Harbor complex shelved Weak condo sales prompt end to project

March 14, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The owners of the HarborView complex have abandoned development plans there and will sell the site of the proposed $600 million waterfront village and marina in South Baltimore, after three years of lackluster sales.

Singapore-based Parkway Holding Ltd.'s decision to exit the ambitious 42-acre property which includes a 27-story condominium tower, restaurant and yacht club marks the latest in a string of luxury residential failures in Baltimore, following projects such as Scarlett Place, Lighthouse Point, Henderson's Wharf, Belt's Wharf and the Colonnade.

"After a review of the rate of sales in the project and the lackluster Baltimore property market, management has decided to seek options to sell the project," Parkway said in a prepared statement.

Parkway said it intends to take a $66.5 million charge to write off its investment in HarborView, originally planned to contain six high-rise condominium towers with units slated to sell for up to $1.7 million.

Sour sales in the $90 million condominium tower fewer than 50 of the 254 units have sold since its opening in 1993 together with poor market conditions for future projects have caused Parkway to devalue the Key Highway project by $74.5 million.

"They've decided to finally bite the bullet," said Lim Jit Soon, a UBS Securities analyst in Singapore.

In all, Parkway has invested $131.5 million into HarborView, the company said.

Parkway, a $1.5 billion conglomerate that also owns residential projects in London, Malaysia and Melbourne, Australia, added that the Inner Harbor project was the primary cause of its $8.2 million pretax loss on U.S. operations last year.

The developer's decision also represents a dramatic reversal of its plans of two years ago, when it said it would build a new $50 million upscale apartment tower despite the sluggish condominium sales.

Since that announcement, however, no construction has begun on the 15-story project, whose units were slated to rent for between $1,100 and $3,000 per month.

"The market for empty nesters that we saw when the project began is just not there," said Richard A. Swirnow, president of HarborView Properties Development Co., the Parkway-backed group developing the project. "But if you look at all the high-end housing in the marketplace, whether it be in Ruxton or elsewhere, you'll see it's not moving. And the condo market is weak across the country, except in Florida."

Mr. Swirnow declined to comment on the reasons for the lack of work on the 275-unit condominium tower, but added that a search for new investors who would spur the project continues.

"Condominiums in general have been stigmatized by the failure of various projects and the units there are small for their intended buyers," said Jenifer Stick, a Lipman, Frizzell & Mitchell appraiser, in analyzing HarborView.

But HarborView isn't the only highly-capitalized, luxury residential project conceived in the 1980s in Baltimore to suffer.

"We were certainly disappointed with Baltimore's reaction to Scarlett Place," said Scott Dorsey, vice president of Merritt, the Woodlawn-based developer and owner of the 14-story, 147-unit condominium project at 729 E. Pratt St., which was completed in 1987.

"If we had developed it on the Potomac River [in Washington], we would have made a fortune. It's just Baltimore," said Mr. Dorsey.

He said the $35 million Scarlett Place and other downtown high-rises failed to catch on because of cost a condominium unit in Merritt's project was roughly the same as a four-bedroom, single-family home in the suburbs and because of the relatively easy commute to downtown from the suburbs.

Pub Date: 3/14/96

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.