Mayor seeks hotel deal Compromise is goal as Schmoke meets with two developers; Smaller Wyndham possible; Adding Paterakis to Hyatt team with Angelos is considered


Mayor Kurt L. Schmoke is quietly attempting to broker a compromise between Peter G. Angelos and John Paterakis Sr., the two developers competing to build huge, publicly subsidized hotels on opposite sides of downtown.

The mayor met privately yesterday with Paterakis, a baking mogul who wants to build a 750-room Wyndham at Inner Harbor East, a day after meeting with Orioles owner Angelos, who has proposed an 850-room Grand Hyatt on city-owned land across from the Baltimore Convention Center.

Sources said the mayor hopes to bring the two developers to the negotiating table in coming days to strike a deal. The talks have centered on possibly scaling back the $137.6 million Wyndham, approved this week by the mayor and the Baltimore Development Corp., or making Paterakis part of the team developing the Hyatt.

Schmoke, who said at least twice this week that he hoped to bring the developers together to avoid glutting the hotel market by building too much too soon, declined to comment on specifics toward that end yesterday.

"We're in good shape. We have a wonderful [Wyndham] plan we've been working on," he said. "We're moving ahead, and we see a lot of progress."

The president of Atlanta-based Stormont Trice Development Corp., Paterakis' partner in the Wyndham deal, said yesterday that neither a compromise nor a scaling back of the hotel would be prudent.

"If two hotels get built at the same time, it would not be good for Baltimore," said Donald R. Trice, the company's president. "The BDC resolved to space the two out, which is the only thing that's prudent so that the market doesn't get flooded.

"If a thousand rooms are to be built downtown and a compromise is fashioned that calls for two 500-room hotels, I think neither would be good for the city," he said, adding that he was unaware of yesterday's meeting between the mayor and Paterakis.

Paterakis could not be reached yesterday. Angelos declined to comment on his hourlong meeting with the mayor, except to say, "We had a long, friendly and candid discussion."

Schmoke's private meetings with the two developers came amid increasingly vehement opposition to his decision to proceed with the Wyndham and put off development of the Grand Hyatt and pressure from state lawmakers to reconsider.

As the BDC, the city's economic-development agency, approved the Wyndham proposal Monday, it also voted to delay the opening of a hotel across from the Baltimore Convention Center until at least 2002. And Schmoke, who initially supported that timetable, has since said that a final decision would await meetings with the two developers.

Business leaders, city and state lawmakers, and heads of tourist attractions have said that not building at Angelos' proposed site would mean disaster for the Convention Center, expanded at a taxpayer-financed cost of $151 million but facing a decline in bookings through 2001.

The potential compromise comes amid several important changes in the Wyndham proposal. For one, the hotel is likely to rise 44 stories above Inner Harbor East and Little Italy, instead of the 27 stories originally proposed. At the same time, the hotel's price has risen from $112.2 million to $137.6 million, and the public financing requested has risen to $57.7 million from $42.1 million.

Even with the blessing of the mayor and the Baltimore Development Corp., construction of the Wyndham is by no means assured. The Paterakis team is seeking $19.6 million in parking revenue bonds that are subject to the approval of the City Council and $17.5 million in other bonds that would have to go to voter referendum, as well as $10 million in state loans.

Howard P. Rawlings, chairman of the House Appropriations Committee, said yesterday that the mayor would face an extraordinarily tough road in Annapolis in seeking subsidies or other necessary approvals, such as the city's planned request for a change in the state law that requires a voter referendum for the $17.5 million in bonds.

"I think it's virtually impossible to achieve any sort of state subsidy or any other legislative approval on the Paterakis project, given the strong public opposition from various quarters," said Rawlings, a Baltimore Democrat who was among the first to oppose the Inner Harbor East site.

"There's just a sentiment that this is not in the best interest of the Convention Center among the leadership and the rank and file."

Rawlings called on Schmoke this week to convene the meetings with the developers "to sit down and agree upon a win-win strategy for the city and the state to address this very important issue of a Convention Center headquarters hotel for Baltimore City that will have broad public support."

The mayor's meeting with Paterakis yesterday came a day after the 41-member Republican caucus of the Maryland House said it would oppose any legislative action required for construction of the Wyndham because it is so far from the Convention Center.

Some of Maryland's wealthiest and most influential power brokers, including author Tom Clancy, philanthropist Harvey M. Meyerhoff and David Bernstein, chairman of Duty Free International, lined up in support of the Grand Hyatt, pledging to invest millions in the proposed $150 million hotel.

"Peter didn't call me; I called him, and I did it for the good of the city and the state, as I did when I invested with Peter to keep the Orioles in town," said Meyerhoff. "You have a mayor that's making a decision here that's going to do irreparable harm. So far, the mayor hasn't heard that message. But I think he's making a horrible mistake."

Annapolis lawmakers have grown increasingly insistent that the mayor proceed quickly with a hotel on the city-owned lots near Oriole Park and the Convention Center.

"We've got to make sure that this thing is in every way successful, and putting the hotel a mile away from it is not the way," said Del. Robert H. Kittleman, the House minority leader from Howard County. "We've got to protect the state's investment in the convention center."

Kittleman, a Republican, pointed out that the state has spent $114.1 million for the recent expansion and renovation of the Convention Center and has agreed to pay for two-thirds of its operating deficit through June 30, 2008.

That amounts to about $2.2 million a year now but could climb steeply because of the expected drop-off in bookings. Forty-one major conventions are booked for this year, but the number falls to 14 for 2001.

Kittleman said Republican members of the House Appropriations Committee, after a visit to the Convention Center and other possible hotel sites this year, asked the caucus to take a stand against putting any state money into the site. The caucus voted Thursday to oppose state funding for the Paterakis site.

"The best time to kill these things is when they're starting out," he said.

Republicans are in the minority in Annapolis, but their 41 votes in the 141-member House are significant, particularly if coupled with those of Democrats -- conservative and otherwise -- who think the state has done enough for Baltimore.

Pub Date: 7/05/97

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