. "Hilton can provide leads on what would be the right customers for Baltimore to target."

Anne R. Lloyd-Jones, senior vice president of HVS International Inc., a hotel consultancy based in New York, said the proposed Hilton most likely would not open for three years, including two years alone to build the structure.

"There’s a lot of things that have to be done before you have a hotel coming up out of the ground," she said.

Because of this time horizon, "You cannot look at where the financial markets are today," Lloyd-Jones said. "You have to look at how the market is expected to evolve. With a convention center, that is most critical."

Convention planners, she added, also are seeking more space for "ancillary events" -- functions that are too small to be held in a convention center -- and having a large hotel nearby is another selling point.

"The requirements are changing for conventions," Lloyd-Jones said. "As they are becoming more space-intensive, cities are dropping out of contention."

There’s an additional benefit for having a nearby convention center hotel, she said.

"There’s a mental hurdle that comes with having to get on a bus to go to your hotel," she said. "If you don’t have a hotel nearby, someone has to pay for transportation -- and that makes the cost of your convention more expensive."

Still, city officials remained optimistic that a large Hilton hotel would be coming to the Inner Harbor.

"Baltimore is bucking the national trend," O’Malley said after the news conference. "We’re very grateful that two developers with these reputations have come along to put this missing piece in."

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