A consultant came to Baltimore two decades ago with a warning for the City Council: Do not miss this opportunity.

Then-Mayor Martin O’Malley was pushing an unusual proposition for a city-owned parking lot in downtown. He wanted Baltimore to borrow more than $300 million in bonds and finance the construction of a convention center hotel, which the city would then own.

Some council members felt queasy. Why was Baltimore getting into the hotel business? Couldn’t it find a private developer for this deal? At one contentious hearing, the elected officials got reassurance from Robert Swerdling, a consultant whose job was to facilitate the sale of government bonds to finance hospitality projects.

“The city’s taking the risk,” Swerdling told the City Council in 2005, according to The Baltimore Sun. “Should it reap the profit, or someone else?”

Since then, Baltimore has sowed and sown and sown. But it has not reaped.

A review by The Baltimore Banner of financial records dating back to its opening in 2008 shows that the Hilton Baltimore Inner Harbor has not made a single payment to the city’s general fund. Instead, Baltimore has spent and refunded $143.7 million to keep the hotel afloat.

And last year was one of the costliest on record, according to a report released last month. It shows that Baltimore contributed $15.7 million to the hotel, including $7.7 million in direct appropriations.

Before the shovels hit the ground, supporters said a new hotel was needed to drive business at the city’s Convention Center. Critics warned it was too risky.

“They made a disaster of this whole thing,” then-Comptroller William Donald Schaefer, a former Baltimore mayor, told The Sun in 2005. “It’s a bad deal. It should be financed privately.”

After a lot of political wrangling, the City Council approved a plan to borrow $301 million and finance the hotel’s construction.

The city would own the hotel through a new nonprofit. That nonprofit would be overseen by the Baltimore Development Corp., a quasi-governmental agency. Hilton Hotels would operate it.

In 2006, as Baltimore prepared to borrow $301 million, Swerdling, a bond underwriter at Piper Jaffray Hospitality Group, made revenue projections based on reports from other consultants.

The prediction: The Hilton Baltimore Inner Harbor would be so successful that not only would it repay the debt, but it also would pay millions of dollars annually into the city’s general fund, totaling $39.1 million by 2024. And those annual payments would be on top of tens of millions of dollars in taxes paid by the hotel.

The reality: The 757-room hotel opened in 2008 during the Great Recession and immediately started losing money.

To keep the hotel afloat, the city’s first line of defense was to refund property taxes paid by the hotel. When that wasn’t enough, it refunded the hotel occupancy taxes. Then, when the COVID-19 pandemic hit in 2020, Baltimore started giving money directly to the hotel from its general fund and from federal pandemic relief funds.

All along, the Baltimore Development Corp. has provided in-kind services to the hotel, including office space and administrative work.

Otis Rolley, who became president and CEO of the Baltimore Development Corp. on June 23, said in a statement that he will be reviewing the Hilton’s operations as well as numerous other deals the BDC oversees.

In the past, Mayor Brandon Scott and other city leaders have asked whether Baltimore could sell the hotel. However, the hotel’s outstanding debt would likely make that an expensive and tricky option.

The city refinanced the hotel’s debt in 2017, pushing its expected repayment to 2046. The hotel owes about $242 million, plus an expected $172 million in interest.

O’Malley did not respond to requests for comment.

Today, Swerdling is mostly retired and living in Colorado, though the 72-year-old said in a phone interview that he still does some consulting work.

From time to time, Swerdling said he has been asked to revisit a project he consulted on years ago and determine whether it was successful. The analysis is complicated, he said, and the answer can be messy.

It’s never as simple as whether a project is making a profit or losing money, he said. Convention center hotels, like the one in Baltimore, have a variety of benefits that aren’t readily apparent when reading a balance sheet.

These hotels bring more business to the city, Swerdling said, and increased tourism means more business for all hotels. Visitors spend money on food, gas and attractions, all of which generate tax revenue for the city and state.

If the city had sold that parking lot to a private developer, the private developer would have demanded some kind of taxpayer incentive, Swerdling said, and that too would be ripe for criticism.

When asked about his statement before the Baltimore City Council — and his projections that the hotel would pump millions of dollars into Baltimore’s general fund — Swerdling said it was unfair to “surprise” him with questions about a project from 20 years ago.

However, he then paused and reflected on his own role in convincing city leaders that the Hilton Baltimore Inner Harbor hotel was a good idea.

Swerdling had spent his career crisscrossing the country, consulting on public financing in cities like Denver, Austin and Omaha. As a bond underwriter, he made money by facilitating the sale of government bonds to investors.

Without prompting, Swerdling said he did have a “profit incentive in mind” when speaking to Baltimore City Council.

“Did I lie? Did I stretch the truth? I don’t remember,” he said. “I believe that I’ve always been a good government analyst. I believe that the property was successful in its own way.”