Industrial park in Frederick Co. to be auctioned

September 20, 1994|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

NationsBank Corp. plans to auction a largely undeveloped Frederick County industrial park next month as part of a debt settlement with the development firm Merritt.

The Oct. 11 auction, involving 46 acres and one of two buildings in Merritt's CenterPark project, comes more than a year after the bank filed a foreclosure suit against the developer for failing to repay promissory notes totaling $10.7 million, according to documents filed in Baltimore County Circuit Court.

"The problems we encountered with the project were a function of problems in the general economy and the real estate world in particular," said one Merritt executive. "The auction is part of a larger agreement, and just the result of the negotiating process. There's nothing at all antagonistic here."

Merritt, which is one of the state's largest development companies and controls an 8.5-million-square-foot portfolio valued at roughly $400 million, has been working through a series of lawsuits from lenders holding delinquent or underperforming loans. When NationsBank filed suit in February 1993, it marked the largest lender action against the developer. Various other loan defaults have been settled, including other mortgages held by NationsBank.

Earlier this year, Merritt repurchased a building and land in the Columbia Corporate Park that had been assumed by NationsBank.

Plans for the park, slated for 500,000-square-feet, were stunted by the recession of the early 1990s, and only two buildings were constructed. A 48,900-square-foot building at 650 Research Drive, roughly 80 percent leased, will be included in the auction.

Merritt had unsuccessfully attempted to sell the project, which was begun in 1990, for $17 million in late 1992, prior to the bank's suit.

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