The court-appointed trustee for the Belvedere Hotel asked a U.S. Bankruptcy Court judge yesterday to approve the sale of the financially troubled Baltimore landmark to a Florida corporation for $5.5 million.
If the Florida-based Hertz Group Inc. buys the Belvedere, the sale would net only about half of the more than $10 million the owners owe to their principal mortgagors, which includes the city of Baltimore. But the city would retain ownership of the Belvedere's restaurants, bars and food service facilities -- worth at least $3.5 million, according to John J. Hentschel Jr., the city's real estate officer.
Kenneth F. Davies, the court-appointed trustee for the Belvedere owners, stressed that the Hertz Group has not signed an agreement to purchase the hotel. But the proposal would have to be approved by U.S. Bankruptcy Court Judge James F. Schneider to take effect. It also would need the approval of the city's Board of Estimates, which is expected to consider the sale next week.
"At this point we don't have a signed purchase agreement," Mr. Davies said. "We are filing the motion [with the bankruptcy court] to get the ball rolling."
The motion outlines conditions under which a sale would be consummated, including an Oct. 1 sale deadline.
The Hertz Group first expressed interest in buying the hotel about a year ago, Mr. Hentschel said.
The company's owner, Judah Hertz, specializes in buying distressed properties and converting them into condominiums. He plans to turn the Belvedere's 180 rooms into condominiums, which appraisers believe would make the building worth $14 million.
The owners of the Belvedere, known as One East Chase Street Associates Limited Partnership, filed for bankruptcy in May 1989.
The partnership, controlled by Baltimore builder Victor Frenkil, owes more than $5.5 million in principal and interest to Philadelphia-based Meritor Savings Bank in the form of a first mortgage.
The partnership also owes the city more than $4.6 million in the form of a second mortgage.
Under the proposed agreement, Meritor would get $4,542,899.98 of the proceeds of the sale.
The remaining $1 million would go to the city of Baltimore, which would retain ownership of the restaurants, bars and food service facilities in the hotel and lease the space out.
Hertz would have the option of buying those facilities later for an additional $3.5 million, Mr. Hentschel said.
If it does not exercise that option, the city can sell the space to someone else.
Built in 1903, the Belvedere had fallen into disrepair by the time Mr. Frenkil, a political supporter of then-Mayor William Donald Schaefer, bought it in 1975.