|By Lorraine Mirabella, The Baltimore Sun
Knight Ridder/Tribune Business News
Mar. 14, 2006 - Amtrak has revived a plan to open a boutique hotel inside Baltimore's historic Penn Station, which would be a first in an Amtrak-owned station.
The passenger rail operator is negotiating with a developer to create a 72-room hotel on three levels at the station, Amtrak spokesman Cliff Black said yesterday.
The national rail service is struggling with declining revenues and operating losses that are exceeding $1 billion annually and are projected to grow by 40 percent within four years, according to the Government Accountability Office. Amtrak, which has relied on Congress to subsidize its operating losses, has been under pressure to improve its financial operations.
"It makes sense for us to make the best use of our properties, to help supplement our passenger rail income, and real estate is one way we can do that," Black said.
The upper floors of the station, once used as offices for Amtrak police, customer service and maintenance workers, are vacant, Black said. Baltimore's Penn Station is Amtrak's 10th-busiest.
The negotiations with an unnamed developer also include some redevelopment of the station's main floor for shops, he said. The hotel would encompass about 40,000 square feet, he said
Amtrak planned a hotel there about four years ago and had agreed to a deal calling for Columbia-based James M. Jost & Co. Inc. to construct a moderately priced $5 million hotel.
Jost would have owned the hotel and leased the space from Amtrak. The agreement was contingent on arranging financing and finding a hotel brand.
Black said he did not know what derailed those earlier plans. James M. Jost, the company's owner, could not be reached.
One analyst said yesterday that he suspected the earlier project had difficulty attracting financing and a hotel brand.
"The location is a little off," said Rod Petrik, a Baltimore-based managing director and hotel analyst at Stifel Nicolaus & Co., which acquired Legg Mason's investment banking, research and trading operations. "That location certainly is a little way from the center of Baltimore, at least the business community and the convention market."
But he said a hotel could get overflow business if hotels in the central business district are full.
"My issue with a boutique hotel is, is it going to be something unique or are you doing a boutique because you can't get a flag?" Petrik said. "The question is, can you make it unique enough, quirky enough to attract people to stay there?"
Kirby Fowler, president of the Downtown Partnership, said the timing is better now for a Penn Station hotel, especially with residential development and redevelopment growing in the neighborhoods around Penn Station.
The neighborhoods of Charles North and Greenmount West, and part of Barclay, have been included in the Station North Arts and Entertainment District, a state designation designed to promote revitalization and encourage arts and entertainment uses.
Plans call for converting into housing a former city Housing Authority building that sits over the rail line near Penn Station.
Another development group plans to transform the former Chesapeake Restaurant and an adjacent parking lot at Charles and Lanvale streets into a mixed-use urban renewal project with shops, restaurants, an art gallery and subsidized artists' lofts. It also would include a 91-unit condominium tower behind the former restaurant and 11 townhouses.
And Somerset Development Co. is building luxury townhouses called Station North a block north of Penn Station on North Calvert Street.
"There's a nice ribbon of positive development activity along the Amtrak line just north of Mount Vernon, and the hotel fits right in that ribbon," Fowler said.
A hotel at Penn Station, he said, might attract business from parents of college students at the nearby University of Baltimore, which is expanding this year from a two-year college to a four-year program, and Maryland Institute College of Art.
"More and more people are using the MARC line, as well as Amtrak, and ... this project would fit well into the goal to have more transit-oriented development," which typically includes a mix of development uses around mass transit, Fowler said.
Black said he had no timetable for the current project and no details on whether Amtrak or a developer would own the hotel.
"Amtrak real estate is working on this, and they're in negotiations, and we don't want to get ahead of that," he said.
Copyright (c) 2006, The Baltimore Sun
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