UM buying marine center School to pay $750,000, forgive $1 million Columbus Center debt

'A good deal all the way'

Months of uncertainty end for Inner Harbor biotech institute

December 02, 1998|By Eric Siegel | Eric Siegel,SUN STAFF

The University of Maryland is buying the financially troubled Columbus Center, ending months of uncertainty about the future of the much-ballyhooed marine biotechnology institute in Baltimore's Inner Harbor.

The university will pay $750,000 in cash and give up its claim on $1 million owed it by the center. As a key component of the deal, the state and city are forgiving another $4.8 million owed them for completing construction of the building.

Combining research facilities and a public exhibit hall, the Columbus Center was seen as a crucial boost to the redevelopment of the eastern edge of the Inner Harbor. But its Hall of Exploration fell far short of being the tourist attraction officials had expected, resulting in its financial collapse.

Last June, just three years after the center opened, managers declared it insolvent.

The university -- which occupies about two-thirds of the site -- will expand its research programs in aquaculture and Pfiesteria, the group of microorganisms responsible for fish kills on the Eastern Shore. It also hopes to rent space to other marine research groups.

The university will take title to the building, but will pay $650,000 for the long-term lease of the city-owned land. It also will pay $100,000 for some of the facility's equipment.

Those funds will be used to pay off dozens of creditors of the Columbus Center Development Corp., the nonprofit group that ran the center but has been operating under control of a court-appointed receiver.

Terms of the takeover of the Columbus Center -- built with $160 million in city, state and federal funds -- were outlined in documents filed in Baltimore Circuit Court.

The $1 million claim the university is giving up is for excess operating costs for which it was not reimbursed. The Maryland Industrial Development Financing Authority will forgive a $2.5 million private loan guaranty to the center, and the city will forgo collecting $2.3 million in principal and interest it has been owed since 1996.

Together, those claims comprise the bulk of the $7.5 million in debts the center said it owed in June, though additional claims have been filed since then.

"It's a good deal all the way around," Howard A. Rubenstein, the receiver, said yesterday. "I have no problem with the deal, and I don't think the creditors will either."

An auction of the center's equipment will go on Tuesday as scheduled, he said, though the items bought by the university will not be sold.

Circuit Judge Joseph H. H. Kaplan, who is presiding over the receivership, gave creditors until Dec. 23 to file objections.

Approvals necessary

Aspects of the deal also must be approved by the city Board of Estimates and the state Board of Public Works, officials said, and the General Assembly would have to appropriate money to pay for the lease and equipment.

State budget Secretary Frederick W. Puddester said he has begun discussing the takeover with key legislators.

"I think they understand the importance of the research home that we're acquiring," he said. "I think they understand the implication of not having it.

"It's 100,000 square feet of research space for $650,000."

Efforts to reach city officials last night were unsuccessful.

Maryland's board of regents already has signed off on the deal, according to Rachel E. Zelkind, an assistant attorney general representing the university.

The university has been paying for maintenance of the entire building since December 1997, when the center abruptly closed its high-tech exhibition hall just seven months after it opened.

A 'stable home'

A key factor in the decision to take over the building, Zelkind said, was a desire to create a "stable home" for scientists at the university's Center of Marine Biotechnology.

"When it became apparent no one else was stepping up to take over the building, it became a concern of the researchers," she said.

Zelkind said the university hoped to complete a deal to provide space for seafood toxin researchers from the U.S. Food and Drug Administration and revive the center's educational programs for secondary students, but said it had no plans to reopen the exhibition hall.

Columbus Center Development Corp. had hoped that paid admissions to the Hall of Exploration, a public attraction that included a model of a giant rockfish, would help defray the center's operating costs.

But the hall drew only a quarter of the visitors expected, creating a cash crunch that led to the center's insolvency.

Pub Date: 12/02/98

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