Signet cancels auction of Southern Hotel

April 18, 1991|By Edward Gunts

The Trammell Crow Co.'s plan to construct the tallest office building in Baltimore apparently was kept alive yesterday, as Signet Bank/Maryland canceled a foreclosure sale of the Southern Hotel -- a key component of the tract of land Trammell Crow was assembling.

Steve Fox, a representative of Michael Fox Auctioneers, told people coming to the auction at 1 p.m. yesterday that it had been called off earlier in the day by Signet, the lender that had initiated foreclosure proceedings against the hotel's current owner.

Mr. Fox referred questions about the cancellation to Gail Sanders, a Signet spokeswoman. Ms. Sanders confirmed that Signet canceled the auction but declined to comment further. Trammell Crow officials and attorneys for Signet could not be reached or would not comment.

The 13-story Southern Hotel at 14 Light St. is one of seven properties that a group headed by Trammell Crow's Baltimore office has been trying to acquire since 1987 to gain control of a site large enough to build a 45-story, $180 million-to-$200 million office tower called One Light Street. The site is bounded by Light, Redwood, Grant and Baltimore streets.

After buying or negotiating contracts to purchase the other six parcels for more than $8 million, Trammell Crow and its partner, Capital Guidance of Geneva, Switzerland, had until March 29 to purchase the vacant hotel for $6.5 million, the price offered at a 1988 auction.

When it became clear that Trammell Crow was not going to meet that deadline, Signet officials began foreclosure proceedings against the current owner, Southern Hotel Limited Partnership. That group, headed by Michael Yerman and Ellis Goodman, owes Signet $6.7 million in principal, interest and late fees, according to court documents.

Trammell Crow officials negotiated with Signet officials up until the auction in an effort to reach an agreement that would get the bank to cancel the auction and allow Trammell Crow to retain control of the hotel.

Trammell Crow officials have said they will not move ahead with construction until they pre-lease a majority of the space in the 750,000-square-foot tower. Mayor Kurt L. Schmoke has said he doesn't want the city to issue a demolition permit for the hotel, a city landmark, until tenants are identified and leasing is secured for the project.

Besides the Southern Hotel, the only property within the parcel that Trammell Crow's group doesn't yet own is the building at 101-103 E. Baltimore St., owned by McDonald's Corp. McDonald's has a restaurant there, and its representatives have been working closely with the development team for One Light Street because they want to open a replacement restaurant in the new building. Trammell Crow has a contract that gives its team until 1993 to buy McDonald's building.

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