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Business

Ray Lewis' Hunt Valley project stalled, subcontractors owed over $1 million

Real EstateLaws and LegislationRestaurant and Catering IndustryJustice SystemRay LewisBusiness

The bowling alley business dream of Baltimore Ravens star Ray Lewis lies half-built in a far corner of the Hunt Valley Town Centre. Cinder blocks and plywood cover the entrances and windows; rubble and metal vents sit piled inside a chain-link fence.

Lewis announced MVP Lanes with great fanfare more than two years ago. It was supposed to include a posh sports-themed bowling alley, restaurant, sushi bar and live radio booth — and create more than 100 service and construction jobs on the site of a former Wal-Mart.

But the recession sacked the project developed by Lewis, his attorney and other unnamed partners. It has devolved into a swirl of lawsuits. Now, MVP Lane's subcontractors complain they're owed more than $1.1 million, even as Lewis, who signed a $22 million football contract three years ago, turns to other business ventures.

Some of the subcontractors have filed legal actions against MVP's general contractor, claiming they have yet to be paid for their work. Those legal claims amount to about $660,000, while other contractors say they're owed another $500,000, but don't have the money to pursue a lawsuit.

MVP itself has filed a federal lawsuit against a New England financier, claiming that he "duped" the partnership, forged documents and failed to deliver funds that could have revived the project.

The idled project has left behind hard feelings.

"I've been in business for over 40 years, with over 1,000 customers," said Jerry Strieter, president of Hyattsville-based Southern Insulation, which won a $168,240 court judgment last year against the project for fireproofing work. This "is the only customer that's totally stiffed us in all that time."

Still, Lewis' business partner, attorney Marc Rosen, remains optimistic that the project — developed by a partnership that limits the personal liability of its members — can be restarted.

MVP's attorney, Jeffrey Kotz, said in an email that the partnership "is diligently working on replacement financing."

Lewis did not respond to repeated attempts to reach him for a comment. A Ravens spokesman referred The Baltimore Sun to Rosen and MVP Lanes.

When Lewis unveiled MVP Lanes in September 2009, he was beginning to prepare for life after 14 years in the National Football League. A star linebacker, Lewis wanted to diversify his business interests. Earlier that year, he shuttered a restaurant, Ray Lewis' Full Moon Bar-B-Que, in Baltimore's Canton neighborhood, to focus on the Hunt Valley project, he said at the time.

MVP Lanes was part of a strategy to create a conglomerate of businesses centered on his athletic persona. His enterprise called The RL52 Group consists of a charitable foundation, a clothing line, a fitness dietary supplement and a merchant payment processing service. He recently launched a cycling workout video business, RL52 Cycling, and has dabbled in commercial real estate.

The RL52 Group website, however, does not mention the MVP Lanes project. And the MVP Lanes website — MVPEntertainment.com — is currently offline. Only a Facebook page remains.

Like many business and real estate partnerships today, the MVP Lanes project was organized as a limited liability company, MVP Lanes LLC. LLC members and investors are unidentified and generally are not personally liable for the LLC's debts

"It's a liability blocker," said Dan Goldberg, a University of Maryland Carey School of Law professor. "You put your money in as a member, and that's pretty much what you agree to lose. … That's the reason why you do LLCs. Anybody dealing with an LLC knows the deal, knows the rules."

In the past, Rosen disclosed that he is MVP Lanes' managing member and Lewis is the majority investor. Rosen is a trial lawyer and former chairman of K Bank, a now-defunct Owings Mills bank that failed in 2010 over bad construction loans and was taken over by state regulators.

When interviewed by The Baltimore Sun at the project's outset, Rosen talked about expanding the MVP Lanes concept to other cities where there were strong professional sports franchises.

As is typical with such large projects, the general contractor chosen by MVP Lanes, Peak Contracting, hired several smaller firms to do such work as fireproofing, ventilation, concrete construction and plumbing. Legally, Peak owes the money to the subcontractors, not MVP Lanes

Peak and the subcontractors worked into the summer of 2010 but pulled back when bills weren't getting paid, they said. In the summer of that year, financing for the project fell through after a bank couldn't provide an expected loan, according to Rosen at the time.

Bryan Byrd, president of Peak Contracting, kept in frequent touch with the subcontractors through emails and weekly meetings, a few of which were obtained by The Baltimore Sun.

"As you are aware," Byrd wrote in an Aug. 30, 2010 email, "no substantial work is ongoing on the job site by subcontractors. … There has been progress on the financial situation for both the permanent loan and the bridge loan but there is not an actual date set."

For months, MVP sought financing from other banks, as well as the U.S. Department of Agriculture, which offers business and industry guarantee loans, according to another Byrd email.

"I just spoke with Marc Rosen and he has made significant progress of funding approval," Byrd wrote to the subcontractors on Oct. 19, 2010. "So much so that a meeting with the USDA representative is scheduled for the first week of November. He also has four banks looking at this same loan structure, plus a private lender. If something breaks before the meeting with the USDA, I will be sure to contact you again."

Byrd did not return requests for comment via email, and his company's main phone number has been disconnected.

To protect their claims, the subcontractors started filing liens against the project in Baltimore County Circuit Court. Peak Contracting, however, has not filed a lien against MVP, and it's unclear how much the general contractor is owed.

Looking to finally secure a construction loan, Rosen met with Martien Eerhart, head of RI Hispanic Banc Group in April 2011, according to court records. It's unclear from documents filed in federal court how the two were introduced.

In court papers, Rosen wrote that Eerhart's RI Hispanic Banc was in the business of leasing a financial instrument known as a "standby letter of credit." MVP Lanes struck a deal that allowed it to lease a $65 million letter of credit for 366 days for $90,000.

MVP Lanes planned to use that letter of credit as collateral for a construction loan, according to its federal lawsuit against RI Hispanic Banc. But, according to the suit, RI Hispanic Banc took MVP's money, and allegedly never delivered the letter of credit.

Rosen wrote in court papers that the failure to receive the letter of credit would have "devastating, irreversible consequences."

"MVP will go out of business, and perhaps have to file bankruptcy if this funding fails," Rosen wrote in the federal complaint.

In court filings, Eerhart and RI Hispanic Banc denied any wrongdoing. He and his attorney could not be reached for comment.

The Hunt Valley Town Centre's owner, Greenberg Gibbons Commercial of Owings Mills, has told MVP that it could seek another tenant, if a willing one surfaces and MVP's financing isn't completed, according to the lawsuit.

Greenberg Gibbons did not respond to requests for comment.

"MVP's first objective is to save the Hunt Valley location and if circumstances prevent that from occurring, then MVP will relocate to another wonderful site in our community," said Kotz, MVP's attorney.

Lewis, Rosen and MVP Lanes recently succeeded in recouping the $90,000 fee in their lawsuit against Eerhart's RI Hispanic Banc Group. A U.S. district judge ordered the escrow agent to return the money to MVP in early February.

The subcontractors say they understand that Rosen and MVP Lanes were distracted by the problems with Eerhart. But MVP Lanes and Peak can't use that as an excuse to not pay the subcontractors, they said.

Perry Sparr, head of Sparr Construction Services of Kingsville, which did the interior concrete work at MVP Lanes, said he is owed $153,000, the largest amount ever owed to him. He doubts he'll ever get that money from MVP Lanes and Peak.

"We might get stiffed for $800 here or there, but nothing like this," Sparr said. "My brothers and I had to personally give the company a loan to keep our suppliers happy. We kept working when we probably shouldn't have."

John Bongiorno, owner of J.B. Vincent & Co., a Middle River plumbing contractor, said MVP Lanes and Peak owe him $146,105.

"I thought it would be a high-profile job," said Bongiorno. "I gave them a good deal, thinking it would be a quick pay. ... But I've had to lay off three guys because of the job. That's three families out of work."

Tony DiJulio, who owns Accu Enterprises, a Kingsville firm that installed metal studs, drywall and acoustic ceilings at the bowling alley, said he is owed $142,000. He's borrowed money to keep his business afloat.

"It's sad they can't ask the wealthy people involved to step up," DiJulio said.

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