Baltimore developer Struever Bros. Eccles & Rouse, known for decades of urban revitalization projects throughout the city and elsewhere, faces more than $5.5 million in loan defaults, court records show.
National City Bank is seeking $5.3 million for a commercial loan made to Struever Bros. in 2007, including $5 million in unpaid principal, plus interest, according to a lawsuit in Baltimore Circuit Court.
The developer also has defaulted on a $5.5 million revolving loan that Fannie Mae approved in 2004 through its American Communities Fund and owes more than $557,000, according to a lawsuit filed in Baltimore Circuit Court. In the lawsuit, Fannie Mae said it had extended or modified the loan due date twice since December 2007, and the developer stopped making payments in September.
And Struever faces lawsuits from contractors in Rhode Island and Durham, N.C., according to lawyers and news accounts in those states. Those lawsuits seek more than $2.7 million, according to the published reports.
In a statement e-mailed yesterday, the company's chief executive and president, C. William "Bill" Struever, blamed the financial troubles, in part, on the slumping economy. But Struever declined to address reasons for missed payments on the loans or to contractors. And he did not provide details about the company's options.
The developer, which began renovating Baltimore rowhouses 35 years ago and found a niche in transforming old industrial buildings into mixed-use commercial or residential projects, has survived ups and downs of the capital markets over the years, Struever said. The company has projects in nine other cities.
"I am very confident that we will come through the heartaches of today's economic downturn as well," he said in the statement.
Developers and construction firms have been especially hard hit by the credit crunch, making financing difficult to obtain and forcing many companies to halt or revise projects and lay off workers.
In December, Struever Bros. put one of its trophy properties and headquarters building, the Tide Point waterfront office park in Locust Point, on the market for $102 million in hopes of generating much-needed cash. The developer is seeking a joint venture partner or outright sale of the former Procter & Gamble factory, which Struever redeveloped between 1999 and 2001 and is now 100 percent leased to sports apparel maker Under Armour and 14 other tenants.
Fred Solomon, a spokesman for PNC Financial Services Group Inc., which acquired National City Bank in December, declined to comment on the National City lawsuit, which was first reported last week by the Baltimore Business Journal.
A Fannie Mae spokesman also declined to comment.
Fannie Mae's American Community Fund worked with builders and developers to invest debt and equity in communities to advance development plans. Projects approved for financing under Struever's loan, according to court records, included Clipper Mill, a former machine manufacturing plant in Hampden redeveloped into offices, studios and housing, and unspecified projects in Charles Village, where Struever has developed Charles Commons student housing and Village Lofts condominiums.
Struever Bros. also owes money to contractors who are working on several projects to convert old mills in Providence, R.I., and nearby towns into residential, commercial and retail space, according to an attorney representing clients who have filed liens against the company.
Joseph J. Reale Jr., a Providence-based attorney, said he represents seven clients in trades such as painting, flooring, cabinetry and plumbing, who are owed more than $1 million for mill renovation projects in which Struever Bros. is the general contractor. Most of the work was completed last year, and some clients have not been paid since last summer, he said.
Despite the economic downturn, "it's not typical," he said. "It's not typical that a project is ... leased out and sold [and] would not pay subcontractors for work. Typically, most projects have financing and money in place before the project starts."
The Providence Journal reported in December that more than two dozen companies filed mechanic's liens against Struever Bros. and affiliated companies during the past year. The newspaper said local contractors are owed $1.5 million for work completed on Struever projects.
And Struever faced $1.2 million in liens and unpaid contractor bills last summer in North Carolina, according to lawsuits reported in The Herald- Sun in Durham.
In Baltimore, Struever Bros. faces a lawsuit dealing with work done several years ago in Fells Point. The company is named in a negligence lawsuit filed Jan. 22 by city officials, seeking damages and restitution for a partly collapsed waterfront bulkhead and pedestrian promenade in the 1400 block of Thames Street. In the lawsuit, the city says that Struever Bros. had agreed in 2001 to provide the engineering design for the promenade as part of its development of property near its Fells Landing project.
The lawsuit says the completed promenade began to settle into the mud in 2004, then further deteriorated to the point where it could cause serious injury or collapse altogether. The city is seeking $3 million in compensatory damages.
In his statement yesterday, Struever said he is optimistic about the company's future.
"We have a plan and are in close contact with our key stakeholders with a goal of reaching positive resolution," he said. "We are fortunate to have great partners who believe in our company, our projects and our mission" of revitalizing blighted urban neighborhoods.