By Lorraine Mirabella, The Baltimore Sun
9:16 PM EDT, March 18, 2013
The Inn at the Black Olive, a 12-suite boutique hotel in Fells Point known for eco-friendly amenities, will be offered for sale at a foreclosure auction Thursday.
An auction by Alex Cooper Auctioneers Inc. is slated for 9 a.m. at the South Caroline Street site of the two-year-old inn, which touts features such as organic bedding and towels, harbor-view balconies and spa bathrooms with aqua-therapy tubs.
The inn is owned by the Spiliadis family, which operates the Black Olive Restaurant on Bond Street, also in Fells Point. Owner Stelios Spiliadis, contacted at the inn Monday, said he had no comment on the planned sale.
Court records show First Mariner Bank foreclosed on the hotel's developers, the Black Olive Development Co. LLC, in January, listing mortgage debt of $5.4 million. The developers also received a small loan from the state's Department of Housing and Community Development, part of a state program to assist small businesses and revitalize communities.
The hotel's value is assessed at $3.3 million for property taxation, according to state records.
The development team, Spiliadis and his wife, Pauline, and their son, Dimitris, were chosen through a competitive bidding process in 1999 by the city, which had owned the former gas station property across Caroline Street from what is now the Harbor Point development site.
The luxury hotel, which has a rooftop restaurant and gourmet market, opened in 2010, a decade after owners launched development plans. It features geothermal heating, sustainable wood furnishings and a green roof.
A suite for two for Saturday night was listed on its website for between $319 and $369.
As they were preparing to open the inn, owners told The Baltimore Sun in 2009 that they had set out to make the project a showplace for cutting-edge ideas in "green" architecture and hoped it would serve as a model for environmentally responsible buildings in the area.
"We don't want to be an island of green," Dimitris Spiliadis said. "We want to be a sea of green."
In January, the hotel was ranked third in the United States in the small-hotel category in TripAdvisor's 2013 Travelers' Choice Awards, based on feedback from travelers.
Despite such accolades, the recession and slow recovery have made it difficult for tourist-dependent businesses, said Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute.
And Baltimore hotels have an added challenge: more competition.
"Baltimore's putting a lot of hotel rooms in," Clinch said. "So it doesn't surprise me at all that there's some kind of a shakeout."
According to the 2012 State of Downtown Report, to be released Thursday by the Downtown Partnership of Baltimore, the area in and around downtown has added more than 970 hotel rooms in the last four years, including the 256-room, upscale Four Seasons Hotel Baltimore, which opened in 2011 in Harbor East. As of January 2012, the one-mile area around Light and Pratt streets had about 8,000 hotel rooms.
And prior to that, Baltimore saw a big influx of rooms in 2008, when its biggest hotel — the city-owned, 757-room Hilton Baltimore hotel — opened with a goal of boosting business at the Convention Center.
The Downtown Partnership's report shows 322 hotel rooms are under construction, with 1,325 planned to open through 2020.
As of January, occupancy rates over the past year have averaged 63 percent, compared with 62.8 percent for the year that ended January 2012, according to Smith Travel Research.
Downtown hotels had stronger occupancy levels, average daily room rates and revenue per room last year than the year before last and generally have outperformed other hotels within the region, according to the Downtown Partnership.
Some of the hotel competition is specifically high-end. The Four Seasons, for instance, appeals to the same well-heeled travelers as the Inn at the Black Olive.
Rod Petrik, a managing director at Stifel Nicolaus in Baltimore, who follows lodging, said small, high-end hotels in the city might find it tough to compete until occupancy becomes strong for the Four Seasons.
"Right now, Baltimore, downtown, has probably a few too many rooms," Petrik said. "Until you have the utilization rate of the convention center pick up, and that's always the issue. When you expand the convention center, you have to have rooms before you get that utilization rate up. But whenever there is not a group or convention in, the Hilton has been aggressive at discounting rooms."
For boutique hotels, "unless you have a strong name and a following, I think you're going to be impacted by the overall market," Petrik said. "It's tough to get the recognition and the traction when you're a 12-room hotel. You're really catering to a small niche."
Clinch, who wrote an economic impact study for the Four Seasons, said location may also be playing a role in the Black Olive's difficulties.
"Fells Point … doesn't have the same cachet that it used to have, given that the action is now moving toward Harbor East," he said.
Baltimore Sun reporter Jamie Smith Hopkins contributed to this article.
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