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Clock could run out for Westport developers

PropertyReal Estate BuyersReal EstateCourts and the JudiciaryCitigroup IncorporatedBankruptcyInner Harbor

A U.S. bankruptcy court is scheduled to decide Tuesday whether to grant more time to developer Patrick Turner, who has tried for 10 years to transform the empty Westport waterfront from grassy marsh to a bustling neighborhood.

The decision could end efforts by Turner, who was hailed as a visionary for his 2006 plan to create a $1.4 billion community of offices, townhouses and hotels on about 42 acres along the western corner of the Middle Branch of the Patapsco River, but who has struggled to find the money to push the project forward.

In court documents last month, Citigroup Global Markets Realty Corp., which made a $30 million loan in 2007 for early work on the development, asked the court to deny an extension to Turner's team, which has been trying to find investors to buy the note since 2010, when it first came due.

The loan is secured by two Turner affiliates that each own a portion of the property. One is in bankruptcy, while the other is not. Turner's team has asked for this extension to bring on another investor as part of its reorganization plan.

Citigroup is conducting a foreclosure auction Friday of a portion of the site not involved in the bankruptcy. Last month, Citigroup also moved in court to make Turner and Neil Ruther, another investor in the project, personally liable for the loan.

Attorneys for the parties involved in the cases declined to comment. Leaders in Westport, where Turner built up a reserve of good will through donations and block party appearances, said they hope his plans succeed but recognize the severity of the problems.

"It would have been really nice," said Ruth Sherrill, president of the Westport Improvement Association. "People want to see it come up, but I just don't see it right now. ... I don't think he has the money to do what he wants to do."

If the land does not remain with Turner, some said they are confident another developer will emerge to take his place.

Loren Duffey, a Long & Foster real estate agent, who has worked on deals in Westport, said he has started to see interest in the area again, perhaps spurred by the possibility that the legal logjam will soon clear.

"One way or another, it's going to move forward and I think good things will happen to the waterfront," he said. "I think at this point, everybody is just looking forward to the development moving forward."

Turner, whose other projects include the Silo Point condominiums, started assembling the properties in the area in 2004, spending more than $13 million to acquire the land between Waterview Avenue and Interstate 95. Surrounded by a chain link fence, the property — a grassy field and sand flats that once housed a glass factory and power plant — sits across the light rail tracks from Westport, a small neighborhood with patches of blight located south of the stadiums and between major highways.

The onset of the recession disrupted Turner's plans. In 2010, after the Citigroup loan came due, the bank agreed to hold off on foreclosure if Turner's group could find someone to buy the note.

In November 2012, after 11 extensions, Citigroup moved to foreclose on the properties, but one of the two entities owning the land was forced into bankruptcy in February 2013, halting the proceedings.

Turner now says he has found a new backer and has asked the bankruptcy court for more time to hammer out the details, but in a court filing, Citigroup called that a "bad faith effort" to buy time and avoid losing the land.

"For all intents and purposes, the Westport Project has made no [meaningful] progress since [Citigroup] extended the Loan in July 2007," the bank said in a court filing.

Andrew Billig, a partner at A.J. Billig & Co. Auctioneers, said he does not know if Friday's auction will go off as planned.

He said he has received about a dozen calls from parties interested in the land.

"It's a great piece of property and an excellent opportunity for somebody with vision," Billig said. "There's a limited number of parties that have the capability of purchasing a property like this."

Westport Neighborhood Association president Keisha Allen, also the executive director of the Westport Community and Economic Development Corp., said the neighborhood has not been hurt by the disputes over the waterfront properties and does not consider the lack of development a "bad thing."

"As is, we have a beautiful view of the water," she said. "Maybe it's not developed into a metropolis as it's supposed to be, but we're looking at the Middle Branch. It's very beautiful at night."

Still, Allen said she expects something like Turner's plan to take hold eventually.

"It's when. It's not if," she said. "It's a matter of time."

nsherman@baltsun.com

Copyright © 2014, The Baltimore Sun
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PropertyReal Estate BuyersReal EstateCourts and the JudiciaryCitigroup IncorporatedBankruptcyInner Harbor
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