A Baltimore County-based developer on Tuesday effectively gained control of one of the last major undeveloped parcels near Baltimore's Inner Harbor when an affiliate of Questar Properties of Pikesville submitted the high bid for the former McCormick & Co. spice plant property in a foreclosure auction.
The Light Street parcel was acquired for $11.5 million by 414 Light Street Associates LLC, an affiliate of Questar Properties and the primary note holder on the property.
About three dozen people gathered at the property for the auction, handled by GoIndustry DoveBid of Owings Mills. Bidding started shortly after 1 p.m. at $8 million and stopped several minutes later at $11.5 million.
Stephen Gorn, a representative of 414 Light Street Associates, submitted the high bid. He said after the auction that his group would evaluate its development options and that the 1.9-acre parcel would meanwhile continue to be used as a surface parking lot. Before the sale is final, it must be ratified by the Circuit Court for Baltimore City, a process that could take 45 days or more.
The land at one time was designated for what would have been Baltimore's tallest building — a 59-story skyscraper to be called 10 Inner Harbor, with condominiums, a hotel, shops and parking — but the development never materialized. The developer was an affiliate of Philadelphia-based ARC Wheeler Equities, which later defaulted on a loan from Susquehanna Bank, triggering the foreclosure proceedings. One of its principals, Hal Wheeler, died last year.
Tuesday's auction involving the Light Street parcel was the second to be scheduled in two months. A Nov. 4 auction was canceled after the ARC Wheeler affiliate sought bankruptcy protection. The auction was rescheduled because the bankruptcy case was dismissed, according to Bryan Goodman, senior project manager for GoIndustry DoveBid.
The November auction was to be a foreclosure sale on behalf of Susquehanna Bank, which claimed in court documents that it was owed $24.5 million by the ARC Wheeler affiliate as of September 2010. Susquehanna sold its note last fall to 414 Light Street Associates, for whose benefit Tuesday's auction was held.
Before the auction, the ARC Wheeler affiliate was indebted to 414 Light Street Associates for about $24.3 million, plus an additional $12 million in unsecured debt, court documents show. As of July 1, the site had an assessed value of $16.3 million, or about $8.5 million per acre.
The value of the Light Street property potentially rose last fall, when the Greater Baltimore Committee disclosed that it was studying a plan to build an 18,500-seat arena and a convention center expansion less than a block from the McCormick site. The cost of that project has been estimated at between $750 million and $930 million.