(rshsdepot) Amtrak to place hotel in Baltimore Penn Station

["Alexander D. Mitchell IV" <LNER4472_@_bcpl.net>]

http://www.sunspot.net/business/bal-bz.amtrak08feb08.story

Amtrak set to put hotel in station
72 rooms would occupy present upstairs offices; Site ownership in 
question; Oversight panel's report calls for sweeping changes
By Meredith Cohn
Sun Staff

February 8, 2002





Amtrak said yesterday that it will move ahead with plans to build a 
72-room hotel inside Baltimore's historic Pennsylvania Station at a time 
when it may be in danger of losing control of its Northeast Corridor 
real estate.

Whether Amtrak might lose ownership of the local station and others in 
the corridor came into question yesterday after a federal oversight 
panel presented a report to Congress that called for sweeping changes in 
the operations of the nation's passenger railroad.

The panel, called the Amtrak Reform Council, has been advising Amtrak on 
how it might improve service and wean itself from federal subsidies, 
which have amounted to billions of dollars since its inception in 1971. 
The panel reported that Amtrak could not fix itself and others should be 
given an opportunity.

Several congressional committees have begun pondering the report, which 
calls for creation of a federal agency to set policy and oversee two 
government corporations. One corporation would conduct train operations 
and one would own and maintain the real estate in the Northeast Corridor 
- - including Penn Station. Competition for passenger rail service would 
eventually be introduced.

Such changes would require legislative approval - and the proposals in 
the council's report could be altered or rejected.

A spokeswoman says Amtrak would move ahead with its own cost-cutting 
measures, possibly eliminating long-distance routes outside the 
Washington-Boston corridor, but that it plans to honor all of its real 
estate deals in the meantime.

Amtrak signed an agreement with a local developer to build a moderately 
priced hotel in Penn Station that would open in 2003 in the second-, 
third- and fourth-floor offices.

"We are proceeding as normal. There is an agreement in play," said 
Amtrak spokeswoman Cecelia Cummings. "The ARC plan has not been 
finalized. It's in the hands of Congress."

Cummings acknowledged that the air of uncertainty could lead some of 
Amtrak's business partners to question their relationships with the 
railroad. Some may face difficulty obtaining financing for development 
projects because changes at the railroad could come in the middle of the 
construction process, she said.

Amtrak had sought a developer for a hotel at Penn Station about two 
years ago after looking for ways to use its assets to increase revenue. 
The arrangement with Columbia-based James M. Jost & Co. Inc. would be 
the first of its kind in the Northeast Corridor, the railroad's busiest 
with 13 million people riding in the last fiscal year.

Amtrak also plans to build a hotel near its station in Philadelphia.

Jost expects to begin construction inside the station on a moderately 
priced, $5 million hotel next summer and spend a year converting the 
offices to guestrooms. The 72 rooms will be accessible from an elevator 
in the station's lobby.

"We're diligently working with Amtrak to relocate people," said James M. 
Jost, the company's owner.

About 100 police, customer service and maintenance workers will have to 
be moved to other Amtrak offices to accommodate the construction.

Jost would own the hotel and lease the space from Amtrak, provided the 
economy and financing troubles do not crush the project, and a hotel 
brand is found for the facility.

But Amtrak may not be the landlord once the hotel is built. The 
oversight panel concluded that the railroad should not own real estate 
and other assets.

"Amtrak has proven that it cannot focus effectively on its core mission 
of running trains and running them well," said ARC chairman Gilbert E. 
Carmichael in the report. "And under current law, there is no one who 
can hold the railroad accountable. Amtrak has too much to do and does 
little of it well.

"In addition, the council believes separating the Northeast Corridor 
infrastructure from Amtrak's trains operating company is a must. Owning 
the Northeast Corridor is not good for Amtrak's financial statements and 
the Northeast Corridor is not benefiting by being owned by Amtrak."



Copyright =A9 2002, The Baltimore Sun

------------------------------