Developers planning an upscale condo tower overlooking the Inner Harbor are forging ahead with the long-delayed project in anticipation of soon settling a lawsuit that has stalled construction.
The developers, a joint venture of Legacy Harrison Development of Baltimore and the Bush Companies of Virginia, expect to start work by September on the 414 Water Street condominiums, which will rise 21 stories atop an 11-story city-owned parking garage at the northwest corner of Water and Gay streets, adding another 30-plus-story tower to downtown's skyline.
Operating as LH Water Tower LLC, the developers plan to offer condos priced up to $600,000 at a time when downtown Baltimore is on track to double its number of residents by the end of the year.
"We had to defend a lawsuit, and that has taken some time," said Andrew A. Viola, vice president of Bush Construction Corp., which builds apartment and condo buildings primarily in Washington and Virginia. "We're in the throes of finalizing a resolution that will allow us" to proceed with closing a construction loan and starting to build, he said.
Robert Aydukovic, director of residential and economic development for the Downtown Partnership's Downtown Housing Initiative, has been working as an adviser to help mediate among those with an interest in the project, including the city's Parking Authority as owner of the garage, said Michael Evitts, a spokesman for Downtown Partnership.
Evitts said neither he nor Aydukovic could comment on negotiations or the city's role before a settlement is reached.
Officials at the Parking Authority, including the general counsel and the executive director, did not return calls yesterday. No one could be reached for comment in Mayor Martin O'Malley's office.
But the prospect of the city's participation in any settlement was indicated in court documents that noted that all parties in the lawsuit requested a postponement of a trial because of a "potential settlement subject to the approval of the Baltimore City Board of Estimates."
As the city's spending panel, the board votes on matters involving the city's finances.
A settlement would end a contentious dispute that has its roots in the state's savings and loan crisis of the 1980s.
Legacy Harrison, led by local developers Brian D. Morris and Dean Harrison, acquired the air rights above the Custom House Parking Garage in January 2002 for $1.7 million and initially planned to build a 351-unit apartment building. They shifted to condos to take advantage of strong demand for downtown residences at a time when local real estate prices have been rising sharply.
But after joining with the Bush Companies, plans to start construction last November were delayed after a limited liability company that owns the land beneath the city-owned garage filed a lawsuit in Baltimore Circuit Court in September. The landowner, 414 Land LLC, objected to a condo development instead of an office building as was planned as early as 1984 by the project's original developer, the lawsuit says.
The suit was the latest chapter in the site's tangled history since the garage was built in the late 1980s, with plans for an office building to be constructed above it in a second phase.
In 1987, the project came under control of the Maryland Deposit Insurance Fund, the state agency that liquidated assets of Old Court Savings and Loan, after developer Lon Gore defaulted on a loan from the S&L.
Under a 1987 agreement, the city sold tax-exempt revenue bonds to purchase the garage from developer Meredith Organization and leased the land, while the developer retained the air rights, which have since changed hands several times, most recently going to LH Water Tower.
In the September lawsuit, 414 Land LLC, which includes one of the original limited partners in the project, Kyle Gore, says construction of a residential building atop the garage would cause the landowner "substantial financial injury and damage."
Steven A. Allen, the attorney for 414 Land, said neither he nor his client would comment on the case.
The condo developer, LH Water Tower, argued in court documents that nothing in any previous agreement prohibits construction of residential condos.
Viola, of Bush Construction, said he is confident a settlement will pave the way for the $47.5 million-to-$50 million project to finally proceed.
One- and two-bedroom condos in the 312-unit building will sell from the mid-$200,000 range to $600,000, Viola said. The condos will feature gourmet kitchens, crown molding, ceramic floors and extras such as a party room, business center, fitness center and two-level cascading pool. The developers hope to start selling condos next month, to close on a construction loan by the end of August, start building in September and complete the first units by January 2007.