Monday, August 15, 2005

Baltimore City Council Approves Publicly-Finances Hotel Scheme

This evening, the Baltimore City Council approved the public financing a $305 million city-owned convention center hotel located near Camden Yards with revenue bonds in a 9-6 vote. Councilmembers Branch, Curran, Harris, Holton, Reisinger, Spector and Welch joined President Dixon and Vice President Rawlings Blake in supporting the measure while Councilmembers Clarke, Conaway, D'Adamo, Kraft, Mitchell and Young voted “no.” Passage of the Convention Center Hotel Development District Ordinance (05-0092) thrusts Baltimore into the largest public works project in the city’s history. Council is expected to take a final vote in September, at which point it will be sent to the Mayor.

Approval comes after a heated political battle in which some questioned the wisdom of publicly financing a convention center hotel, pointing to the failure of similar projects in other cities, as highlighted in this weekend’s Baltimore Sun. At tonight's meeting, Councilmember Jim Kraft cautioned that projections of revenue were not trustworthy. Success is "all predicated on the numbers working," he warned. "Be wary of it: the numbers, the projections."

Proponents, including Mayor Martin O'Malley and Council President Dixon, argued that the hotel, to be owned by the City yet operated by Hilton, is a sound investment that will attract convention business. Councilmember Rikki Spector recalled the nay-saying during the 1977 debate over construction of the National Aquarium, noting that the project has since been of great benefit to the City. Vice President Stephanie Rawlings Blake cited an estimation of the hotel's worth at $375 million by 2029.

And then there have been those, notably Councilmembers Helen Holton and Kenneth N. Harris and community activists, who contend that the City should stop pumping money into downtown while residential neighborhoods continue to crumble under the weight of poverty and drugs.

Although opponents continued to oppose and supporters continued to support, those in the last category were the deciding votes by agreeing to a neighborhood revitalization package to the tune of about $72 million. The following projects have been specified:

- Creation of a trust fund that is expected to dish out $59 million for affordable housing over the next five years. The initial deposit will be $10 million from federal Community Development Block Grant funds. The trust fund is in large part due to the lobbying efforts of the BUILD coalition of religious and community leaders.

- Construction of neighborhood facilities, such as recreation centers. Councilmember Helen Holton, who withheld support in the initial Committee vote but supported the proposal this evening, won her District a new gymnasium in Edgewood and a Community Action Center in Edmondson Village

- Hilton will provide $3 million in scholarships over 15 years. The scholarships will be earmarked for city residents studying hospitality and hotel management at Baltimore schools.

- Reimbursements for seniors who spent money to fix housing code violations

- O’Malley agreed to place a bond question on the 2006 ballot which would provide $9 million to renovations of recreation centers

The City also convinced Hilton to adhere to specific guidelines for the 660 hotel jobs. For instance, at least 75% of employees must be city residents, the hotel must try to provide jobs for those with histories in the criminal justice system, and all union employees must be paid a living wage. The construction phase will also create, according to Councilmember Jim Curran, about 300 jobs.

The hotel could very well turn out to be a great asset for the City. If convention business picks up, we will have more visitors eating in our restaurants, shopping in our shops and enjoying themselves in our entertainment venues. In addition, the creation of living wage jobs designated for city residents, including those trying to improve their lives, is a huge bonus.

Yet we at the League cannot help but to be offended at the notion that these community development projects were only possible as part of a compromise to get skeptics to support the hotel proposal. Spending money on neighborhoods shouldn’t be a painful concession for the Mayor and Council President; it should be their top priority, completely separate from the hotel. Agreeing to community development on the condition of hotel approval solidifies the impression among residents that Council is only looking out for business and downtown, often at the expense of neighborhoods.

And there remains unresolved the most under-reported, although most intriguing, aspect of the story: The Baltimore Development Corp., a city-financed entity which meets in secret because it is officially a private organization, submitted the plan, claiming that it could find no offers of private investment. In the weeks since the plan’s introduction, however, numerous private firms have come forth with private investment schemes. These have all been dismissed. Why was Council so quick to dismiss these proposals and why did the Development Corp. hide the proposals to begin with?

from The League: Reassembled with revisions

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