An article in yesterday's Business section should have stated that Reisterstown Plaza Associates, a partnership affiliated with Continental Realty Corp., is the owner of Reisterstown Road Plaza and was the entity that filed for Chapter 11 bankruptcy protection earlier this week.
+ The Sun regrets the errors.
The owner of the Reisterstown Road Plaza has sought bankruptcy protection to stave off a $22 million foreclosure by the mall's lender.
Continental Realty Corp.'s action this week to reorganize its debt on the Northwest Baltimore shopping center follows on the heels of a foreclosure lawsuit filed by Aetna Casualty & Surety Co. The Connecticut-based insurer contends the Towson-based real estate company defaulted on its $24 million mortgage dating to 1988.
Continental owed $22.2 million on the Aetna loan as of Oct. 31, according to the foreclosure lawsuit filed in Baltimore Circuit Court. The debt is a nonrecourse loan, meaning Aetna is prohibited from collecting damages from assets other than the plaza.
As a result of Wednesday's Chapter 11 filing in U.S. Bankruptcy Court in Baltimore, Aetna's appointment of a receiver for the 708,000-square-foot retail-and-office complex at 6512 Reisterstown Road has been frozen.
"It's really in limbo at this point," said Louise Axelson, an Aetna spokeswoman. "We're waiting to see what happens to the Chapter 11 filing."
Aetna had been granted permission to name the Trammell Crow Co. as the receiver for the mall this week, after the insurer argued the nonrecourse nature of the loan jeopardized $500,000 in rental income it was owed as a condition of the default.
Neither Continental President John A. Luetkemeyer Jr. nor his attorney returned telephone calls for comment. A spokesman said the filing would "have no impact whatsoever on the daily operations at the shopping center."
"The filing follows the breakdown of discussions between the owner and the existing lender," said Stephen D. Kaiser, the Continental spokesman.
Continental defaulted last month, when it failed to make a scheduled $230,800 monthly loan payment and told Aetna it would miss a similar payment for December. Aetna contends the 120-store Reisterstown Road Plaza generates enough cash to meet its debt service.
Continental purchased the 32-year-old plaza in 1980 from Food Fair Properties Inc., and has since invested millions to upgrade and maintain the project, even as anchor tenants such as the Hecht Co. and Ames Department Stores Inc. have departed.
The 53-acre project is anchored by Caldor, Hechinger, Burlington Coat Factory, Young World and Food King.
"It's a well-located urban mall," said Patrick A. M. Miller, a retail specialist with commercial real estate firm KLNB Inc. "And Continental has done a good job of changing the tenant mix to fit the area's needs."
In 1991, Continental proposed adding 125,000 square feet of office space adjacent to the mall, but the $8 million plan collapsed with the local market.
Aetna had sought the receiver to collect the rents because it believes a foreclosure sale price would fail to cover the outstanding balance of the mortgage.
The lawsuit also noted that the project is in a "deteriorating condition," and that it contains potential environmental liabilities.
Continental says it will continue with renovations at the mall, including replacement of the roof, landscaping, painting and constructing a new main entrance. The work, estimated at $2 million, is scheduled to be completed in the spring.
Continental's real estate portfolio includes 2.7 million square feet of office, retail and industrial space, including the Belvedere Plaza, Carney Village Shopping Center and the Owings Mills Commerce Centre. Those projects will not be affected by the filing on behalf of Reisterstown Road Plaza.