The Bank of America took an important step toward gaining control of the troubled Brokerage at the Inner Harbor complex yesterday when one of its subsidiaries submitted the winning bid of $8 million for it at auction.
The offer from B.A. Properties, the subsidiary, was the only bid submitted at the auction, which was a foreclosure sale on behalf of San Francisco-based Bank of America.
The auction, by Alex Cooper Auctioneers, drew several dozen observers, including a number of merchants with shops on the premises. The retail and office tenants are expected to remain open for business as usual, since their leases are binding no matter who the landlord is.
According to court documents, the bank claims it is owed $53 million by Sovereign Realty 1983-XVIII Limited Partnership, the Philadelphia-based group that technically still owns the mixed-use complex and filed for protection from creditors under the U. S. Bankruptcy Code last March.
If the sale is ratified by the Baltimore Circuit Court in about a month, as expected, the bank will gain control of the property from Sovereign.
James Cole, a local attorney representing Bank of America, said he expects the bank to seek a buyer for the property once the sale is ratified.
"They're going to try to market it. That's for sure," he said after the auction.
Opened in phases starting nearly 10 years ago on the block bounded by Market Place and Water, Frederick and Baltimore streets, the Brokerage is one of the largest and most expensive redevelopment projects ever involved in bankruptcy proceedings in Baltimore.
It has 133,000 square feet of retail space on two levels, 146,000 square feet of upper-level office space and 276 parking spaces. Most of the office space is leased, but the retail space has never been fully occupied, and some of the tenants have had their own financial difficulties resulting from lack of business.
Gov. William Donald Schaefer cited the problems of the Brokerage last month when he suggested that the city, the state and the private sector work together on a new master plan of the east side of the Inner Harbor.