Owner buys back theater buildingLouis B. Chitty, owner of...

COMMERCIAL REAL ESTATE

November 18, 1992|By Timothy J. Mullaney

Owner buys back theater building

Louis B. Chitty, owner of the Harborlights Dinner Theater in Fells Point, agreed to buy back the building for $210,000 at a foreclosure auction yesterday. But he doesn't plan to reopen the theater, which has been dark since early last year.

Mr. Chitty and a group of investors opened the dinner theater in 1985. Two years later, they sold the theater's parent company to a group led by Baltimore attorney Hyman K. Cohen, the largest shareholder in the group, and Scott Black.

But the business struggled.

The Chitty group regained control over the corporation last year after the Cohen-Black group failed to pay a $350,000 note that the original owners had granted to finance the company's sale.

But when the Chitty group got the Harborlights building back, it was encumbered by a mortgage to Mr. Cohen and his wife and another to Mr. Black. The Chitty group did not fully repay the loan to the Cohens, leading to the foreclosure.

Yesterday, Mr. Chitty retained control of the building, on Broadway just south of Eastern Avenue, by making the highest bid at auction. He said he does not plan to reopen the theater.

Fall in home permits a misleading indicator

Although new-home sales are up sharply in the Baltimore region, residential building permits dropped off the cliff in September. But it's too early to worry that the permit numbers mean the housing recovery will be short-lived.

The Baltimore Metropolitan Council says September single-family residential building permits, including town homes, fell 22 percent compared to 1991. That followed a 44 percent decline in August and a 9 percent gain in July.

A separate report last week from Legg Mason Realty Group Inc. said new-home sales were up 19 percent during those three months.

That might look like a contradiction, but the council offers an explanation.

Many developers took out permits in June to avoid stricter sprinkler regulations that went into effect July 1, the council's report says. That led to a slowdown in permits during the months that followed.

Because of the June blip, monthly building permits figures will be flawed indicators of the construction market's health for the rest of the year. So what's an armchair economist to do?

"Existing home sales is one to look at. And in terms of the new homes market, overall consumer confidence is probably the biggest relative indicator," said Robert Lefenfeld, vice president of Legg Mason Realty Group.

In 1992, housing permit activity is still up about 53 percent from last year.

Commercial building permits were up in September: Baltimore continues to be the strongest local commercial construction market because of its strength in health care.

Interstate General sells last of Va. site

Interstate General Co. L.P., the St. Charles-based builder and developer, has sold its remaining 80-acre stake in Montclair, Va.

The deal calls for K. Hovnanian Enterprises Inc. of Red Bank, N.J., to buy the land, enough for 212 town homes and 580 condominiums, for $9.2 million. Hovnanian is known primarily for building inexpensive homes designed for first-time buyers.

"When all is said and done, this sale will help us break even on what we owe, including the accrued interest over seven years," Interstate General spokesman Gregory TenEyck said. The company assembled the land in 1985 and has built 400 town homes there since. It will not retain any land in the development.

The company said the deal will aid the restructuring it began in August and allow it to meet terms of a loan from Signet Bank/Maryland.

Mr. TenEyck said the sale was part of a deal reached in August by Signet and Interstate General. The company's broad strategy includes selling this land so Interstate General can pay down debt by selling off underperforming assets and getting out of markets where the company isn't making enough money.

Interstate General, like other builders and developers, has been hurt by the real estate slump. Its partnership units closed at $4 yesterday, up 88 cents, after reporting earnings late Monday.

Tower Building site to become parking lot

With the prospect of building the city's next police headquarters now apparently in the past and no end in sight to the office construction lull downtown, Manekin Corp. is turning the site of the old Tower Building at Baltimore Street and Guilford Avenue into a parking lot.

"We're out there grading," Manekin President Richard Alter said. "We're going to put a parking lot there, which I hope would be temporary, until we find a better use."

The site was one of the runners-up when the city decided to move the Police Department to Howard Street.

With downtown's Class A office vacancy rate at about 20 percent, there are a half-dozen or more office building sites downtown that are stalled. Most brokers and developers don't expect to see construction on another major downtown building to begin for several years.

"We will basically have to wait for a turnaround in the commercial market" because there are no other major institutional clients, like the Police Department, on the immediate horizon, Mr. Alter said.

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