Wells Fargo Bank on Tuesday filed a lawsuit against a subsidiary of Baltimore developer Struever Bros. Eccles & Rouse over an unpaid line of credit apparently used to finance failed development projects in Rhode Island.
According to the complaint filed in U.S. District Court in Baltimore, SBER Development Holdings LLC took out a $2.4 million line of credit in 2007. The original loan was through Wachovia Bank, which was later absorbed by Wells Fargo. Struever Bros. exercised the full amount on the line of credit on March 6, 2009.
Struever Bros. set aside $1.93 million in cash collateral for the bank as part of the agreement, which the bank has applied to the debt. The bank claims that no other payments were received, the loan is in default and Struever Bros. still owes $466,194.
C. William “Bill” Struever said in a brief phone interview Wednesday that he was not aware of the lawsuit, but that it was likely related to work his company did in Rhode Island.
“We’re working hard to get everything taken care of, and we’re making good progress,” Struever said.
Struever Bros. has cut ties with multiple development deals in Rhode Island, including giving up its ownership stake in the $230 million American Locomotive Works project in 2009. This January, Pennsylvania-based Capmark Financial Group foreclosed on the historic property.
Struever Bros. has also exited the Paragon Mills project in the city, a mixed-used redevelopment project that was put up for auction and is the subject of multiple liens in Rhode Island Superior Court.
While the court filings in Baltimore don’t specify which projects were involved, they say the money from the line of credit was earmarked to Capmark Bank’s Capmark Finance Inc., U.S. Bancorp Community Development Corp. and a subsidiary of Consortium America, Consortium America XIV LLC, a nationally certified “Community Development Entity” in Washington that is controlled and managed by the Trammell Crow Co.
Struever Bros., which developed Clipper Mill, Belvedere Square and Tide Point in Baltimore, among others, has been hit with several lawsuits and mechanics liens across the country over the last few years related to stalled or abandoned projects, including a minor league baseball field for the Nashville Sounds and redevelopment efforts in the American Tobacco Campus in downtown Durham, N.C.