After 2 years, completion of Ritz is still in question

Funding problems, legal issues persist

November 03, 2001|By Meredith Cohn | Meredith Cohn,SUN STAFF

In the 2 1/2 years that a developer has been pitching a Ritz-Carlton on Baltimore's waterfront, the luxury hotel and condominiums have never managed to win full support from neighbors, finalize financing or escape legal problems.

And even as the developer, New York-based L.I. Square Corp., began this week the process of buying land for construction, those factors could still sink the city's chances for the five-star project.

Despite the obstacles, L.I. Square's president says he's confident that there will be a hotel.

"There are so many things affecting where we are," said Edward V. Giannasca II, company president. "But this is a unique project and a great project for Baltimore, and it's going to be built."

The Ritz was first envisioned by Florida developer Stuart C. "Neil" Fisher on an abandoned Bethlehem Steel propeller yard on Key Highway. It has evolved into 225 hotel rooms and 97 condominiums - selling for $475,000 to $3 million - in a series of buildings rising up to six stories.

Fisher stepped aside as the developer in January 2000 after news surfaced that he had no apparent assets, was refusing to pay a fraud judgment, and past developments ended in lawsuits and bankruptcies. This week, a Baltimore Circuit Court judge signed an order freezing his assets related to a proposed community for the deaf in Baltimore until a lawsuit alleging fraud is settled. He maintains links to the Ritz project, however, and his wife stands to earn a large fee when the land deal closes.

L.I. Square has been working hard to win and keep support for the project but has missed a series of deadlines to find financing, buy the land and break ground.

That has left many in Baltimore skeptical.

"You said the deal would close in January. It's been nine months. You haven't closed. When will you? Being honest would be good," said Ian Neuman, president-elect of the Federal Hill neighborhood association at a meeting Oct. 16 with L.I. Square's Giannasca.

Giannasca responded that without public subsidies to offset construction costs for lenders, "financing has taken longer then expected."

The economy was sagging before Sept. 11, and the terrorist attacks only sent the financing community further into retreat, he acknowledged.

But since the Ritz was first pitched, the project's budget has more than doubled from $80 million to $165 million.

Some costs have been trimmed over time. The proposed hotel is now smaller - it started out as a 350-room project. More recently, L.I. Square asked the city for permission to reduce the number of parking spaces by more than a third in the underground garage. The Ritz is legally bound to build 800 spaces and must get City Council approval to change the number, a move the neighborhood association voted to oppose for fear that guests who couldn't find room in the garage would park on crowded residential streets.

Other changes, including the height and design of the buildings, have been made to address community concerns.

Mayor Martin O'Malley supported the property's inclusion in a state enterprise zone, which would afford tax breaks to the hotel once it's operating. He said last week that he would not comment on the private development process.

M.J. "Jay" Brodie, head of the city's economic development arm, the Baltimore Development Corp., has repeated often over the past several months that despite his optimism, he would "like to see dirt move. Until then, it's not a done deal. Many people in this town have carried land for a long time without building anything on it."

Those working on the Ritz say it is a tough process that has faced delays, but they have faith in the new development team.

"Everyone wants to see a Ritz," said Richard Swirnow, who is a part-owner of the land. "We're here to make it happen."

Swirnow had agreed to sell his property to Fisher, the original developer, for an undisclosed sum. But Fisher said he signed over his option to L.I. Square for a fee he once said would be at least $3.35 million - the same amount as the state's assessed value on the property.

This week, he said that the figure is much lower and that his wife, Tamara Jeanne "T.J." Mize, will get the check because the option is in her name.

"I keep in touch with them daily," Fisher said. "They've exercised my wife's option, and she should get a check soon. Everybody has to be happy about this. I know of nothing that will derail it now. ... When the old warehouse comes down, then maybe people in Baltimore will become believers."

Fisher said he's no longer involved in the project's development. And the Ritz-Carlton Hotel Co., which agreed to manage the hotel, demanded in writing that Fisher not have an ownership stake.

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