A group headed by New York-based real estate developer Elliott Sharaby became the new owner of the Belvedere Hotel yesterday and immediately announced plans to convert it to 112 condominiums with prices starting below $45,000.
The sale of the 13-story Mount Vernon landmark came four months after a group headed by Meritor Savings Bank of Philadelphia foreclosed on the former owner, Baltimore businessman Victor Frenkil's One East Chase Street Associates Limited Partnership.
A Meritor holding company, 12th Street Realty Corp., took control of the hotel last December during a public auction, where it was the high bidder with an offer of $3.5 million. It has been looking for a buyer since then.
Joel Michael, an associate of Mr. Sharaby's and project director of the Belvedere conversion, declined to disclose a purchase price for the hotel, and a deed will not be recorded with the city until next week.
Mr. Michael said his group bought only the 1903 hotel property on Chase Street and that a Texas-based group bought the adjacent garage.
Others familiar with this week's transaction said the hotel and garage sold for $3.8 million.
The sale represents a loss of more than $2 million for Meritor, which had claimed in court documents that Mr. Frenkil's group defaulted on its $4.5 million first mortgage and owed the Meritor-led group more than $6 million in principal and interest.
It also is considerably less than the $5.5 million figure offered for the hotel last fall by Miami developer Judah Hertz, who backed out of his acquisition just before he was due to settle on the property.
Mr. Sharaby has formed a company called Belvedere Realty Corp. to create and market the condominiums, and plans to open a sales office inside the building on Monday. It is his first project in the Baltimore area.
"We are extremely proud of our ability to combine the past and present in providing modern, upscale residences and facilities for buyers who want to be part of the trend back toward in-city living," he said in a prepared statement.
"We plan to preserve the ballrooms and other special areas for weddings and parties, and renovations will be in keeping with the style of the building. We are seeing a revival in many cities throughout the United States, and the Hotel Belvedere will become a new credit to the city of Baltimore."
Mr. Michael said his group has no connection to Mr. Hertz's. He said Mr. Sharaby had been interested in buying the hotel before the Dec. 27 auction and that the sale was concluded this week in a settlement that took several days to complete.
The new owner plans to convert the hotel rooms on the second through 10th floors of the building to condominiums and upgrade the lobby and hallways.
Prices will range from the "low $40,000s" for a small one-bedroom unit to $160,000 for an upper-level two-bedroom unit, with an average unit price of $79,000, Mr. Michael said. Condominium fees are expected to range from $200 to $370 per month, and parking will be available in the adjacent garage, he added.
Mr. Sharaby also plans to seek buyers for the 17,000 square feet of retail space on the basement level of the hotel; the offices on the 11th floor; the ballrooms on the 12th floor; and the restaurants and meeting rooms on the lobby level, Mr. Michael said. The 13th floor, most recently used as a lounge, may be converted to a penthouse condominium, he added.
For now, the new owners are honoring the leases of the merchants who have remained open in the lower-level mall and the 11 tenants who have lived in upper-floor apartments since the auction, Mr. Michael said. The current apartment tenants will have the right of first refusal in deciding to buy their units, he added.
Mr. Michael said his group has surveyed the Baltimore market and is optimistic that the condominiums will sell well, especially given the Belvedere's reputation and grandeur. He said he hopes to appeal to a wide range of people, including first-time buyers, empty nesters and investors, and will hold a grand opening around May 1.
"We're new to Baltimore, but we did our market research and we felt the time was right for a condominium conversion such as this," he said.
The hotel is one of the few truly mixed-use buildings in the city, containing at one point 180 hotel rooms, food and beverage operations, meeting and reception rooms, offices, apartments, shops and a parking garage. But it was unable to compete for a significant share of the city's hotel business because it is 10 blocks north of the Convention Center and is not close to the Inner Harbor like many of the city's newer hotels.
Mr. Frenkil's group acquired the building for $650,000 in 1975, and spent close to $12 million to upgrade it.
His group received city financial assistance when William Donald Schaefer was mayor, but when Mayor Kurt L. Schmoke took office in 1987, the city funds stopped. Mr. Frenkil's group filed for protection from creditors under the U.S. Bankruptcy Code in May 1989.