Aid near for stalled HarborView project Pa. firm would inject $75 million for 15-story apartment building

September 30, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The developer of HarborView, the planned luxury residential complex in South Baltimore long stalled by a glut of city condominiums, is close to obtaining a financial shot in the arm that could bring the first new construction there in seven years.

Lubert-Adler Partners, a Philadelphia venture capital firm, would inject $75 million into the 42-acre project, formerly the site of a Bethlehem Steel shipyard and the largest residential project ever planned in Baltimore.

The funding would likely spur work on a $50 million upscale apartment building, which has been on the drawing board since at least 1994, said a source familiar with HarborView Properties Development Co., the project's developer.

"They're trying to get an equity fund to join in," the source said. "It will give them new financing, new financing for a new building."

The money also would help developers of the Key Highway project refinance existing debt, the source said.

A formal announcement of the new financing and the start of the 15-story apartment building is expected next week. Neither Lubert-Adler nor Richard A. Swirnow, president of HarborView Properties, returned numerous telephone calls seeking comment.

It was unclear whether Parkway Holdings Ltd., the Singapore conglomerate that controls the project, would continue to be involved.

In March 1996, Parkway wrote down $66.5 million of its $131 million HarborView investment as a result of sluggish sales in the project's residential building, a 27-story condominium tower.

Units in the tower at 100 HarborView Drive, built at a cost of $90 million, were originally priced as high as $1.7 million, making them among the most expensive in the metropolitan area.

After taking the charge against earnings, Parkway said it would try to sell its interest in HarborView, even as Swirnow proclaimed that the developers were considering building low-rise housing to move the project forward. The low-rise units were never built.

Parkway officials could not be reached yesterday for comment.

While HarborView has failed to live up to its billing -- Swirnow said in 1989 that it would be a "city within a city, a neighborhood among neighborhoods," with six high-rises and nearly 1,600 residents -- Baltimore officials contend it remains a valuable tract and a potential anchor for redevelopment.

"It provides a great opportunity for housing development," said Charles C. Graves III, director of the city's Department of Planning. "We've been looking at ways to increase downtown housing, and I think HarborView could be a very attractive site for that type of project."

But Graves added that architectural design plans have not been submitted for the 275-unit apartment building.

If the financing package is finalized, HarborView would become the latest in a series of projects underwritten by Lubert-Adler, which was formed in early 1997. The firm has rehabilitated a dozen diverse projects, from apartments to hotels to office skyscrapers, mostly in Philadelphia.

In July, Lubert-Adler acquired a 125-year-old office project known as the Victory Building near Philadelphia's City Hall, with plans to renovate it.

Earlier this year, the firm bought a 17-story office tower and began converting five floors for a 192-room Sheraton hotel. In all, the Rittenhouse Regency is expected to receive a $14 million upgrade.

In December, Lubert-Adler began a $10 million project to convert a 17-story Philadelphia office high-rise known as the Avenue of the Arts Building into 208 luxury apartments.

In New York, Lubert-Adler reinvigorated 71 Broadway, a 22-story office tower near the World Trade Center.

The firm's first fund, a $120 million venture, included investors such as the Harvard Private Capital Group and Nomura Securities International, the investment arm of a giant Japanese commercial bank. It is expected that the new HarborView financing would come from a second fund organized by Lubert-Adler.

Pub Date: 9/30/98

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