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Editorial

Buddy, can you spare $16 million for a convention hotel? | COMMENTARY

The city of Baltimore built the 757-room Hilton Baltimore hotel a decade and a half ago, creating a unique city-owned corporation and borrowing $300 million in bonds to fund its construction.
The Hilton has struggled to turn a profit under the crippling weight of its debt. After refinancing the bonds in 2017, the hotel continued to perform below projections but after COVID hit, the hotel has been bleeding money. (Kenneth K. Lam/Baltimore Sun).

The latest news regarding the city-owned Hilton Baltimore Inner Harbor, the 757-room convention hotel on West Pratt Street, is the kind of thing that drives the average city taxpayer wild. The Hilton has been a money-loser for most of its history dating back to its opening 14 years ago, and the COVID-19 pandemic has only made matters worse — as it has for the hospitality industry in general. The bottom line? At least $16 million has gone toward keeping it afloat for the last two years so as not to default on its bond payments. A lot of folks who questioned whether this was an appropriate public investment back when the Baltimore Development Corporation was soliciting bids two decades ago are likely feeling vindicated. Should time travel ever be invented, one can envision the line of naysayers seeking to warp back all those years and warn then-Mayor Martin O’Malley that there might be better ways to use $300 million or so in borrowed money than to build a convention center hotel.

Yet, here it stands in 2022. And so, bemoaning the city’s largest-ever public works project does one absolutely no good. The question to ask is not how to relive the past, but what to do about the future. And that’s a subject that gets a lot more complicated.

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First, let’s remember why the hotel was built in the first place. It was clear that the state-supported Baltimore Convention Center wouldn’t fare well if the downtown lacked an appropriately-scaled convention hotel to support it. The private sector wasn’t lining up to take that risk without public financing. The city had little choice unless officials were willing to sacrifice the convention trade. And why do that? A lot more than $300 million would be lost if the city could no longer attract conventions and tourists. Indeed, there was an expectation of further investment — not only in the convention center but in replacing the Baltimore Civic Center (formerly the Royal Farms Arena and 1st Mariner Arena, and now simply Baltimore Arena). Only recently did work begin on $200 million in upgrades to the 60-year-old arena, but it won’t result in the 19,000-seat major events magnet discussed a generation ago.

Meanwhile, the central business district has suffered further economic setbacks. The development of glitzy Harbor East as an alternative to Charles Center and other central office towers, the cancellation of the Red Line, the diminishment of Harborplace and related downtown shopping, the Freddie Gray unrest and, of course, the pandemic surely contributed to the district’s woes. Yet, here’s something else to keep in mind: Baltimore’s downtown isn’t done yet. For all the recent problems, there’s still a lot to be excited about here — a point underscored by successful recent events like the Paul McCartney concert and the Maryland Cycling Classic, which drew amazing crowds. The development of downtown luxury condos and apartments like 414 Light Street, the planned redevelopment of Harborplace, the transfer of thousands of state employees from soon-to-be-shuttered State Center office complex, all bode well for the future.

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Yet here’s what’s missing at the moment: A plan about what to do about the convention center and the Hilton. Realistically, what is the potential here? How can we best make use of these existing assets? Is greater investment required, and, if so, exactly what could help Baltimore attract future meetings and events? That would require a thorough analysis by qualified researchers.

Frankly, our money is on the likelihood that the convention center needs an upgrade, and that’s where the next governor comes in. Improvements have been on the drawing board since 2016, but they have gone nowhere under Gov. Larry Hogan. Meanwhile, popular conventions like Otakon, an annual celebration of Asian pop culture, have chosen to bypass Baltimore in recent years because the center is too small, and its facilities aren’t adequate. And so the question isn’t just about how much money is going out the door to pay for the Hilton’s bond payments, the just-as-important question is: How much is not coming in the door because not enough investment has been made to accommodate the lucrative convention trade? Baltimoreans deserve an honest and well-informed answer. And Maryland’s next governor and General Assembly, along with city government, the Maryland Stadium Authority, the Greater Baltimore Committee, the Downtown Partnership of Baltimore and other interested parties should work together to formulate a viable long-term plan.

Baltimore Sun editorial writers offer opinions and analysis on news and issues relevant to readers. They operate separately from the newsroom.


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