The Saga of O'Malley's Folly May Finally End
Martin O'Malley saddled Baltimore with a white elephant and everybody knew it. Brandon Scott may finally end Baltimore's most expensive mistake.
The most important story in Maryland right now comes from Baltimore and Mayor Brandon Scott:
Baltimore Mayor Brandon Scott said Wednesday he would consider selling the financially beleaguered Hilton Baltimore Inner Harbor hotel, a move that past mayors have ruled out in light of the likely financial loss the city would suffer.
“We are open to anything,” Scott said during a City Hall news conference. “As we move forward with reimagining downtown and looking at how things operate, I’m quite open to someone coming in to operate the hotel and not having the city operate it.”
Scott’s statement came on the heels of a decision Wednesday morning by the Baltimore Board of Estimates to award a $989,000 grant to the city-owned hotel to be used for administrative costs that hotel operators have struggled to pay as it struggles to recover from the pandemic. The grant, which was approved by a 4-1 vote with Council President Nick Mosby voting against the payout, will come from the city’s $640 million allocation from the American Rescue Plan Act, a federal pandemic stimulus program.
This is fantastic news for Baltimore and for Maryland.
For those of you who have not been keeping track, the Baltimore Downtown Hilton Hotel was a legacy of Martin O’Malley’s failed Mayoral Administration that insisted that downtown needed a convention-style hotel even if it meant the city needed to build and own the hotel. Which it did.
I wrote the following about the Hilton in 2013:
The city has lost money on the hotel for years because it could never meet the revenue projections promised by its supporters, something that some enlightened observers predicted in 2005 given its comparison to similar projects in other cities that had been completed at the time. Since then the hotel hasn’t exactly been swimming in profits; just last year the hotel had to withdraw money from their reserve fund in order to pay their bills after running up over $54 million losses since its opening.
That the Downtown Hilton would be a boondoggle was obvious to just about everybody but Martin O’Malley. I wrote this way back in 2005 about the project while it was still in the hypothetical stages:
This in a city that continually runs deficits in its school system. A city where the crime rate remains one of the highest in the country. A city where drug dealers rule many streets. To spend that amount of money on a business venture is nearly criminally absurd.
What makes it more absurd is the failure of other publcily financed projects of similar magnitude in other major cities. As the Sun cites, similar projects in Myrtle Beach, St. Louis, and Sacramento have been built at tremendous costs to the taxpayers, but without the expected benefits in bookings and revenues the city expended.
Everything I wrote about the hotel over 18 years ago was accurate. And all of the problems I listed with Baltimore that O’Malley could have addressed (schools, drugs, crime) are still perpetual problems. Except the city has been stuck plowing millions into the hotel they needlessly built to keep it open.
From this week’s Sun story:
Today, the city still owes $256 million to hotel bondholders as well as nearly $198 million in interest. In 2023, the hotel owed almost $13 million in interest alone. The hotel lost $930,596 in 2021, according to its most recent financial statement, better than the $20 million it lost in 2020.
The city still owes nearly half a billion dollars on the hotel regardless of the sale; that far exceeds the three hundred million O’Malley told the city it would cost. There is almost no chance that the city will recoup that in a sale, so city taxpayers will still be on the hook for huge chunks of financing for a hotel they won’t even own anymore.
And to think Joe Biden trusted Martin O’Malley with your Social Security….
Say what you will about Brandon Scott and his term as Mayor (and there is PLENTY to say). But if he manages to get Baltimore out of the hotel business it would be an unqualified victory for city and state taxpayers alike.