Kimpton Hotel near deal to buy Baltimore's Hotel Monaco site

The owners of the historic B&O Building in downtown Baltimore have reached a tentative deal to sell part of the structure to its marque tenant, Hotel Monaco, to pay off a portion of the debt they took on to buy and renovate the building.
Fri, 12/03/2010

Baltimore & Charles Associates LLC, which filed for Chapter 11 bankruptcy protection in July, has asked the U.S. Bankruptcy Court in Baltimore to sell the hotel portion of 2 N. Charles St. to the Hotel Monaco's parent company, the Kimpton Hotel & Restaurant Group.

According to court documents filed Nov. 23, Baltimore & Charles would also sell the rest of the building, which includes the B&O American Brasserie and office space, to another undisclosed buyer. The sale terms were not disclosed. The building is assessed at $36.8 million, according to the Maryland Department of Assessments and Taxation.

Baltimore & Charles would use the money it makes from the deal to pay at least a portion of the nearly $50 million in debts it owes to various companies that worked on or helped pay for the project. The largest of them is Capmark Bank of Utah, which lent Baltimore & Charles about $48 million in 2007 to finance the work.

Baltimore & Charles has defaulted on that loan and is not able to keep up with its interest payments, the building owner said in court documents. In addition, it owes more on the project than the building is worth, part of the reason Baltimore & Charles proposed the settlement deal.

Baltimore & Charles attorney Lawrence Yumkas, of Annapolis firm Yumkas, Vidmar, Sweeney & Mulrenin, LLC, said he believes the proposal is the best possible alternative in the case. The deal means that Capmark will not seek to foreclose on the building, a scenario that would not have enabled the building owner to pay down its debts.

Capmark asked the bankruptcy court in October for permission to foreclose on the property. In addition, according to court documents, Capmark has reached a tentative deal to sell the debt to Kimpton. The court has scheduled a Dec. 10 hearing to consider the settlement. Representatives from the bank could not be reached for comment.

Baltimore & Charles spent about $60 million to convert the former Baltimore & Ohio Railroad headquarters building into a 208-room hotel, the Hotel Monaco, which opened in 2009. As part of the proposed settlement, Kimpton would also take on $400,000 in unpaid claims by contractors involved in the project and would give another $992,000 to Baltimore & Charles to reimburse other creditors owed money as part of the renovation.

Daniel J. Sernovitz
Baltimore Business Journal