City must help cover Hilton’s debt payments (The Baltimore Sun) – 28 Feb 03:00

City must help cover Hilton’s debt payments (The Baltimore Sun) – 28 Feb 03:00

By Luke Broadwater, The Baltimore SunMcClatchy-Tribune Regional News

Feb. 28–The city will be forced to dip into its general fund for $1 million to help the city-owned Hilton Baltimore make debt payments this year, city officials said Wednesday.

Harry E. Black, Baltimore’s director of finance, said the hotel needs the money to make payments in March and September. The Hilton is expected to contribute $2.8 million in taxes this year from the hotel occupancy tax to the general fund, so the hotel is drawing from money it created, he said.

“I expect it’s going to be an ongoing thing for a period of time,” Black said. “The key is navigating through this recession. … The key is to find a way to ride it out until the recovery gets to a point where there are calmer seas.”

Even though the hotel is having trouble covering its debt, Mayor Stephanie Rawlings-Blake said the Hilton generated $100 million in economic impact for Baltimore in 2012.

The city-owned hotel lost nearly $11.5 million in 2011 — about $400,000 more than it lost the previous year, according to an audit released last May. Last February, after the Hilton experienced several slow months, the Baltimore Hotel Corp. withdrew nearly $4 million from a $12.4 million debt-service reserve account to make a semiannual bond payment in March, the audit showed

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