Tuesday, August 16, 2005

The Hotel Baltimore

Almost enough ink has been spilt about the new Convention Center Hotel. Since every voice but a libertarian voice has been heard, so for the sake of beating the horse finally out of its misery....

If the hotel is profitable, why is the private sector scared of making money for the first time ever by investing in this hotel? Hotel chains build and run hotels; to quote the young boy at the Passover Seder, why is this hotel different from all other hotels ever? If the hotel is a money loser, but building money losing hotels is a good idea, why not build 25 of them?

If the hotel is a profitable concept, and it turns out that private financing plans are available (which they are by recent reports), why is the city competing with private industry in this field? What's next - the City going into the florist business? how about City candy stores? Would the City like to build restaurants in Little Italy to promote the broader consumption of veal piccata?

The answer, of course, is that City councilmen and the Mayor get political props, such as favoritism for City residents in employment and patronage from the unions who will build and perhaps ultimately operate this municipal experiment in socialist industry models.

Baltimore City has the nastiest personal property taxes and real estate taxes in the State. Theoretically these horrendous rates are due to special needs of an impoverished urban citizenry. Yet the tax rates are driving businesses and residents to the suburbs and the City responds by ... competing with the hospitality industry and the financial sector. Assuming that one believes in heavy taxation philosophically (I don't, but nonetheless), why is this use of City funds better than the same expenditure for criminal prosecution of sexual predators, mass transit development or public school repair? Why not get government out of the way of development, rather than taxing it to death with one hand while competing with it with the other?

If the City really wanted to help development, it would make Baltimore a more attractive place to do business by lowering the insane tax rates and developing the basic transportation infrastructure for residents and tourists alike so that private financiers and investors will stop looking at Baltimore as the little syphillis-and-heroin-ridden-tax-hell that "couldn't." You don't have to be a liberal fanatic to believe that modern urban environments require modern urban transportation systems, and you don't have to be a libertarian wacko like me to think that the City of Baltimore should not go into the hotel and resort business.

-- Bruce Godfrey
Crablaw Maryland Weekly

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