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Rawlings-Blake skeptical of Hilton sale proposal

The Hilton Baltimore. (File photo)

The Hilton Baltimore. (File photo)

Mayor Stephanie Rawlings-Blake is happy to consider a plan to sell the city-owned Hilton Baltimore but believes there are significant hurdles to that actually happening, according to a spokesman.

On Monday, City Council President Bernard C. “Jack” Young submitted a resolution calling for a hearing to examine selling the financially troubled hotel to pay for building new recreation centers. Howard Libit, a spokesman for the mayor, urged Young to instead give a hearing to an administration bill that would fund recreation center construction by selling city-owned garages instead.

“Apparently if we sell [the hotel] before September ’16 there would be some kind of large penalty, and it’s not clear we would make money on the deal. I haven’t seen any financials yet, and if there’s the potential for us to lose money that doesn’t really provide funding for recreation centers,” Libit said.

The 757-room Hilton was completed in 2008 and has been touted as a major factor in increasing the amount of conventions in Baltimore. But so far the project has lost more than $70 million since it opened. A large part of the cost comes from paying off more than $300 million in general revenue bonds issued to build the hotel.

“We have an opportunity to turn around what has for years been a money-losing deal for the taxpaying citizens of Baltimore,” Young said in an emailed statement. “Instead of booking hotel rooms, the city should focus its energy and resources on providing our young people with opportunities to thrive and grow academically and socially. We don’t have any business running a hotel, but every obligation to make sure that our young people have access to world-class recreational opportunities that will keep them positively engaged and help prevent juvenile delinquency.”

In his announcement of the legislation Young listed the support of two local economists Stephen J.K. Walters, a professor of economics at Loyola University Maryland, and Dennis C. Coates, a professor of economics at the University of Maryland, Baltimore County, for selling the hotel to a private operator.

But Libit argued that having the hotel controlled by the city provides more flexibility in setting aside blocks of hotel rooms to accommodate the needs of a convention.

“Because of the city’s control, the city is able to say if they want a block of rooms for a convention even if the hotel has something else; they’re able to prioritize and move things to accommodate any kind of citywide convention they want to bring in,” Libit said.

About Adam Bednar

Adam Bednar covers real estate and development for The Daily Record.