The death of one Inner Harbor apartment project may be the salvation for another.
Under a proposal approved in principle yesterday by the Baltimore Board of Estimates, a $1.485 million federal grant earmarked for the ill-fated Sons of Italy Center would be used by developers of the massive Inner Harbor East project.
The grant money originally was approved in 1986 by the U.S. Department of Housing and Urban Development for a 99-unit apartment complex to be developed by the Order of the Sons of Italy in Maryland on the southeast corner of President Street and Eastern Avenue.
But those plans were abandoned, and the grant money was never spent. On the verge of losing the money, the city found another developer that met the federal criteria for the grant -- Tuner Harbor View Associates Limited Partnership, a joint venture of Gilbane Properties of Providence, R.I., and John Paterakis, owner of H&S; Bakery Inc. and a longtime political ally of Gov. William Donald Schaefer.
Under the plan, the Urban Development Action Grant (UDAG) money would be used for the first phase of the partnership's planned 20-acre, $350 million Inner Harbor East community, two blocks south of the Sons of Italy site. The first phase of Inner Harbor East is a $9.2 million, 100-unit apartmentcomplex at Lancaster and Albemarle streets, overlooking the waterfront between the Inner Harbor and Fells Point.
A spokesman for the city Department of Housing and Community Development said the federal government has put restrictions on transferring UDAG money between projects. "We're not given great freedom as to what we can do with these funds," he said. "They've got to be used in the same general part of the city and for the same general purpose."
The city began work last year on its share of the project -- $20 million worth of public improvements for the waterfront community.
Public hearings on the use of the UDAG money for the Inner Harbor East development are scheduled for 5 p.m. today and tomorrow in the 13th-floor boardroom of the Charles Benton Building, 417 E. Fayette St.