25 Struever properties at Clipper Mill face foreclosure 

Posted: 1:10 pm Mon, November 30, 2009
By Robbie Whelan
Daily Record Business Writer

After a rough year filled with lawsuits filed by contractors over unpaid bills, debt-choked Baltimore developer Struever Bros. Eccles & Rouse now faces the prospect of losing a large chunk of its celebrated Clipper Mill development to foreclosure after defaulting on about $5 million in mortgage debt.

Two separate foreclosure actions were filed in Baltimore circuit court on Nov. 6, and on Monday, Baltimore’s Alex Cooper Auctioneers Inc. published advertisements setting a Dec. 17 date for the foreclosure auctions of three large parcels within the development, a renovated historic industrial complex near the Jones Falls.

One of the filings deals with 24 properties that are part of the Overlook at Clipper Mill, a high-design luxury home project along the project’s western edge, abutting Druid Hill Park. Alex Cooper described the property on its Web site as “nine (9) spec homes in various states of completion, six (6) foundations and twelve (12) lots on 2.55 acres of land, more or less.” Court documents show that Struever owes $3.8 million to North Carolina-based bank BB&T on these properties.

The other foreclosure suit deals with the Tractor Building, a 42,000-square-foot warehouse space that sits on Clipper Park Road, which is being used for parking. After the developer’s plan to build apartments, offices and parking in the building failed to attract financing, Struever failed to pay back a $1.25 million bridge loan from BB&T on the property and an adjacent undeveloped parcel. An attorney for BB&T declined to comment for this article, citing concerns over pending litigation.

“We never expected [BB&T] to be the lender on the Tractor Building. It was just temporary lending, but in the meantime, the world changed,” said C. William “Bill” Struever, the development company’s president and CEO. “We weren’t able to get to a point where the lender was willing to release funds to continue building. We fully expect it will get done one way or another. It may just not be finished by us, which I’m sad about.”

Struever finalized a plan at the beginning of this year to put two levels of parking, 54 apartments and 20,000 square feet of office space in the Tractor Building, and to seek historic tax credits to help finance the project.

But several setbacks dogged the project. In February, news reports revealed that the developer owed more than $6 million to lenders and contractors on projects in Baltimore and Providence, R.I., debts that Bill Struever told The Daily Record were “embarrassing” and “deeply humbling.”

Since then, Struever has pulled equity out of several big-ticket development projects, including a proposed apartment site in Charles Village that the developer sold to Johns Hopkins University, and a $1.5 billion state-backed redevelopment effort at Baltimore’s State Center office complex. The company has also shifted to smaller roles in its partnerships with H&S Properties Development Corp., the developer of a massive mixed-use project at Harbor East.

Also this year, Maryland’s General Assembly failed to renew the state’s historic tax credit program, leaving just a little more than $7 million in tax credit financing for the year, with no guarantee that the credit will ever be renewed.

“A lot of projects would never have been done with the new rules the state has,” Struever said. “Clipper Mill just kind of got caught in between. Not having state historic credits was a big part of the reason. … It’s hard to do it without the incentives.”

Struever Bros. secured zoning permits for Clipper Mill in 2002, and quickly set about investing $60 million in bringing the vacant complex back to life. Once a large-scale machine shop with a metal lathe that measured 60 feet in diameter, the area thrived in the Industrial Revolution, reportedly casting the metal columns that support the dome of Washington’s Capitol building.

State land records show that Clipper For Sale LLC, a subsidiary of Struever Bros., obtained financing from BB&T for two large plots of in March 2006, but the amount of the loan was not immediately available.

Several mill buildings were quickly refurbished and leased to law firms, design companies, medical companies and even the headquarters of Urbanite magazine, whose launch was in part financed by Struever. Artists set up studio space there, and Woodberry Kitchen, an award-winning restaurant with a strikingly designed architectural space, is housed across from the Tractor Building.

But the $21 million Overlook homes, which were the city’s first LEED-Silver certified housing units, did not sell well. Of 38 planned units, only 11 have been built and sold, with prices ranging from $541,000 to $761,000.

“It’s simple: Struever has a P.R. problem,” said Cindy Conklin, the Realtor who acted as listing agent on the Overlook homes. “The project is viable. Anyone who buys there will live there happily, will do well financially. … But in a sense it’s tainted by Struever’s troubles. It’s not a well-kept secret that Bill Struever is a visionary and dedicated to the community and all that, but the company has had financial problems and has shrunk. It’s scary to buy real estate from a developer whose financial stability is uncertain.”