Downtown parcels sit, wait for funding

Developers blame preservation battles for stalling hotels

November 15, 2001|By Scott Calvert | Scott Calvert,SUN STAFF

Two holes in the heart of downtown's financial district are ringed by rickety metal fences. They mark the spots where decades-old buildings met the wrecking ball and where $150 million of development is supposed to go.

Yet nine months after preservationists lost a fight to save one of the buildings - the 84-year-old former home of Sun Life - it remains unclear when anything might be built on either site near Light and Redwood streets.

"It's a real embarrassment," said Robert C. Embry Jr., president of the Abell Foundation, who tried to save the building. "It's the front porch, the front lawn" of downtown.

The lack of progress is a sore spot for those who tangled earlier over the corner's future. Embry said it underscores the need for the city to ensure that a developer has "ironclad" financing before allowing demolition.

Kevin Urgo, whose Bethesda company plans a 176-suite Marriott Residence Inn on the southeast corner, said groups such as Preservation Maryland created this situation by fighting his project for more than a year.

"If it were not for the preservationists and the delays associated with that process, this hotel would have been open for business already," he said. "They are the sole cause for this hole in the ground."

The lack of progress in an area once known as "the Wall Street of the South" owes much to the bleak economy. Hotels were planned for both sites during a boom time, but that industry has been battered since the Sept. 11 terrorist attacks.

"What really has slowed down is finding financing for the hospitality sector - hotels," said M.J. "Jay" Brodie, president of the Baltimore Development Corp., the city's development arm.

Brodie said the two projects are the only ones downtown to be sidetracked by this fall's tumult. On the west side, Bank of America still plans to build 383 apartments, shops and a parking garage. On East Pratt Street, work has begun on Lockwood Place, a shopping-parking-office complex.

Two days after the attacks, Brodie's office received a call from Donald J. Urgo and Associates. "They immediately called and said financing they thought they had they don't have," Brodie said.

Kevin Urgo, the firm's vice president of development, said the aftermath "caused some setbacks" and added, "We have not completed the financing."

The $25 million to $30 million hotel will move ahead, he said, maybe in two months.

Tyler Gearhart, executive director of Preservation Maryland, noted that Urgo's site was cleared in February, more than six months before the attacks. "The project hadn't been built," he said. "That's certainly not our fault."

Last fall, preservationists visited a judge late at night to win a temporary halt in demolition. They were upset with Urgo's decision to demolish because the city and the Abell Foundation had offered millions of dollars in tax breaks and loans to help the company renovate the Sun Life building at 109 E. Redwood St. Urgo's firm demolished the former Merchants and Miners building next door, at 17 Light St., last fall.

The other stalled project belongs to developer Joseph Clarke, who knocked down the Southern Hotel, on the north side of Redwood, last year to make way for a $120 million tower of more than 30 stories. He envisioned a parking garage, hotel and offices.

The hotel is on hold now, he said, though it's not clear for how long: "I hope it's only a year."

"Hotels are a little difficult to finance, as you may have noticed," he said. He may build the 800-car garage first, and possibly add a hotel or offices on top later.

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