One of Maryland's most powerful lawmakers yesterday called for a meeting of General Assembly leaders in early June to discuss millions of dollars in potential public subsidies for a planned hotel east of the Inner Harbor.
House Speaker Casper R. Taylor Jr.'s decision to hold a briefing comes amid growing concern about the planned 27-story hotel's ability to benefit the recently expanded Convention Center, which is a mile away from the Inner Harbor East project.
Del. Howard "Pete" Rawlings, the Baltimore Democrat who chairs the House Appropriations Committee, said the state's share of the proposed $42.1 million subsidy "might be one of the defining issues in the 1998 legislative session."
"[The planned hotel] involves so much state-funded infrastructure, and I think it's crucial that we move forward as rapidly as possible to get the maximum benefit for the Convention Center," said Taylor, the Allegany County Democrat who last year played a key role in engineering a one-year funding increase to market the center.
"But I don't want to make any premature answers until we have a comprehensive briefing on what the state is being expected to do," Taylor added.
The Inner Harbor East team working to develop the 750-room, waterfront hotel is seeking $42.1 million in public assistance, according to a copy of its proposal filed with the Baltimore Development Corp., the city's economic development agency.
At that amount, the hotel would represent one of the largest publicly supported but privately owned economic development projects in Baltimore during the past 20 years.
The state would be asked to chip in at least $5 million of that amount, although that figure could change as negotiations progress between the BDC and the Inner Harbor East team. The state money would come in the form of a loan, at 2 percent interest, from Maryland's Sunny Day fund, according to the proposal.
To date, neither the state nor the city has received a formal request for subsidies.
"Clearly, there's a substantial amount of state money associated with any hotel project in the city because we don't have enough resources on our own," said Roger C. Lipitz, chairman of the BDC. "And thus far, the state hasn't made any commitment to us."
In a letter made public yesterday, Lipitz warned Mayor Kurt L. Schmoke that the $112 million Inner Harbor East hotel enhances the risk of a city bailout of both the hotel and the convention center.
The state has reason to be concerned as well.
Without a major hotel near the Convention Center, some industry experts contend Baltimore will lose convention business, and the state's $100 million investment in the project could fail to meet the objectives of bolstering taxes and jobs.
"We have to keep in mind that we have to market the Convention Center because of the city's and the state's tremendous investment," said Del. Anne Marie Doory, a Northeast Baltimore Democrat and a member of the state's tourism development board. "The Inner Harbor East proposal might add a whole new dimension to downtown, but it might not be the best site for marketing the Convention Center."
In funding the center's $151 million expansion and renovation, the state projected it would generate direct convention-related spending of $340 million a year, contribute $30 million a year to city and state tax coffers, and produce about 8,000 jobs.
But other legislators said they support the Inner Harbor East proposal, citing many of the same reasons that Schmoke gave in choosing the location over two measurably closer to the Convention Center.
Most notably, Sen. President Thomas V. "Mike" Miller backed Schmoke's decision.
"If the state's financial position were to be adversely affected, then there might be interaction and maybe even intervention," Miller said. "But I think state officials will be hard pressed to second-guess the mayor of Baltimore in this case."
Miller added, "I'm not sure [Inner Harbor East] is the best site, but the mayor has a vision for Baltimore, and I don't think this conflicts with that. The state would feel very comfortable with a four-star hotel adjacent to the Convention Center, but I don't know how we get there from here."
Schmoke said he picked the Inner Harbor East team, led by H&S; Bakery Inc. owner John Paterakis Sr., primarily because its hotel would promote development from Little Italy to Fell's Point and because its site is within the Empowerment Zone, a $100 million federal program aimed at enhancing blighted areas.
In doing so, however, he rejected a BDC staff analysis that ranked a 44-story, $173 million hotel planned for the former News American site on Pratt Street as the best project to benefit the Convention Center.
Pub Date: 4/25/97