Creditor objects to sale of facility Columbus Center's former head calls price 'minuscule'

December 31, 1998|By Eric Siegel | Eric Siegel,SUN STAFF

The former head of the Columbus Center is criticizing the sale of the financially insolvent marine biotechnology facility in Baltimore's Inner Harbor to the University System of Maryland, calling the $650,000 purchase price a "relatively minuscule contribution."

In a formal legal objection to the sale, J. Stanley Heuisler, the founding board chairman and former chief executive officer of the nonprofit corporation created to set up and run the center, complained that the price would allow the university system to assume ownership of the facility for less than 1 percent of its value.

"This seems especially hard to justify in light of the fact that the state contributed less than 13 percent, and the University contributed nothing, to the project's capital budget," Heuisler said in a letter last week to Baltimore Circuit Judge Joseph H. H. Kaplan, who is presiding over the building's receivership, a status similar to bankruptcy.

Heuisler -- who has claimed $383,000 in unpaid money from his employment contract and reimbursement of a loan guarantee -- is one of dozens of creditors of the Columbus Center to object to the sale.

If the sale is approved in its current terms, most creditors seem likely to get about a quarter of the money they are owed, based on the center's claims and assets.

Though Heuisler questioned in court papers why the new owners are not being held responsible for paying more of the debts, he said he was not seeking to "substantially amend" terms of the proposed sale. Instead, he said, the court should ensure the new owners put enough money and scientists in the building to justify the large initial public investment.

In a second letter, dated Monday, Heuisler asked for a meeting with Kaplan and the Columbus Center's court-appointed receiver, Howard A. Rubenstein.

Rubenstein, in a filing last week, asked Kaplan to allow the sale to proceed without additional conditions.

Rubenstein said the university system was the only potential buyer that met legal requirements that the facility be used only for education or research and that was also interested in using the entire building.

The University of Maryland Biotechnology Institute's Center of Marine Biotechnology occupies about two-thirds of the building.

No other organization or governmental institution was interested in buying the Columbus Center, Rubenstein said, adding that Heuisler did not make a higher bid for the property.

Rubenstein could not be reached yesterday. Andrew Jay Graham, an attorney for Heuisler, said he saw no need to comment beyond Heuisler's letters.

Last month, the university system agreed to buy the Columbus Center, paying $650,000 for a long-term lease of the city-owned land on which the facility stands.

The university system also agreed to pay $100,000 for some of the building's equipment, and to forgive $1 million owed it by the center.

The deal also calls for the city and state to forgive $4.8 million owed them for completing construction of the $160 million facility, which was built with federal, state and city money.

A public auction this month of the center's assets, including exhibits, brought in $140,000.

About $12 million in creditors' claims have been filed against the center since it declared in June that it was unable to pay its debts. If approved, the proposed sale would roughly halve that $12 million, based on total debt forgiveness of the city, state and university system.

In addition, Rubenstein said in court papers that the university system has entered into an agreement to use steam utility service for the Columbus Center from Trigen-Baltimore Energy Corp. That action will "drastically reduce" the $3.5 million claim against the center by Trigen, most of which was for profits the company anticipated receiving over the next 15 years under the terms of a previous contract.

In another development, Rubenstein revealed in court papers that he had been notified last week that the federal Food and Drug Administration would not be consolidating its seafood toxin researchers at the Columbus Center, a consolidation that had been considered a key component of the center.

Rachel Zelkind, an assistant attorney general representing the university system in the Columbus Center receivership, confirmed the FDA's decision. She called the decision a "disappointment" that would cost the center several hundred thousand dollars a year in lost rent and expenses. She said the FDA researchers would be using another facility near the University of Maryland, College Park campus.

"It means less money and more space to fill" at the Columbus Center, Zelkind said of the FDA's decision.

Slightly more than a year ago -- Dec. 14, 1997 -- the Columbus Center closed its Hall of Exploration, seven months after it opened, because of financial problems.

Pub Date: 12/31/98

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