The owner of the Belvedere Hotel, facing the loss of more than $7 million in direct investment under a sale proposed by a bankruptcy trustee, says he is working on another deal that could limit his losses.
Victor Frenkil said yesterday he is negotiating to sell the hotel to the Baltimore International Culinary College, which would operate it as part of its hotel management program.
"I believe [the college] has a desire to make an offer," Frenkil said.
Frenkil would not name his asking price, but he indicated that a sale to the culinary college would be good for the city -- not to mention his financial standing.
"The culinary college is a local outfit interested in the city and state," Frenkil said. "It would be in the interest of the city to have them in the project in lieu of an out-of-town stranger who is interested in dollar gains."
In the past, Frenkil has stated often that he has invested $7
million of his own money in the Belvedere, at Charles and Chase streets.
The court-appointed trustee overseeing the Belvedere's financial reorganization has proposed selling the hotel to the Hertz Group, a Florida corporation, for $5.5 million. Under U.S. Bankruptcy Court procedures, a judge would have to weigh that agreement against any reorganization plan forwarded by Frenkil.
"It is not surprising that they are putting together a plan," said John J. Hentschel Jr., the city's real estate officer. "We expected it. It is in their best interests."
The culinary college has been mentioned on and off as part of a reorganization plan for the Belvedere for the past two years. Under the latest plan, the college would operate the Belvedere's bars and restaurants and run the remainder of the building as a combination hotel and apartment building.
The financial details of such a deal are not settled, but officials speculated that Frenkil most likely would retain some ownership stake and possibly lease the Belvedere to the college, which would in turn make renovations needed to make it competitive. Officials at the college could not be reached for comment.
The Hertz plan calls for the hotel to be converted into condominiums. The deal calls for Meritor Savings Bank to have its $4.6 million first mortgage paid. The city, meanwhile, would collect $1 million of its $4.6 million second mortgage. The city also would receive ownership of the Belvedere's food and beverage operations, which Hertz would have a two-year option to buy for $3.5 million.
The deal must be approved by the bankruptcy court and the city by Oct. 1 or Hertz would be free to walk away.
The Board of Estimates is expected to consider the deal Wednesday.
One East Chase Street Limited Partnership, the Frenkil-led group that bought the Belvedere in 1975, filed for bankruptcy in May 1989. That move came after Mayor Kurt L. Schmoke refused to pump any more city money into the 87-year-old hotel.
Previously, the hotel had been the recipient of several city loans and loan guarantees, moves approved by former Mayor William Donald Schaefer, whom Frenkil supported politically.
Schaefer said the loans were needed to keep the hotel alive, save jobs and provide an economic anchor for the Mount Vernon area.