The developers said they closed on the purchase of the property and finalized funding for the $155 million project yesterday afternoon. The development's 165 units are expected to sell at prices from $600,000 to $3 million.
The project, viewed as a potential landmark contribution to Baltimore's redevelopment, has been dogged for years by legal and financial disputes.
"It will represent the very best of what Baltimore has to offer," predicted Mayor Martin O'Malley in a statement.
"I am very proud to say we were able to pull it off. It is going to be absolutely spectacular," said Edward V. Giannasca II, president and chief executive of Baltimore-based Giannasca Development Group LLC, one of three partners on the project.
Also participating are New York-based Midtown Equities LLC and Samuel & Co. of Miami.
The developers recently modified their plans for the project, replacing hotel rooms with additional luxury condominiums after potential buyers said they didn't want hotel traffic on their property. The condominiums will be managed by Ritz-Carlton Hotel Co.
"The idea of having the public traipsing through was eliminated," said Daniel Pfeffer, president of Midtown.
He said the changes have given the developers additional room to install "ultra-high-end amenities that the city of Baltimore has never seen before."
Planned features include a five-star restaurant, which will be managed independently, a 15,000-square-foot spa, a marina, gourmet food market, cafe, billiards room, meeting rooms and a private luxury movie theater.
A planned ballroom for hotel guests has been eliminated to make room for the spa and a pool, which will be enclosed in glass, climate-controlled and overlook the Inner Harbor.
Giannasca said neighbors should be happy because condo owners won't be as noisy as hotel guests.
"We are certain that the neighborhood is going to be thrilled that the project is less invasive," Giannasca said.
But not everyone was happy with the project's changes.
"I am saddened there will not be a hotel," said Rebecca Hoffberger, director and founder of the American Visionary Art Museum, and neighbor to the Ritz-Carlton. Hoffberger, who said she supported Giannasca's efforts, had hoped the museum would become a destination for hotel guests.
The loss of the hotel also means fewer people will have access to the site's historic water view, which will be limited to the condos' owners, she said.
The project consists of four six-story buildings connected by three smaller buildings.
Unlike other large developments in the city, the Ritz-Carlton is being privately funded with HSBC Bank USA bankrolling the project.
The project is expected to generate $9 million annually for the city and state and employ 1,500 people during the construction phase. The developers said they did not know how many people would be employed once the complex is up and running.
Andrew Frank, executive vice president of the Baltimore Development Corp., said the "financial impact to the city is enormous" even without the hotel. "It's 100 percent privately financed."
The developers said the area's growing affluence was another reason they decided to focus on luxury condos. Exclusive condominiums would not only entice people who live in Baltimore, but commuters from Georgetown and Washington, they said.
"This city is in an uptick," Pfeffer said. "I think the outlook for Baltimore is extremely positive. We come into these markets all the time. Without a doubt there is a bright future for Baltimore; otherwise we wouldn't be investing $155 million."
Pfeffer expects little problem filling the condos with residents. "We know we are not going to have enough supply to fill demand," he said. He predicted the project would be complete within 24 months.
The Ritz-Carlton project has been planned for about five years and has seen financial backers and partners come and go.
The development was originally envisioned in 1999 by land speculator Stuart C. "Neil" Fisher. But Fisher withdrew in January 2000 after news surfaced that he had no apparent assets, that he was refusing to pay a fraud judgment and that some of his past developments had ended in lawsuits and bankruptcies.
Fisher handed the project off to New York-based L.I. Square Corp., which hired Giannasca as its local president. L.I. Square backed out, and Giannasca stayed on to head the project.
Neither Pfeffer nor Giannasca would discuss Fisher.
Since then, Giannasca has faced numerous problems, including complaints from neighbors about the Ritz's size and design. Several people affiliated with the project have had unrelated legal entanglements.
Last month, however, a legal dispute that delayed progress on the project was settled. The lawsuit alleged that owners of the HarborView residential complex, which has 75 percent ownership, reneged on a promise to sell their interest in the property for $5.4 million and had sought $16.5 million instead.
"People are probably tired of hearing about" the Ritz-Carlton project, Pfeffer said. "From our standpoint it is new, it is exciting."
Demolition of a former Bethlehem Steel storage building on the 5.6 acre site off Key Highway is expected to begin within the next several weeks.
Sun staff writer Eileen Ambrose contributed to this article.