As deadline nears, private talks guide public hotel project

THE BALTIMORE SUN

Behind closed doors, officials at the Baltimore Development Corp. are about to make critical decisions on where to build and how to finance a public project considered key to Baltimore's economic future.

Three development teams in a high-stakes contest to build Baltimore's convention headquarters hotel have had private meetings in recent days with city development leader M.J. "Jay" Brodie, president of the BDC, and his staff.

A publicly financed, $250 million hotel appears likely to be built by 2006 by one of the teams on two blocks just west of the Baltimore Convention Center and just north of Oriole Park at Camden Yards, on land bounded by Pratt, Howard, Camden and Paca streets or on a parcel west of the Sheraton Inner Harbor hotel on Conway Street.

Although there is much agreement on the need for a new anchor hotel to help resuscitate Baltimore's flagging Convention Center, there has been no public debate on what form that project should take.

Instead, key elements of the deal are being decided by handfuls of people in closed meetings.

Brodie has asked the developers to deliver their "best and final offers" by Friday. Soon after that, Brodie's group is expected to give one developer exclusive rights to negotiate a deal on the hotel with the city.

The three proposals - originally submitted in February and including hotels ranging in size from 750 to 869 rooms - come from development teams led by Robert L. Johnson, the billionaire founder of Black Entertainment Television; actor Will Smith, whose wife, Jada Pinkett Smith, is from Baltimore; and Otis Warren with a largely local group whose architect designed the Baltimore Marriott Waterfront hotel.

BDC officials have all but ruled out private financing - even though at least one of the teams had proposed it - telling developers they favor a plan for the hotel that will be city-owned and publicly financed.

BDC also has stripped away elements that make competing proposals unique and insisted that developers include in their plans an office building and parking for Catholic Relief Services, the international assistance agency that has talked about leaving Baltimore.

The Johnson team has expressed willingness to share the development site with the international aid agency, but that obligation was not included in the BDC's request for bids, and the developers weren't notified that it was a requirement until about a month ago.

The BDC is also expected to rule on how the new hotel with its many visitors would relate physically to neighboring Camden Yards, the Convention Center and nearby commercial districts.

And the BDC will do it all without holding public hearings, forums or debate.

"There were decisions made upfront that eluded public discourse, and it is at least questionable how they came about," said Klaus H. Philipsen, co-chair of the urban design committee of the American Institute of Architects, Baltimore chapter, which sponsored a forum on the proposals in April because no public hearing was planned.

"Now BDC is eliminating certain options. There's a lot of stuff happening behind closed doors. There's no public buy-in; there's no real rational examination of alternatives."

Philipsen said he would have preferred a two-step process that separated the site decision from the design.

Even highly placed public officials know little about what has been decided.

"BDC has a habit of doing this," said City Council President Sheila Dixon. "I'm disappointed that they haven't kept us more informed on this because of the magnitude of it. I don't like being kept in the dark."

Dixon said she was unaware that all of the developers had been asked to include space for the Catholic Relief headquarters or that the BDC had asked them to assume that the hotel would be owned and financed by the city.

"The BDC seems to be determining a lot of these things," she said. "I'm wondering why we're even getting in the business of owning a hotel. My feeling at this point is whatever proposal that doesn't require the city to put out a whole lot of money and have ownership, that's the better way to go.

"I'd like to know before you make that decision. I could give my input."

Dixon said she doesn't understand the rationale for the Catholic Relief office space either.

"This is the first I'm hearing about it," she said. "I'd love to keep them in the city, but they don't pay taxes."

Dixon said she has asked BDC officials for a briefing on all three proposals.

Councilwoman Catherine E. Pugh, who is challenging Dixon for her council president job, also said she was not aware that developers had been asked to include the office space for Catholic Relief or to pursue public financing.

"I'm a big proponent of public hearings," Pugh said. "I'd like to make sure if we're going to bring the process down to where we're looking at public financing that there is public input."

Mayor Martin O'Malley declined to be interviewed for this article.

"It's not appropriate for the mayor to comment, given that it's an open competition and a decision has not yet been reached," said Raquel Guillory, the mayor's press secretary.

Typically, major city projects such as a convention anchor hotel are debated from the start at public hearings, in open discussions at planning and zoning board meetings, and at City Council sessions, national development experts say.

"If it comes to choosing among developers with different plans, if there isn't a public hearing, you have no idea formally what it is that is leading the decision-makers to making that choice," said Heywood T. Sanders, professor of public administration at the University of Texas at San Antonio and an expert on convention center development.

Political agenda?

"In the absence of laying out all the details of the competing proposals and the logic of choosing one, you have no idea what's going on. You have no idea if it's a choice based on informed criteria or if it's perhaps based on political favoritism.

"And the issue with Catholic Relief makes very clear that a political purpose is being served. What you're doing is taking two purposes that aren't necessarily related and tying them together for someone's political end."

Brodie said that the decisions being made to winnow the proposals down to one are highly technical and that there will be plenty of time for public scrutiny and questions once there is a final choice. Meanwhile, the public is free to write or e-mail comments on the planned hotel to his agency, Brodie has said.

"There are still lots of things we need to discuss with each of the teams, including financing and design and other aspects, and we'll be doing that," Brodie said recently.

Experts agree that there are reasons for caution in revealing too much information at this stage. The selection is competitive and could be compromised if too much proprietary information were revealed about individual proposals.

A selection committee charged with examining the proposals has met twice since spring and has not been asked to rank the proposals or make any recommendations, according to two of its members. The group was not present for the recent meetings with developers. But a meeting is being planned during the next week to discuss financing.

That committee includes Brodie; Donald Fry, president of the Greater Baltimore Committee; Clarence Bishop, chief of staff for O'Malley; Owen Tonkins, director of the city's Office of Minority Business Development; Barbara Plantholt Melera, president and chief executive of Triad Investors Corp.; and Jay Wilson, general partner of Spring Capital Partners LP.

The three proposals the BDC is considering include Johnson's plan for a 750-room Hilton hotel, an unsolicited proposal announced with fanfare at a City Hall news conference in November.

Neither Johnson nor representatives of his team have returned phone calls seeking information on their bid.

Two alternative ideas are being offered by a second team made up of local developer Otis Warren, Willard Hackerman, head of Whiting-Turner Contracting Co., who controls the Sheraton Inner Harbor and a neighboring parking lot, and Baltimore architect Peter Fillat, who designed the Baltimore Marriott Waterfront hotel, among others.

That group has proposed building a 755-room Westin on the city-owned site next to the Convention Center, financed through tax-exempt municipal bonds. The group's second option would be to put a new arena there and the convention hotel on Hackerman's parking lot.

"We're honored to continue to compete for this and to respond to the city's process of evaluating the best options," said Ray Garfield, a principal in Dallas-based Garfield Traub Development LLC, which is heading that local group. It calls itself the Believe Team. "It's one of the most exciting potential developments in the country."

The third proposal is from Atlanta-based Portman Holdings LP teamed with Treyball Development Inc., a Beverly Hills, Calif.-based real estate company headed by actor Smith and his brother Harry. One of the nation's largest convention hotel builders, with 11 such projects in some of the largest U.S. markets, Portman proposed an 869-room hotel, a soundstage, a wellness clinic and spa on the city-owned site.

"We've been asked by the BDC to redesign our project eliminating the film studio and to accommodate the Catholic Relief Services building, which we are working diligently to do," said Roger Zampell, a principal with TreyPort Ventures. "We're sad to see the film studio go, but if that's what the economics dictate, so be it."

Bishop, O'Malley's chief of staff, chairman of the Baltimore Area Convention and Visitors Association and a BDC board member, said that BACVA has recommended that the hotel have at least 750 rooms and that a significant number of them be available to the convention bureau to sell as large blocks of rooms.

Selecting a developer for the hotel has been anything but smooth.

It has been difficult for some developers to determine what Brodie's team is looking for, to address possible public concerns and to state their cases as strongly as they would have liked, sources close to the developers said.

Only recently - with Friday's deadline looming for their final offers - were the teams told of the financing and office-space requirements.

At least some key stakeholders in the city seem to have been largely left out of the process.

"There hasn't been a lot of involvement so far," said Ronald M. Kreitner, executive director of WestSide Renaissance Inc. "There's a breadth of west-side interests that could be brought to the table in a number of ways that could add perspective, and it hasn't happened, to my knowledge."

Look at all options

Area leaders and industry experts say any offer of private financing should be examined as an option.

"If you've got someone who's coming to you and showing you private financing, I think you have to look at it," said Fry, the GBC president. "But just because someone has the private financing, they may not have the best overall proposal, particularly when the BDC is saying they're willing to consider other alternatives in financing. It's not automatically the best deal."

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