UM seeks Columbus Center takeover Move comes as auction is set to sell assets of sinking marine facility

November 24, 1998|By Eric Siegel | Eric Siegel,SUN STAFF

The University of Maryland is negotiating to take over operation of the financially troubled Columbus Center in Baltimore's Inner Harbor amid preparations by a court-appointed receiver to auction the marine biotechnology facility's assets.

University marine biotechnology researchers lease about two-thirds of the center, which declared itself insolvent June 30, saying it was unable to pay $7.5 million in debts.

Since December -- when the center abruptly closed its high-technology exhibition hall seven months after it opened -- the university has paid the maintenance costs of the $160 million building, not just the portion for which it is responsible under its 25-year lease.

The university says it could use more space for its growing research programs in aquaculture and Pfiesteria, the group of microorganisms responsible for fish kills on the Eastern Shore.

The Columbus Center's receiver and a lawyer for the university confirmed that they were involved in takeover talks, but they revealed few details of the discussions.

"We have met with the attorney general's office relating to the lease and relating to some of the equipment," said Howard A. Rubinstein, the receiver.

"I feel there is going to be a breakthrough in the next several days," he added.

Rachel Zelkind, an assistant attorney general representing the university, said, "There are continuing discussions with the receiver about the property."

On Sunday, A.J. Billig & Co. began advertising a "receiver's auction" next month for the Columbus Center's equipment, including computer and laboratory equipment and walk-through exhibits and displays.

The date of the auction was set for Dec. 8 at the white-canopied center on the pier east of the National Aquarium in Baltimore.

Jack Billig, owner of the auction company, said some assets could be bought by an "existing tenant prior to sale." He said the equipment was being "assembled and tagged" and said his company hoped to have a catalog available by the end of the week.

Last month, Baltimore Circuit Judge Joseph H.H. Kaplan authorized using A.J. Billig & Co. to auction the center's property.

Proceeds from the auction would be used to pay dozens of creditors, including $2.5 million owed to the state and $2.3 million owed to the city, according to court records.

The center owed NationsBank $3.5 million when it was put into receivership June 30. But that debt, which was secured by contract rights and revenues, has been reduced to less than $1 million by payments of $241,000 from a cash reserve and $2.4 million from guarantors of the loan.

Those guarantors -- including the Abell Foundation and Bell Atlantic -- have filed claims as creditors, court records show.

Among those filing claims against Columbus Center is J. Stanley Heuisler, the center's former president. Heuisler is seeking $308,490 in unpaid money from his employment contract, based on monthly salary and benefits of $14,690 a month over 21 months. He is also seeking $75,000 for reimbursement of payment of a personal guarantee to NationsBank.

One large creditor not included in the center's original calculation of its debts is Trigen-Baltimore Energy Corp.

This month, the company filed a claim for $3.5 million, including $134,000 in unpaid steam service; $1 million for extending a steam line to the center; and $2.4 million in anticipated profits through 2014.

As creditors have filed their claims, the University of Maryland has increased its number of researchers, from about 200 in June to about 240, said S. Gaylen B. Bradley, vice president for the university's biotechnology institute.

Most of the expansion has been in grants to study Pfiesteria, he said, but the university would be interested in expanding and consolidating its aquaculture programs, which are housed at the center and a separate facility in Fells Point.

"The research is growing and expanding. We could utilize more space," said Bradley.

Bradley said the auction would include items that were part of the center's public spaces, including two teaching laboratories and a computer laboratory, but would not include the biotech institute's equipment.

Bradley said there was concern that the center's financial troubles might quash the chances for landing a long-term lease with the federal Food and Drug Administration to consolidate the agency's seafood toxin researchers at the center.

"That would be a real pity," he said. "There's a real synergy between the FDA and us."

The Columbus Center -- built on city-owned land with state, federal and city funds -- opened its research operations in 1995.

Officials had hoped that paid admissions to its Hall of Exploration, a public attraction that included a giant model of a rockfish and a walk-through human cell, would help defray the cost of operating the center.

The hall drew a quarter of its anticipated visitors, causing a cash crunch that forced the center to default twice on bank loans, close to the public and declare insolvency.

Pub Date: 11/24/98

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