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Mayor: City could lose millions by selling Hilton

The Hilton Baltimore hotel located near Oriole Park at Camden Yards.
The Hilton Baltimore hotel located near Oriole Park at Camden Yards. (Lloyd Fox / Baltimore Sun)

Mayor Stephanie Rawlings-Blake said Wednesday she opposes Council President Bernard C. "Jack" Young's proposal to sell the city-owned Hilton Hotel — arguing the city could lose millions if officials sold now.

"The council president, who raised this idea, he's on the hotel board," Rawlings-Blake said. "He understands that if you sell now, you do it at loss. The unfortunate part about this is we're still talking about this as if it's a real option. ... I'm not interested in having useless conversations about things that don't put real dollars on the table."

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Young this month urged Baltimore finance officials to sell the underperforming hotel to raise money for reaction centers. The proposal is a counter to Rawlings-Blake's idea to sell four downtown parking garages to raise up to $60 million as part of a $136 million plan to fund park, pool and rec center improvements.

Young has not let the mayor's legislation get a vote, saying he wants assurances the recreation plan will include two big new centers, on the east and west sides.

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"I'm looking to put 40 to 60 million actual dollars on the table to build recreation centers," Rawlings-Blake said.

The 757-room convention center hotel, which overlooks the Orioles stadium, opened two years after then-Mayor Martin O'Malley and the City Council authorized more than $300 million in tax-exempt bonds to finance its construction. The measure passed the council by a 9-6 vote with Rawlings-Blake voting in favor, and Young opposed.

Since then, the hotel has underperformed financially. Last year, it reported a $5.6 million loss. Under the deal's initial projections, the hotel was supposed to be making $7 million in profit by now — pumping that money into the city's budget.

Administration officials note the hotel has positive cash flow, but is weighed down by debt on its bond payments and by depreciation. They say the hotel has contributed 400 jobs to the local economy — 80 percent of which have gone to Baltimore residents — and generates about $100 million a year in economic impact.

In 2013, the city hired a consultant to study options for the hotel, and decided not to sell it. The consultant's report called the hotel's finances "markedly improving" and showed projections of increased income over five years. The city could lose $60 million to $90 million if it sold the hotel now, officials said at the time.

Lester Davis, a spokesman for Young, said exploring the sale of the hotel is not a waste of time.

"The council president is focused on the real work of legislating," Davis said. "A host of experts think this is a great idea to explore. The hotel has been bleeding money since its existence." Davis said the mayor's plan to sell parking garages "is not going anywhere. For her to continue to spend energy on it is baffling."

Twitter.com/lukebroadwater

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