Convention Center design funds released After delay, Senate panel votes to free $850,000


ANNAPOLIS -- A Senate committee, ending a yearlong battle between fiscal conservatives and civic boosters, voted yesterday to fund the design of a major expansion of the Baltimore Convention Center.

The Budget and Taxation Committee's release of $850,000 in state funds, to be matched by Baltimore City and private sector grants, came almost a year after it was first allocated, leaving the expansion project one year behind schedule.

The real battle will come next year, however, when the Baltimore Convention Center Authority returns to Annapolis for permission sell about $125 million in bonds for the actual construction work. The project's supporters have to overcome fears that the state may lose its triple-A bond rating if it borrows too much to finance the project.

Robert S. Hillman, chairman of the authority, which was created by Gov. William Donald Schaefer to study the expansion needs of the Convention Center, said yesterday that two architectural firms have completed some initial work on the project without a contract and that a construction manager had been selected. He said contracts for their work will be presented to the state Board of Public Works on Jan. 29.

But some senators on the committee stressed that yesterday's vote to fund the design did not commit them to fund the construction next year. Unless the Convention Center Authority can come up with an acceptable financing plan, its leaders were warned, it will come up empty next year when it pleads for permission to sell $125 million in bonds.

"I think the funds should be released," Sen. John A. Cade, R-Anne Arundel, said grudgingly before the vote. "But I think it should be underscored three or four times . . . that a vote to release the funds should not be construed as a vote to build the facility."

The 8-4 committee vote means the Convention Center Authority will receive the money to design what could be a $125 million project. The current plan is to more than double the size of the downtown facility, from 422,460 square feet to 991,870 square feet.

The design funds were allocated in last year's legislative session on the condition that matching grants were found and that an initial financing plan was submitted. House and Senate committees delayed releasing the funds through the summer. The House Appropriations Committee approved the design funding in September.

Among the concerns of Mr. Cade and some other members of the Senate committee was whether the state will have to exceed its self-imposed borrowing limits to finance the project.

Since 1979, the government has agreed not to let its tax-supported debt exceed 3.2 percent of statewide personal income. Under even a best-case scenario of personal income growth, other statewide spending needs and changes in federal tax regulations, the project will bring that debt ratio to 3.19 percent by 1994, according to Ann Marie Zalewski, a principal analyst with the state's Department of Fiscal Services.

The state's failure to stay within its debt limits could threaten its valuable triple-A bond rating, Ms. Zalewski warned. She also reminded lawmakers that by taking on the expansion project, the state would also take on the Convention Center's $2.5-million annual operating deficit.

"I just think we have so many more vital projects for people who are desperate, people without housing," Sen. Julian L. Lapides, D-Baltimore, said in explaining his "no" vote. "Sometimes it's better to be great as a small city than a flop as a big city."

But Mr. Hillman and others argued that Baltimore was beginning to lose convention business to cities with larger facilities. Two weeks ago, he said, the American Society of Hematology canceled its 1993 convention here because it had outgrown Baltimore's center. The convention had been booked in 1986.

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