When Baltimore City sold the Paramount Hotel at a multimillion-dollar loss to a developer to bolster growth on the city’s faltering west side, the deal drew criticism as a government giveaway.

But even officials who brokered the sale said they didn’t know financing had been provided by the Industrial Development Authority, a little-known, city-owned corporation that has financed $390 million in city projects.

“I didn’t know they still existed,” said Jay Brodie, head of the Baltimore Development Corporation, the city’s economic development agency. “I knew about it years ago, but I didn’t know it was still around.”

The IDA’s involvement in the Paramount Hotel deal - recently disclosed by the city in response to a Public Information Act request filed by The Examiner — has come under increased scrutiny from some lawmakers and a political watchdog group.

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Critics say the IDA illustrates the need for more public oversight of a corporation that even former board members claim to know little about.

In 2002, Baltimore City sold the old Paramount Hotel on North Howard Street for $1 million to Bank of America’s development corporation — after purchasing it for $8.7 million. Records show the IDA financed $6 million of that deal.

State Del. Jill Carter, who represents the city’s 41st District, said the IDA lacks proper oversight.

“I think this creates a perception of impropriety when you have a select group of city officials deciding how the money is spent, rather that the City Council,” she said. “Usually when things are not transparent, the city loses.”

Ryan O’Donnell, executive director of Common Cause Maryland, said the financing of multimillion -dollar deals should be subject to stringent oversight.

“Whenever you delegate this type of authority to spend the taxpayer money — and in this case it is a large amount of money - you need proportionate accountability,” he said.

The IDA garnered attention after Frank Conaway, clerk of the Baltimore City Circuit Court, refused to sign off on a $4.5 million IDA loan to fund construction on the city owned landfill quarantine road landfill.

Many elected officials,  including former board member and ex-city councilman Keiffer Mitchell, said they knew little about the agency.

“We never met,” he said.

But city treasury department officials have argued the IDA’s strong bond rating, AAA, saves the city money by borrowing at lower interest rates.

Critics, however, counter that all IDA spending should be subject to City Council or voter approval.

“The key issue here is lack of transparency, the lack of which is troubling,” O’Donnell said.

Criticism notwithstanding, city officials defend the IDA.

“It’s mechanism we have in place for the city,” Mayor Sheila Dixon at a news conference.

“We expect the board members to be accountable.”

Helen Holton, an IDA board member and city councilwoman, defended the IDA, which meets “as needed” about once a year. She argued it allows the city to fast-track financing for crucial projects.

“Somebody has to watch the city’s money who does not have a political agenda,” she said.

For his part, Brodie said the multimillion-dollar loss on the Paramount Hotel paid off because of the amount of investment it helped attract to the west side redevelopment project.

“We had to recognize the costs and efforts that went into improving the building,” he said. “There were lead problems and historic preservation issues.”

sjanis@baltmoreexaminer.com