HarborView developer to lead Ritz-Carlton plan

Giannasca faces design, cost hurdles

choice is applauded

Development

May 24, 2000|By Meredith Cohn | Meredith Cohn,SUN STAFF

An architect by training, Edward V. Giannasca II knows a good-looking hotel on paper. But local observers are watching to see if the just-named head of a company seeking to build a $100 million luxury hotel complex on Baltimore's Inner Harbor knows how to make it real.

Those working on and watching the proposed Ritz-Carlton said they're encouraged by the 38-year-old Giannasca, who's been helping develop the HarborView residential community, next to the proposed Ritz-Carlton hotel site, for more than a decade.

Few seem to oppose the idea of a luxury Ritz-Carlton hotel. But a tough financing climate, design constraints and high costs are some of the hurdles to developing a profitable five-star hotel on Key Highway. And fresh in everyone's memory is a year's worth of failed efforts to get the combination hotel, condominium and office project off the ground.

Assigning a local guy with a visible track record to lead the project called The Residences at the Ritz-Carlton Inner Harbor couldn't hurt, observers said.

"The commercial real estate industry is littered with the failed projects of people who did not know what they were doing," said Robert J. Robidoux, a senior vice president of William S. Wise Inc., a commercial real estate appraiser in the Baltimore-Washington area.

"Real estate is local," said Robidoux, who is familiar with Giannasca. "Having someone savvy to market issues and local issues can make or break a project."

Giannasca, who declined to be quoted for this article, has not been in the spotlight of a high-profile development before, and some residents and city officials never met him when he worked on HarborView, still under development. That project also left some sore points in the neighborhood, said M.J. "Jay" Brodie, president of the Baltimore Development Corp., the city's quasi-governmental economic development arm.

Giannasca resigned his position as vice president with the HarborView development company this month to become president and chief executive officer of L.I. Square, a New York-based company controlled by Phil Pilevsky, who also heads a shopping center real estate investment trust. HarborView is expected to sell the property for the hotel project.

In a statement, Pilevsky said L.I. Square's board will provide financial support and guidance to Giannasca, whom it chose for the leadership role because of his property development accomplishments.

Before HarborView, Giannasca said he worked as an architect on renovation and development projects at his father's New York firm. His architectural degree is from the New York Institute of Technology. A native of Rockaway Beach, N.Y., he lives in Harford County with his wife, Suzanne, and four sons.

Dean Adler, a principal in the Philadelphia-based venture capital firm Lubert-Adler, which invested in the HarborView project, called Giannasca energetic and detail-oriented. His firm doesn't invest in new hotels, but he said a strong local leader is a major factor in investment decisions."You can't do it from New York," he said.

Someone has to navigate the local system, agreed Tom Rowe, of Princeton, N.J.-based Michael Graves Architects and the Ritz project's lead designer.

Rowe said he was growing frustrated with the hotel' slow pace until Giannasca was hired. He said it showed the developers were serious about building because Giannasca, whom he'd known from work on the HarborView project, has already developed locally.

The Baltimore Development Corp.'s Brodie, said Giannasca has a tough job ahead of him.

He pointed out that as interest rates rise, the already jittery hotel financing industry could become even tougher. Hotels, unlike office space and residences, cannot be leased in advance, which requires faith from investors and a lot of market research from developers.

Financial experts say the money likely cannot be secured until there's an official commitment from Ritz-Carlton to lend its name, an actual design for the building and a total cost.

Talks also are pending with the city and Federal Hill residents, who are concerned about aesthetics and views from their neighborhood. . And the developers say they'll need inclusion in a state Enterprise Zone, which provides tax credits.

Brodie said just one Enterprise Zone designation can be made a year in the city and there are competing interests for next year's slot. He's waiting for Giannasca to show him the need for public assistance.

"We never even got this far with [the former developer Neil] Fisher," Brodie said. "We were concerned about his ability to perform. I've seen Mr. Giannasca's work, and I'm more optimistic."

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