Former Congress Hotel sold for $2.35 million

The historic Congress Hotel on Baltimore's west side, built in 1905 as one of the grande dames of city hotels and converted to housing nearly a decade ago, sold at a foreclosure auction Tuesday for $2.35 million.

The renovated 36-unit apartment building was bought back by its lender, Congress Financial LLC. That entity is made up of "investors with significant local ties," said Y. Jeffrey Spatz, an attorney representing the winning bidder at the auction outside the Clarence M. Mitchell Jr. Courthouse. Spatz and the bidder, who wouldn't give his name, declined to talk about plans for the property.

The eight-story landmark, built as Kernan's Hotel, became one of the first redevelopment projects to bring housing to the city's west side when revitalization efforts began in recent years.

The sale includes the apartments, a restored ballroom and mezzanine, and the fabled Marble Bar — named for its 70-foot Italian marble bar. The bar became a popular hangout from the late 1970s through the mid-1980s that attracted bands such as Squeeze, the Psychedelic Furs and R.E.M.

An affiliate of Baltimore developer Struever Bros., Eccles & Rouse, which converted the West Franklin Street hotel to apartments in 2001, defaulted on a nearly $2.8 million loan in February, court records show. The note was purchased by Congress Financial in July. Court documents show that Congress Financial, based at a North Charles Street address, was formed in May.

Bidding opened at $1 million, with auctioneer Paul Cooper of Alex Cooper Auctioneers Inc. taking offers from the Congress Financial representative and from attorney Marty Schreiber, who spoke on his cell phone to a client interested in acquiring the property. Schreiber identified his client as Transamerican Trust, declining to give further details. They were the only two bidders.

Any owner must adhere to standards for rehabilitation of historic properties, including changes to the exterior or interior public spaces, such as the still-closed Marble Bar and lobby, said Ann B. Raines, a program administrator for the Maryland Historical Trust. The trust has an easement on the property that would subject any proposed changes to a review.

The hotel was built by philanthropist James Lawrence Kernan. He also constructed two theaters, the Maryland Theater on Franklin Street that hosted vaudeville, and the Auditorium theater on Howard Street. The hotel and theaters were interconnected. The complex had an art gallery, saloon, spa, billiard room and barber shop.

In the hotel's heyday, Al Jolson and the Marx Brothers entertained at the vaudeville house.

Two decades after Kernan's death, the Depression took its toll on the hotel and an insurance company foreclosed. The Auditorium was converted to the Mayfair Theater in 1940, and the Maryland Theater was torn down in 1951. The hotel deteriorated despite a new owner's efforts in the late 1930s to modernize it.

A Baltimore Sun article in December 1976 described the hotel as a "faded burlesque queen, filled with memories of a glittering, theatrical past and covered with embarrassing evidence of physical decay," with its 120 rooms mostly rented by transients.

Its owners at the time had hopes of reviving the hotel, along with some apartments, and bringing country-western music to the ballroom. Before the Marble Bar opened with live music, a local musician established a jazz club in the hotel's ballroom, one of the first places in the city where musicians could play original music.

The Congress Hotel Apartments helped usher in a wave of residential development on the west side. It opened shortly before the Atrium at Market Center, the 173-unit apartments in the converted Hecht Co. department store building at Howard and Lexington streets, and before the $60 million retail and residential Centerpoint complex at Howard, Eutaw, Fayette and Baltimore streets.

"The housing market on the west side remains strong, with all the major apartment buildings 100 percent occupied," said Ronald M. Kreitner, executive director of WestSide Renaissance Inc., a nonprofit organization that promotes the area. "The Congress is a bit of an anomaly."

When it opened as apartments, the Congress charged rents of $750 to $1,100. Struever invested $7.2 million to restore the building.

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