Southern Hotel on auction block again

March 23, 1991|By Peter H. Frank

The on-again, off-again plans for the historic Southern Hotel have changed once more, with the downtown property being scheduled to return to the auction block next month.

The latest attempt to purchase the 14-story building at the corner of Light and Redwood streets had been made by the Trammell Crow Co. as part of its plan to build the tallest office tower in Baltimore on the site.

But after trying for nearly 2 1/2 years to line up enough tenants to lease more than half the planned 750,000-square-foot building, Trammell Crow was unable to meet the latest deadline set by Signet Bank/Maryland, the property's mortgage holder, for closing on the purchase.

Previous purchase attempts have been wrecked by such things as the Maryland savings and loan crisis in 1985 and the Tax Reform Act of 1986. Two other prospective buyers simply changed their minds.

Without the leasing commitments to fill at least half its planned project, Trammell Crow was unable to secure the financing needed to build, said Dirk Mosis, the Trammell Crow partner heading the Baltimore project. And without the financing, the company was unable to close on the purchase that had been pending since November 1988.

"Basically, we were supposed to close on it this month, but we're not going to close on it," he said. "We don't have the preleasing and everything locked up."

Instead, Signet filed foreclosure papers last week on the current owners, Southern Hotel Limited Partnership. The partnership, whose general partner is Michael Yerman, bought the property in late 1983. The foreclosure auction is scheduled for April 17.

Mr. Mosis said that he expects the auction to attract few bidders and that Signet would likely end up buying the building back.

Since Trammell Crow owns the rest of the block, Mr. Mosis remains optimistic about proceeding with the planned full-block project.

"It's still not like the end of the world," Mr. Mosis said of the foreclosure proceedings. "I wouldn't say we're going to sign a lease on it by next month. But things are progressing. The financing is there if the leasing is there."

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