The Board of Estimates endorsed a plan yesterday to sell the Belvedere Hotel to a Miami developer, who would convert the bankrupt midtown Baltimore landmark into 125 condominiums.
Under the terms of the sale, the city, which over the past decade poured some $4.5 million into the financially troubled hotel, would receive $1 million in cash plus ownership of the hotel's restaurants, bars and ballroom facilities.
That package would settle debts to the city -- including interest and principal -- of some $6.6 million owed by the Belvedere investors, who are headed by politically influential Baltimore contractor Victor Frenkil.
John J. Hentschel, chief of the city's real estate office, insisted that the deal would likely be the best the city could manage, given the current real estate market and a national economy that is likely to get worse before it gets better.
"We are ecstatic," Mr. Hentschel said. "Had we gone to foreclosure we would have come out with zip, zero."
"As the financial markets continued to deteriorate, it was more apparent we were not going to be able to find a buyer who could finance it or who could put up cash," Mr. Hentschel said.
The prospective buyer, the Hertz Group Inc., is a Miami-based company led by Judah Hertz that specializes in converting hotels into condominiums.
The sale also has been endorsed by the hotel's principal creditor, a consortium of banks led by Meritor Savings Bank of Philadelphia that is owed $5.5 million in principal and interest.
The owners of the Belvedere -- who have not been able to make the hotel competitive with newer ones built near the Inner Harbor since they purchased it in 1975 -- filed for Chapter 11 bankruptcy in May 1989.
Since then, the Belvedere's owners have weighed various proposals for selling the hotel or restructuring its debt.
The future of the Belvedere is in the hands of U.S. Bankruptcy Court Judge James F. Schneider, who will consider the sale proposal at a hearing on Monday.
In endorsing the sale to Hertz, the board rejected an appeal by the Baltimore International Culinary Institute, which has asked the court to allow it to lease the building under a long-term arrangement -- one perhaps extending 99 years -- for use as a training facility for its students in food service.
The institute, which would convert the hotel's rooms into rental apartments, wanted the board to back the institute's offer or to show
no preference at all. John M. Jones, who spoke before the board on behalf of the Belvedere ownership, said Mr. Frenkil favored the institute proposal.
But Mayor Kurt L. Schmoke rejected that proposal, saying the institute was asking the court to turn down a deal that could be completed by the end of November in favor of one that might not be solidified for months, if ever.
Instead, he suggested that the institute might lease the food and beverage facilities from the city.
If his plan is approved by the bankruptcy court, Mr. Hertz would be coming into the Baltimore real estate market at a time when slower-than-expected sales at some other condominiums -- including Harbor Court and Scarlett Place -- have given Baltimore a reputation for being a poor condominium market.
But Mr. Hertz said yesterday that he believed the Belvedere would be a success as a condominium because it is a well-known building and because he plans to price the residences between $59,000 and $110,000, a range that would make them affordable to people already living in the area. Most of the condominiums that have been slow to sell in Baltimore, he said, have been priced in the $200,000 range or higher.
"I don't think anyone has done the kind of condominium project that we are talking about," he said. "This is a landmark building, a one-of-a-kind property."