Jacobs' house on auction block Bank forecloses on cash-strapped Orioles owner

February 06, 1993|By Mark Hyman | Mark Hyman,Staff Writer

Looking for a pricey addition to a collection of Orioles memorabilia?

How about the owner's house?

Mercantile-Safe Deposit and Trust Co. followed through yesterday on its plans to sell Eli S. Jacobs' 6-acre Owings Mills estate, posting a sign on the property announcing a public auction for Feb. 26. The bank initiated foreclosure proceedings against the Orioles' principal owner a week ago.

Mr. Jacobs paid $2.25 million for the house in January 1990, borrowing $2 million of the purchase price from Mercantile. The team's financially pressed owner stopped making his $19,968 monthly payments to the bank last September or October, according to information in court filings.

The new owners of the house will find almost every amenity. An advertisement about the auction, scheduled to appear in local newspapers, describes the property as an 11-room home equipped with a 3-car garage, satellite dish, security system and in-ground swimming pool.

"It's a great street, a wonderful area, absolutely premier real estate," said Michael H. Yerman, a Baltimore real-estate broker who frequently deals in upscale properties. "If location means anything, he's in the right place."

Despite inflation and the steady appreciation in the price of homes in Greenspring Valley, an area dotted with large homes on rolling grounds north of Baltimore, Mr. Yerman said it was not certain the house would bring more than what Mr. Jacobs paid three years ago. Mr. Yerman, who said he has not been inside Mr. Jacobs' house, called it "a sky-high price" compared to surrounding homes.

A New York spokesman for Mr. Jacobs did not respond to questions yesterday. But last week the spokesman said Mr. Jacobs was not aware of the bank's efforts to foreclose.

Mr. Jacobs, an 87 percent owner of the Orioles, has been under mounting pressure from creditors to sell the team. He has not discussed sale talks publicly, but is known to have been in negotiations with a group of investors led by Cincinnati businessman William O. DeWitt Jr.

How much of Mr. Jacobs' home will be seen by prospective buyers before the auction remains unclear.

Under Maryland law, Mr. Jacobs, who also lives in New York, could keep possession of the house beyond the auction date, until the sale is approved by the Baltimore County Circuit Court, where the filing for foreclosure was made.

Mr. Jacobs could block efforts to open the house for inspection by bidders, according to those familiar with auctions.

That would make a sale difficult, Mr. Yerman said. "I have never seen anybody buy a house without going through it, and I just don't think that is going to occur, not in Baltimore, Maryland, not anywhere," the broker said.

Meanwhile, Mr. Jacobs has additional financial problems in New York. His landlord filed suit in New York federal court late last month, charging that he owes $543,000 in back rent on the Park Avenue offices of his investment firm, E. S. Jacobs & Co.

The suit, seeking repayment of the money, alleges that the rent hasn't been paid since August 1992.

Since 1988, E. S. Jacobs & Co. has subleased space on the 18th floor of a Manhattan office building from ICN Pharmaceuticals, the company alleges in its suit. Last November, ICN notified Mr. Jacobs that his company was in default on $375,711 in rent payments, according to the suit.

The pharmaceutical company still has not been paid, according to a complaint dated Jan. 20.

Clifford R. Saffron, a lawyer for ICN, said the company initially tried to work out a payment plan with Mr. Jacobs, but now is making plans for eviction.

"At the very least, we want to have a chance to relet the premises," Mr. Saffron said.

The lawsuit brought by ICN is the latest legal and financial tangle for Mr. Jacobs, who is trying to fend off creditors and reorganize his finances.

The owner has not talked about his troubles publicly. But last July, he notified some unsecured creditors that he would not be making interest payments on loans received from them. He asked that the creditors refrain from suing him while he attempted a financial restructuring.

Despite the request, Mr. Jacobs has been the target of lawsuits. Last year, four banks filed separate suits seeking repayment of loans. In all, he is accused of defaulting on more than $44 million in loans and personal guarantees to various banks, investors and companies.

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