City to take loss on Hollins St. building loan But agreement stipulates owners to raze Exchange

June 06, 1996|By Eric Siegel | Eric Siegel,SUN STAFF

Baltimore will receive less than 50 cents on the dollar for $266,666 in city loans to the owners of the burned-out Hollins Street Exchange and assurance that the owners will raze the building under an agreement approved yesterday by the Board of Estimates.

Under the agreement, the city will receive $50,000 now from the Hollins Street Exchange Limited Partnership -- and either another $50,000 in a year or $75,000 in 18 months.

The owners also will use $80,000 from fire insurance and any other funds needed to tear the building down, according to the agreement.

In return, the city will forgive loan guarantees from the company's principals, Alvin and Cary Blank.

Thomas H. Goetzinger, who administers the city's loan and guarantee program, told the board that the agreement was necessary so that city funds would not be used to demolish the building in Southwest Baltimore, which is a hazard.

The seven-story building in the 2300 block of Hollins St. housed businesses, including furniture makers and recording studios. In November, it burned in a spectacular blaze that was started by homeless people in a warehouse across the street. Last month, 37 tenants of the exchange filed a multimillion-dollar suit against the building's owners, saying they did not obtain required permits before renting out the building.

Four years ago, the city approved $266,666 in loans to the exchange -- $26,666 in city money and $240,000 in state funds given to the city and lent to the owners to revitalize a depressed area, according to documents.

The city loans were second in line to be repaid behind a $726,000 loan from American National Bank, which will receive $350,000, documents show.

The building was insured for $480,000, the documents show.

If the exchange's owners receive any insurance money from the owners of the warehouse where the fire started, that money would help pay the rest of the city loan, according to the agreement.

Pub Date: 6/06/96

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