Harborplace, the Inner Harbor retail attraction that decades ago spurred tourism in downtown Baltimore but recently has struggled with vacancies and management problems, has been put into receivership, paving the way for a possible sale.
A Baltimore Circuit Court judge appointed a receiver to take control of the pavilions on Pratt and Light streets, taking the property out of the hands of owner Ashkenazy Acquisitions Corp. The New York real estate company with a portfolio of trophy properties bought Harborplace in 2012.
Under a May 30 consent order signed by Judge Gregory Sampson, New Jersey-based IVL Group LLC, as the receiver, will take immediate possession of the center and manage and lease it on behalf of Deutsche Bank Trust Co. Americas, the trustee for mortgage holder UBS-Barclays Commercial Mortgage Trust.
IVL also would be responsible for putting the property up for sale, if requested by the trustee.
Representatives of Ashkenazy and of IVL could not be reached Monday night.
Deutsche Bank Trust had filed an emergency petition in April to appoint a receiver, saying Ashkenazy defaulted on its $76 million loan by missing a payment due March 6 and by failing to pay a judgment against it in a 2018 lawsuit. In that case, tenant Bubba Gump Shrimp Co. alleged that Ashkenazy failed to maintain common areas of the Light Street Pavilion and protect the shopping center and won a $1.2 million judgment in Baltimore Circuit Court. On March 28, Deutsche Bank notified Ashkenazy that it was in default.
The Evening Sun
Deutsche Bank “believes a receiver can step in and help to ameliorate Harborplace’s unfortunate decline over the past several years,” the petition said. “Harborplace was once called ‘the crown jewel of Charm City,’ but no more.”
The petition cited a March 29 Baltimore Sun story that highlighted high vacancies and dire financial straits for both Harborplace and The Village of Cross Keys, another high-profile Baltimore retail center owned by Ashkenazy. At Harborplace, several longtime tenants had moved out during long-delayed renovations to the pavilions. As of March, Ashkenazy was in danger of defaulting on tens of millions in loans for the two properties.
Deutsche Bank also recently had discovered that Ashkenazy allowed multiple vendors, including several responsible for operations and safety, to go unpaid for months because of insufficient monthly rent to cover expenses, the petition said. Deutsche Bank was given no assurance if or when the expenses would be paid.
Judge Sampson’s order prohibits representatives of Ashkenazy from entering or disposing of the property or collecting income from it.
Harborplace, built by The Rouse Co., has served as a focal point for visitors to the Inner Harbor since opening in 1980.
Ashkenazy had begun renovations to modernize Harborplace’s appearance, but the work dragged on and tenants such as Urban Outfitters, Five Guys, Noodles & Co., La Tasca, Edo Sushi, Lenny’s, Fire & Ice and The Fudgery closed. Work had recently been completed on the Pratt Street pavilion and new leases were signed with Build-a-Bear, Mason’s Famous Lobster Rolls and Banana Republic, which moved from the Gallery mall across the street.
But vacancies made it difficult to make payments on the commercial mortgages. As of March, Ashkenazy owed $67 million on Harborplace and $21 million for Cross Keys.