As Baltimore's economic development agency entered final contract negotiations yesterday for the Wyndham Hotel at Inner Harbor East, the most significant sticking point centered on whether the city will allow a second huge hotel to open before 2002.
Roger C. Lipitz, Baltimore Development Corp. chairman, and other sources familiar with the development agency's negotiations said the timing of a possible competing hotel emerged anew as a key issue only in recent days.
The reason: Mayor Kurt L. Schmoke rejected the BDC's recommendation to delay opening until 2002 any hotel on city-owned land at Camden Yards. There, Orioles owner Peter G. Angelos has proposed a Grand Hyatt that would be linked by walkway to the expanded Baltimore Convention Center.
"There is no doubt that this it is the hardest of the remaining issues to find a middle ground on because it's so objective in nature," Lipitz said.
But, while some sources suggested the negotiations could collapse over the timing for a second hotel, Lipitz said he's hopeful the two sides could reach agreement.
The Wyndham team, assembled by baking magnate John Paterakis Sr., had sought to delay opening any hotel at the Camden Yards site until at least 2003. It settled on a 2002 date, which the BDC board recommended when it voted to move ahead with the project June 30.
The development group, sources said, had expressed fears that without the negotiated delay, the 750-room, 44-story Wyndham would suffer because of a glut of rooms and that a Grand Hyatt rising across town might scare off would-be Wyndham financiers.
Tom Lattin, president and chief operating officer of Patriot American Hospitality Inc., which would fully own the $137.6 million Wyndham six months after its planned opening in 2000, met privately with top city officials here yesterday.
Lattin, whose Dallas-based real estate investment trust is buying Wyndham Hotel Corp., declined comment through his office. Paterakis did not return repeated phone calls.
Schmoke, through a spokesman, also declined to comment.
Lipitz said the BDC is scrambling to get a contract to the mayor-controlled Board of Estimates by Wednesday. Though he viewed the timing issue as the central focus, two other "significant" questions remained, he said.
One provision would require the Wyndham to function as a convention center hotel -- by an agreed-upon definition, likely to focus on making available upon demand as many as 600 rooms.
Defaulting could require the Wyndham team to return tens of millions in city subsidies.
Another important question will be answered with a city appraisal of the Inner Harbor East land's value. Differences between Wyndham's $7.5 million estimate and an independent appraisal could force a reconciliation resulting in a reduction in subsidies.
BDC approved the Wyndham with a final price $25 million higher than the original proposal, and requested $15 million more in public subsidies. But the team, at Schmoke's urging, has since dropped a $10 million request for state loans.
In contrast to Wyndham's reported, yet not publicly stated, fears of overbuilding, the Hyatt team said yesterday that it would move ahead -- and even welcome the prospect of opening simultaneously because it is confident its $150 million, 850-room hotel would thrive in direct competition with the Wyndham.
"We are not fearful; Hyatt's not fearful," said Tom Marudas, an associate of Angelos. "We would go forward whether they do or not; we would go forward even if we opened at the same time."
Marudas said Schmoke had assured Angelos late last week that the unsolicited Grand Hyatt proposal, if approved, would face no time constraints on development or opening. But that contradicts what the mayor said at his weekly news briefing last Thursday: that the opening of the two hotels would have to be separated by enough time to avoid a glut.
Even if the Wyndham wins Board of Estimates approval, the project faces huge hurdles. Some $17.5 million worth of bonds issued with the expectation that increased property taxes generated by the project would cover the debt must be approved by city voters in November 1998.
The city is seeking a change in state law to circumvent the requirement, but legislative leaders in Annapolis call that prospect unlikely. Awaiting the referendum could delay the hotel's opening until 2002 at the earliest.
The City Council, which reconvenes in the fall, would have to put the "tax increment" bonds on the ballot and overhaul an Inner Harbor East master plan 10 years in the making to allow the 44-story Wyndham.
Pub Date: 7/17/97