Ernest Murphy was going with his entrepreneur's heart when he bought the storied Eager House restaurant building in 1992. But he turned to his economist's mind when he decided to put it on the auction block today.
Murphy's dream of resurrecting the former restaurant icon did not go as planned. Reviews were good, but the economy was not. The Eager House, which opened in 1947, was often more successful with its menu than with its bottom line. It had experienced several lives when it closed in the early 1980s. Reopened by Murphy in 1993, the Mount Vernon restaurant would struggle again. One reason, Murphy said, was that he had difficulty finding enough good workers.
"I'm in another business, and the restaurant was viewed upon initially as an investment," said Murphy, who had no restaurant experience when he reopened the Eager House. "I thought I would just go to dinner and spend the rest of the time going to the bank."
Murphy tried different menus and decors, but closed the restaurant in the late 1990s and tried to sell the building, on Eager Street, to recoup some of his estimated $1.3 million investment. Frustrated after a couple of attempts to sell to his renters, he turned to an auction as a sure-fire method to end his relationship with the building.
Real estate professionals say more and more property owners are choosing auctions to dispose of unwanted buildings, even if they are still producing income. At auction, a property sells fast because it sells "as is" to the highest bidder, said Ann F. von Forthuber, Murphy's auctioneer from Towson-based Auction & Estate Representatives. The number of bidders will not be known until today. They will come an hour before the 1 p.m. auction, post a $50,000 check and tour the property.
"They'll walk through the building, and then at 1 p.m. we'll drag everyone together and do it out here in front of the building, if the weather is decent," she said. "The building will go to the highest bidder. Settlement will be in 45 days."
Larry Theurer, president of the National Auctioneers Association, said all kinds of property owners are turning to auctions. He said the federal government and lenders foreclosing on properties have held "distress" auctions for at least two decades. But in recent years, property owners have other reasons such as eliminating the hassles of bargaining, fixing things and waiting for financing, even if it means they get less than they think they are due, Theurer said.
"One thing that's helped the auction industry is eBay," he said about the popular online auction site. "You can put things on eBay like trinkets and cars, but there's also real estate on it now."
The National Association of Realtors reports that $58.5 billion worth of real estate was sold at auction in 2002, up from $54.5 billion in 2001. The 2001 number represented about 6.5 percent of all commercial and residential real estate sold that year.
Murphy and his auctioneer would not estimate how much money they expect to bring in from the sale, although the building is assessed at $500,000, according to land records. Murphy paid $350,000 in 1992 but spent hundreds of thousands of dollars on renovations, he said.
Murphy, a University of Maryland economics professor turned consultant, said he will invest his proceeds in his next endeavor: a hotel in Bowie.
His current tenant, Paloma's, will close when the building sells. An attendant there said owners would seek a new location for the nightclub and live music venue.
Murphy said he hoped a local entrepreneur would buy the turn-of-the-century building in Midtown and renovate it, maybe even turn it back "into a place where people met their spouses and went for their birthdays." While it still has working fireplaces and some of the original molding and marble, it needs work. Some of the windows in the three-story structure are broken, and the auctioneer describes the structure as "rough."
The building is actually three buildings put together, 13-15 Eager St. and 917 Cathedral St. The property comes with an apartment on the third floor, some office space and a seven-day liquor license.
Murphy said he chose an auction because it would be easy. It would also be final - a bittersweet thought, he said.
"I fell in love with the building," he said. "I carried a flash light in there; I saw its potential. I hope someone else does."