Md. may lose $3.2 million on sale of 3 city buildings

REAL ESTATE NOTES

January 24, 1993|By Edward Gunts | Edward Gunts,Staff Writer

A plan to sell three apartment buildings to a Rhode Island-based developer for $7 million could result in a loss of more than $3.2 million for the state, according to documents on file with the Baltimore Circuit Court.

Judge Joseph H. H. Kaplan will hold a hearing tomorrow at 11:30 a.m. to consider a recommendation from a state-appointed receiver that the Renaissance Plaza apartments be sold to a group headed by Landex Corp. of Warwick, R.I.

According to a motion filed this month by the receiver, Financial Conservators Inc., a private developer in 1991 defaulted on a $7 million state loan used to refinance the buildings. That developer, Renaissance Plaza Limited Partnership, owed the state more than $9.27 million in principal and interest as of Dec. 31.

The 311-unit Renaissance Plaza complex includes the 62-unit Emersonian at 2502 Eutaw Place; the 95-unit Esplanade at 2525 Eutaw Place; and the 154-unit Temple Gardens at 2601 Madison Ave.

Landex's plan to spend $28.6 million to buy and renovate the Renaissance Plaza complex was judged to be the strongest of three offers reviewed by the receiver. None of the bidders offered the state more than $7 million for the properties.

If the judge approves the disposition plan and the project proceeds, the state would receive about $6.5 million of the $7 million purchase price.

As outlined in court documents, the $28.6 million financial package contemplates a $7 million first mortgage from a private lender and an equity contribution from the developers of $13.6 million. Other funding sources would include the state's Rental Housing Production Program and federal weatherization and lead paint removal funds.

But part of the $7 million payment for the buildings would actually go to pay overdue Baltimore taxes of $203,660, a past-due city loan payment of $222,100 and other debts. The remainder -- about $6.5 million -- would go to the state.

Combined with the $2.7 million in interest payments never paid by the original developer and not covered by the $7 million purchase offer, the $500,000 shortfall would bring the state's loss to $3.2 million.

Landex is working with Community Preservation and Development Corp. of Glen Burnie and a financial partner called the Richmond Group. If Judge Kaplan approves the receiver's motion, the prospective buyers would have 75 days to inspect the buildings, secure financing and finish their construction plans. If financing comes through, work could begin later this year.

Around the region

* Baltimore Mayor Kurt L. Schmoke will speak about "Baltimore ** City: Today and Tomorrow," at a "Business over Breakfast" meeting that the Downtown Partnership will sponsor Thursday from 8 a.m. to 9:30 a.m. at the Hyatt Regency Hotel, 300 Light St. The breakfast is free to Downtown Partnership members and $50 for non-members. For reservations, call 244-1030.

* J. Richard Latini, first vice president of CB Commercial Real Estate Service, has been elected and installed as the new president of the Maryland chapter of NAIOP, also known as The Association for Commercial Real Estate. Other 1993 officers are Donald Manekin of Manekin Corp.; Scott Dorsey of Merritt, and James Truby of Crystal Hill Investments.

* Landmark Homes has hired Papier Interiors and Design Group Inc. to design the interior of a 4,200-square-foot model home in the Brittingham residential community in Severna Park. Curt Cummings is the project designer.

* James Fieser has joined McShea & Co. of Gaithersburg as an associate broker. Art Ferrillo has joined the same firm as a commercial sales and leasing agent.

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