Council votes to finance hotel in city

After months of intense debate about the city's building and owning a convention center hotel, a wide-ranging dispute over everything from the project's complex financing to its effect on the city's neediest neighborhoods, the matter boiled down to one simple concept for the Baltimore City Council last night: risk vs. potential reward.

Nine council members thought the $305 million hotel would cement the city's reputation as a tourist destination and that it was worth rolling the dice for.

Six others thought that getting into the hotel business was too risky.

The council's approval of the project, which would be the city's costliest, brings Baltimore one step closer to opening a 752-room Hilton on a parking lot next to the downtown Convention Center in 2008. All that's left is one vote, largely formal, that is expected next month.

The nine council members who supported the hotel said their vote was about courage and believing in progress. They compared bringing Baltimore the Hilton to the creation of Harborplace and other risks that have paid off for the city.

"Every project the city undertakes has risk," Councilwoman Helen L. Holton said before voting "yes." "I am convinced that the risks this project faces are outweighed by the many community benefits."

Those who voted "no" talked of too many unanswered questions and of doing right by taxpayers.

"I have to be able to explain a vote such as this," said Councilwoman Mary Pat Clarke. "The only vote I can explain to my constituents is no."

The approval of the hotel pleases Mayor Martin O'Malley and city development and tourism officials, who have repeatedly insisted that without the new hotel, the under-performing Convention Center will continue to stagnate and Baltimore will be unable to compete in the meetings industry.

"Building this convention hotel is an important step in Baltimore's comeback," O'Malley said in a statement after the vote. "Once again, the City Council has come together to move our city forward. People working in good faith can always find a way to compromise to make progress."

For much of the summer, a majority of the council was inclined to vote against the hotel. O'Malley's administration captured support by promising skeptics who would change their votes about $72 million for community revitalization programs, including two neighborhood centers in Holton's district.

Earlier, Holton and Councilman Kenneth N. Harris Sr. had demanded that the city find a private investor for the project. But when O'Malley made it clear that he was willing to deal, they changed their minds. Holton gained a new gym and a community center for her district.

Harris got a $9 million bond issue on the 2006 ballot that, if passed, would be used for renovating recreation centers. He also got O'Malley to persuade Hilton officials to agree to a scholarship fund for city students.

"In my view, there remain many unanswered questions," Harris said. "But I now stand before you and say the convention center hotel is a good project."

Before those promises were made, city officials created a $59 million affordable-housing trust to placate irate clergy and members of BUILD - Baltimoreans United in Leadership Development - who condemned the city for developing a downtown hotel while blight pervaded so many neighborhoods.

Councilman Keiffer J. Mitchell Jr., who voted against the hotel, criticized his peers for what he called selling out.

"If we used half the energy we used in making deals, we'd have a private investor," he said, adding that Holton and Harris changed their votes for projects already in the city budget:

"It looks like last year's Christmas gifts ... were placed under the tree."

To build the hotel, which could open in 2008, Baltimore would issue revenue bonds. The debt to finance construction of the hotel would be paid off through revenues generated by its operation, officials said.

Baltimore Development Corp. officials said the hotel would pay for itself and allow the city to reap millions in profits.

If the hotel failed, the city would use tax income from the hotel - and possibly the occupancy tax from all Baltimore hotels - to pay off its debt.

Though publicly financed convention center hotels in cities including St. Louis and Myrtle Beach, S.C., haven't met projections or made enough money to pay their bills, BDC officials have said Baltimore's market is stronger and its attractions more desirable.

Councilman James B. Kraft said he can't support the hotel on faith or the business it is "expected" to do.

"It's all predicated on those things working," Kraft said. "For the sake of every taxpayer, I hope those expectations are met."

Council Vice President Stephanie C. Rawlings Blake, who supports the hotel, said she did not like the negative tone of the project's critics:

"How eager some of us are to doubt the future of Baltimore."

Greater Baltimore Committee President Donald C. Fry said that because tourism is one of Baltimore's top economic generators, it is critical to be as supportive as possible of the industry's needs, even if that means taking risks.

"There are certain times when you have to be imaginative, you have to be bold, to get things done," Fry said. "There's good reason to believe this is going to be a successful hotel."
Hotel vote

Nine members of the 15-member Baltimore City Council voted yesterday to fund a convention center hotel with $305 million in city revenue bonds.

Voted "yes": President Sheila Dixon, Vice President Stephanie C. Rawlings Blake, Paula Johnson Branch, Robert W. Curran, Kenneth N. Harris Sr., Helen L. Holton, Edward L. Reisinger, Rochelle "Rikki" Spector, Agnes Welch

Voted "no": Mary Pat Clarke, Belinda Conaway, Nicholas C. D'Adamo Jr., James B. Kraft, Keiffer J. Mitchell Jr., Bernard C. "Jack" Young