BALTIMORE-The City of Baltimore has just given plans for the construction of a 752-room Baltimore Convention Center headquarters hotel a big shot in the arm with its recent approval of bills to pave the way for the issuance of revenue bonds that will likely be in the amount of $29.8 million for the $305-million project. However, the commission left some leeway for the development, signing off on the potential issuance of as much as $305 million in tax-exempt AAA insured bonds. The long-awaited Hilton Hotel property will be owned by the city; the bonds will be secured by the hotel’s net revenues, a mortgage on the hotel and contributions from the city.

For years, Baltimore city officials have been pushing the idea of building a convention center hotel to make up for a dearth of rooms near the center and to attract even more large meetings to the site. The size of the 26-year-old property nearly tripled to 1.2 million sf under a $151-million renovation in 1997. Plans call for the new Hilton Hotel to be physically connected to the convention center via an enclosed skywalk. Ultimately, in addition to its four-star guestrooms, the hotel will feature 62,000 sf of meeting space, structured parking to accommodate 600 vehicles and open spaces.

The decision to pursue public funding for the project came after the city spent years attempting to secure a private developer. “Baltimore has as strong or stronger hotel market than other cities which have successfully completed a tax exempt financing transaction,” Baltimore Development Corp. project manager Irene E. Van Sant writes in a memo to the members of the BDC board of directors. “The Baltimore market did not decline as much as the rest of the nation after 9/11, and while all major urban hotel markets have experienced downward pressure on room rates [average daily rate or ADR] since 9/11, Baltimore in 2004 has shown upward trends in occupancy and ADR.”

In March, the BDC pre-qualified five firms to submit design-build proposals. The contenders are under obligation to deliver their proposals today, May 9. If all goes as planned, the hotel will likely open its doors sometime in 2008.

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