Auction done, uncertainty remains at Charles Plaza Provident's purchase leaves questions on center's development

Bank likely to sell it

Commercial real estate

October 08, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Amid the legal jargon of leasehold estates and easement rights that preceded a foreclosure auction of Charles Plaza yesterday, 7-month-old Brighton Ditter slept in his mother's arms, unaware and unconcerned about either the present or the future.

His parents weren't so lucky.

For Lisa and Michael Ditter, owners of Java Joe's gourmet coffee shop in the troubled Charles Street retail and office complex, the auction and $800,000 purchase by Provident Bank of Maryland marks the beginning of what could be an extended period of uncertainty.

"Of course we're worried," Michael Ditter said, standing outside his 6-year-old shop. "It's not necessarily in the bank's interest to do anything right now. It's very scary, because this is what we do."

An attorney representing Provident said he was uncertain about the bank's plans for the largely vacant 13-year-old project, other than that the bank will likely eventually sell it. Provident made the only bid on the property.

Meanwhile, economic development officials from the Downtown Partnership of Baltimore Inc. and Charles Street Association applauded the sale as an opportunity to redevelop a failed eyesore.

"This is one of the ugliest group of buildings along historic Charles Street," said Kemp Byrnes, a member of the Charles Street Association's board and head of a real estate brokerage and development firm. "This is exciting because hopefully now a new owner will tear this wart down and put up something in keeping with the nature of the street. It's the end of a misconceived project."

Earlier this year, Byrnes and Jimmy Rouse -- whose father, Rouse Co. founder James W. Rouse, had a hand in developing Charles Plaza in the mid-1980s -- unveiled a plan to raze the series of two-story buildings there and transform the 1.5-acre tract into 150,000 square feet of retail space, with shops and a movie theater.

Rouse said yesterday, however, that he doesn't plan to redevelop the plaza himself, but merely "help formulate a vision and facilitate the complexities" of the project.

And Charles Plaza is wrought with complexities, including eight different parcels of land, multiple owners, city involvement and a history of lost tenants and flagging business.

Charles Plaza was completed at a cost of $2.9 million in 1985, and purchased two years later by a group that included Rouse's Enterprise Development Corp. The project's first snag came in June 1996, when Encore Books abandoned Charles Plaza as part of a store-closing campaign.

Other tenants soon left as well, causing Provident to file a lawsuit to collect its $1.6 million mortgage. Its largest tenant, the Johns Hopkins University, has a lease that is set to expire in June. The university is in discussions with attorney Peter Angelos to relocate to the former Hamburger's building.

If Provident does find a buyer, though, the 36,000-square-foot plaza will become the latest Charles Street project to be revitalized.

Directly across the street from the plaza, the derelict Masonic Temple Building has been acquired by the owner of the Tremont Plaza Hotel, who plans to install retail and office tenants.

To the north, architects are busy determining how to convert a vacant five-story office building at 300 N. Charles St. to 35 apartments. Nearby, at 301 N. Charles St., Houston-based Boxer Property is working to fill its recently acquired 11-story building with tenants. And just behind Charles Plaza, the Oakwood and Charles Towers apartments stand like mountains to the plaza's valley.

"This reduces the layers of uncertainty surrounding the project," said Laurie Schwartz, president of the Downtown Partnership.

But that may not help Ditter, despite the fact that six months ago he signed a new 10-year lease to stay in Charles Plaza. With the auction and change in ownership, he's worried that that agreement may be null and void. "We have two children, and the minute we have to close our doors, we have no income," Ditter said.

Pub Date: 10/08/98

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