The Board of Estimates has approved a plan for the financially ailing Belvedere Hotel to be sold to a Florida investor who wants to convert the historic structure into moderately priced condominiums.
The proposed sale, approved yesterday by the board, now goes before U.S. Bankruptcy Court Judge James F. Schneider, who is to weigh the deal against another favored by the current owner of the Belvedere.
The second proposal would allow the hotel's chief owner, builder Victor Frenkil, to retain title of the hotel while selling control of it to the Baltimore International Culinary College.
The agreement would allow Frenkil to save significant sums in taxes, allow some of the hotel's unsecured creditors to be paid, and allow the hotel to be retained by a local group, said Robert F. Dashiell, an attorney for the college.
Under the plan, the college would operate the Belvedere's restaurants and hotels as part of its curriculum and convert most of the building into apartments.
Schneider is scheduled to hold a hearing on the matter on Monday.
The agreement favored by the city would allow the Hertz Group, a Florida concern, to buy the hotel for $5.5 million. That deal would allow the hotel's first mortgage holder, Meritor Savings Bank, to recapture $4.5 million -- the principal amount of its loans to the Belvedere.
Meanwhile, the city, which holds a second mortgage on the property, would receive $1 million in cash plus ownership of the Belvedere's bars, ballrooms and restaurants except for the renowned 13th floor bar, which would be converted into condominiums.
The Hertz Group would have a two-year option to buy the food and beverage operations from the city for $3.5 million.
Judah Hertz, the lead investor in the Hertz Group, said his operation has no interest in buying the Belvedere's restaurants and bars. "That's not our business," he said.
The group, however, plans to convert the Belvedere's hotel rooms into 125 condominium units that will be sold for prices ranging from $59,000 to $110,000, he said. In all, the Hertz Group plans to spend $900,000 to spruce up the Belvedere's lobby and condominium units.
Before the conversion begins, Hertz said, he plans to honor all of the standing reservations for the hotel including plans for New Year's Eve.
While Hertz has set its plans for the Belvedere, the Baltimore International Culinary College has hopes of buying the hotel to use as a laboratory for its classroom operations.
The college plans to use a $9 million state-backed bond sale to finance acquisition of the hotel, $1.5 million in renovations as well as a "perpetual lease" from Frenkil.
Financing for the deal is not set yet, although the college has assurance from state officials that their plans will be supported.
But both the city and a lawyer for Meritor Savings Bank said they preferred the Hertz deal, which already is assured financing.
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. The once grand Belvedere previously had received several city loans loans and loan guarantees.