SENATOR RFP Pre-Proposal Conference: Groups Interested Gather for Meeting

Updated: Oct 6, 4:45pm – Attendees list

Yesterday, on the 70th anniversary of the opening of The Senator Theatre, the Baltimore Development Corporation (BDC) held their scheduled pre-proposal meeting for parties that had registered their interest in the Request For Proposal (RFP) process. One of these (or a conglomeration) may ultimately become the next owner or leaser (with Baltimore City as the landlord) of the historic 1939 theatre.

We are aware of at least a dozen groups that were represented.
Locals:

• AB Associates
• Belvedere Improvement Association (BIA)
• The Charles Theater
• Charm City Enrichment
• Conits Group, Inc.
• GWWO, Inc.
• Herndon Contracting, Inc
• James Posey Associates
• The Music Workshop
• Noch – Noch, Productions
• Personal Electric, LLC
• Rita St Clair Associates, Inc.
• SCT (Senator Community Trust)
• SRI (Site Resources, Inc)
• UCAM (United Community Access Media)
• Urban Information Associates
• WEI (Worcester Eisenbrandt, Inc.)
• WTMD 89.7FM (Towson University)
• Ziger / Snead LLP

Out of state groups:

• John Milner Associates (PA & VA)
• Majestic Star Entertainment (NJ)

It should be noted that absence of a group from yesterday’s meeting does not preclude them from submitting a proposal. The occasion created a forum in which the BDC could deliver a briefing and allow groups to pose questions about the process and tour the theatre.

Said questions we were told were being recorded and would be disseminated, with answers, on the BDC website by October 13, 2009. We’ll include a link here when the page becomes available.

We’d like to take the opportunity to thank:

• Maryland State Senator Joan Carter Conway for attending and posing some important questions regarding timing and community involvement when proposals are to be evaluated.
• Eddie Leon of the Commission for Historical & Architectural Preservation (CHAP) for clarifying the situation regarding interior designation proposal approved by the CHAP commission back in May. Said proposals still have to gain approval during public meetings of the Baltimore City Planning Commission and then City Council before coming into effect. Mr. Leon stated that this could perhaps be completed by spring 2010.
• Kristen Mitchell and Kim Clarke of the BDC for taking the time to present this opportunity, answer questions and for the refreshments.
• Tom Kiefaber for providing access to this great facility for the event & to his family’s 70 years of unbroken presentation excellence.
• Gayle Grove for the Senator Theatre 70th anniversary cake (sorry the camera phone didn’t do it justice).

BDC practices attract some scrutiny

For those who aren’t familiar, the Baltimore Development Corporation (also known as the BDC), has been given the job by Baltimore City government to handle the Request For Proposals (RFP) process in the case of The Senator Theatre.
That is, once the city’s winning bid – from their own foreclosure auction – has been ratified. This is expected to happen this coming Friday, September 18, 2009 (barring any objections filed over the auction’s validity).

Apparently, BDC actions (recent and past) have some folks questioning their operations.

• Baltimore’s Shadow Government- The Baltimore Development Corporation – Examiner.com
  Citizens respond in the Comments section below the article (start from the bottom & read upwards).
  

  Proposed Slots Parlor Site

• City OKs Gateway land for slots parlor – Baltimore sun
  

“Had we known the City planned to make this land available to any bidder, this would clearly and dramatically affect our appraisal of the location, as it would have for other potential bidders.” [John Cordish of Cordish Co.]

When the city awards land to a private developer it usually goes through a competitive bid process. Frank, the deputy mayor, acknowledged that this deal was “unusual.”

The deal included a payout of at least $3 million from BCEG to Cormony as an incentive for the development firm to bow out of its project [a $250 million “sportsplex”], according to a person familiar with the negotiations.

• City Gave No-Bid Contract For Slots Site Work – WJZ TV
  Instead of advertising the work, the [BDC] approached a handful of companies and asked them to provide prices to knock down the Maryland Chemical Building on Russell Street…
  [To] pave the way for a proposed $212 million casino near M&T Bank Stadium.

• City awarded demolition contract at proposed slots site without public bidding – Baltimore Sun
  City Comptroller Joan M. Pratt, who sits on the five-member Board of Estimates panel that approves city contracts, says she believes… “An open process allows for more competitiveness and allows for the City of Baltimore to get better service at the best price.”

  Arnold Jolivet, the managing director of the Maryland Minority Contractors Association, criticized the process – even though the… demolition was awarded to an African-American owned firm that he called “well qualified.”
  

• BDC cancels demolition contract – Baltimore Sun
  [M. J. “Jay”]Brodie said he consulted with some of his BDC colleagues who believed that the quasi-governmental agency had the authority to go outside the regular city bidding process with demolition contracts, as it does for other types of contracts. “I didn’t question that,” he said. “I don’t know to what degree they checked.”

  Baltimore Mayor Sheila Dixon announced Tuesday that BDC would no longer award demolition contracts.

Those concerned for the future well-being of The Senator Theatre may well consider these reasons to pay extra attention to the BDC’s handling of theatre’s situation.

SENATOR Theatre Auction: Unnecessary Sideshow Atmosphere?

For your consideration – It is our understanding that:

1. The Auctioneer requested (well ahead of time) that owner, Tom Kiefaber allow the auction to take place inside the theatre.
   They expected a large turnout (knowing it would draw many individuals that would not bid, but would want to witness the event) and having an air-conditioned 900 seat auditorium on hand seemed to be a good solution.
2. The owner agreed.
3. The owner contacted City officials (well ahead of time), who also agreed.
4. Many people did indeed arrive at the theatre, came inside and were milling around.
5. 

   Auction crowd spills onto York Rd. (Baltimore Sun photo by Amy Davis / July 22, 2009)

   Minutes before the auction was to begin, a city official informed the auctioneer that the venue was to be moved outside, onto the sidewalk in front of the theatre.

   

   Police called to handle potential safety hazard (Photo by Brendan Cavanaugh)

6. Given the large number of people, the crowd spilled into the street causing a potential traffic/safety hazard, so city police apparently had to be called in to perform crowd control.
7. Owner Tom Kiefaber tried to get everyone to calm down and come back into the theatre for the auction to take place, but to no avail.
8. While some shouted they could not hear the auctioneer and were told to move closer,  auctioneer staff were heard telling media camera crews to take a steps back.
   With such a large and now packed collection of bodies/cameras this was not what you’d call an optimal situation.
9. We could find no one who could or would give a reasonable answer as to why this last minute change and the resulting confusion, disgust and raucous outcry (from some in the crowd) was at all necessary. At the very least it was a distraction. Some present said it was another chance for city officials to publicly disgrace the owner.

Bottom Line:
All the city officials had to do was let the auction take place, as planned, inside the theatre.
All this could have been avoided.

Also consider:

• None of the aforementioned parties interested in the auction actually bid (“Buzz” Cusack, Loyola College, etc.), but many are now interested in the expected RFP process.
• These interesting points from Baltimore Sun:
  • A staff member of the auction house, acting on behalf of an anonymous bidder, offered $800,000.
    The proceedings paused briefly while representatives from the city’s law department and the Baltimore Development Corp. huddled and then, when the auction resumed, counter-offered $810,000. Nobody bid higher.
  • Comptroller Joan M. Pratt was also disappointed by the result, but for different reasons. She warned that the city should have “cut its losses” and sold the theater for $800,000 to the sole bidder.
    “They should have let them have it,” Pratt said. “We know that the city does not have funds to operate, maintain and retrofit a movie theater. The city of Baltimore should not be in the business of owning movie theaters.”
  • The city’s already lean budget is expected to take another hit, with Dixon asking all of her agency heads to identify 5 percent cuts from their spending plans. Kimberly Clark, an executive vice president at the Baltimore Development Corp., said that the city will likely have to spend more money to make capital improvements to fix the theater, though she will not know how much more until the city can properly assess the building.

Links:

• What REALLY happened at Baltimore City’s Auction of The Senator Theatre by Astrogirl
• Baltimore Messenger: Historic Senator Theatre sold at auction to Baltimore City by Larry Perl
• The Towerlight: City keeps Senator Theatre in auction by Tyler Waldman
• Baltimore Sun: City takes over ownership of Senator by Chris Kaltenbach & Annie Linskey
• Sragow: Here’s hoping a cultural crusade will preserve The Senator by Michael Sragow

Bill Henry explains city plan to buy The Senator Theatre

Baltimore City District 4 Councilman Bill Henry explains the city’s plan, below. Questions I posed  are marked in blue with the councilman’s responses are italicized.

It should be noted that Astrogirl also had questions for the councilman, but I won’t post those without permission. Besides she is likely to want to do that herself. 🙂

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Dear 4th District community leaders and stakeholders:

I just wanted to make sure everyone was up-to-speed on what exactly is happening with the Senator Theater.

The Mayor announced this past weekend that the City would purchase the note from First Mariner and ask them to cancel the auction scheduled for April 20th – http://www.baltimoresun.com/business/bal-md.senator12apr12,0,3729845….

Monday, on the advice of the City’s Law Department, CHAP postponed their hearing on placing the interior of the Senator Theater on the landmark list until after they finish approving their interior guidelines policy.  A vote on both is now expected at their next meeting – Tuesday, May 12th, 1:30pm.

Yesterday, First Mariner agreed to cancel their auction –
http://www.baltimoresun.com/business/bal-bz.senator15apr15,0,7919565….

If the bank auction had proceeded, the bank would probably have been happy with any bid at or above $350,000, because they would have also been able to force the City to pay up to $600,000 (the City’s guarantee) to make up the difference.  Plus, the bank also has liens on the house Tom owns on Orkney (next to the old diner lot) and a lien on his home in Sparks – in theory, they could have auctioned off ALL THREE and as long as they got $350,000 TOTAL, they would have been satisfied – which put all of us in the position of worrying that any speculator could have plopped down a couple hundred thousand bucks and then let the Senator sit vacant for a few years until the economy improved before they did something with it.

The expectation now is that the City, after purchasing the note, will hold its own foreclosure auction.  Unlike the bank auction though, any bidder will have to be willing pay whatever they bid at the City’s auction PLUS the $950,000 of the First Mariner note. We expect no other bidders because anyone who would be willing to do that could have done so already at any time.

This does not in any way preclude anyone from coming forward to bid against the city, correct?
If that were to happen, however unlikely, is the city willing to counter the bids? If so, how high?

What will happen at the City’s foreclosure hearing is that only someone willing to spend $950K or more for the Senator will bid – which will, in all likelihood, only be the City.  The City would probably not try to outbid such an offer, but realistically speaking, anyone who could make it could have come forward at any time in the last several months and done this for less – the payoff on the loan was under $920K just a few weeks ago, before First Mariner accelerated the foreclosure and started adding on legal fees and additional penalties.

The reason that some kind of foreclosure auction MUST happen is that there are hundreds of thousands of dollars of other debt tied to the property that can only be wiped out by foreclosure – until they are wiped out, NO ONE will be able to operate the Theater profitably.

This brings up another point. I’ve not seen/heard how the city’s plan will deal with the amount owed to the state. To truly clean the slate doesn’t that have to be handled?
http://www.mddailyrecord.com/article.cfm?id=11270&type=UTTM

That’s why we have to have our own foreclosure auction – that foreclosure will wipe out the $600K + owed to the state and another $100K + in third-position judgments against the Theater.

And, isn’t Tom’s home also held as collateral within the state loan? So, until the state debt is worked out, even if the city releases the home, the state still has claim to it?

Yes, this is still an issue, but it’s not part of the City’s offer because the City can’t make the State release their lien.  What we can do – and is part of the City’s offer – is say that we will release our lien, in the hopes that the State will follow suit.  State Senator Conway was quoted in one of the news stories as saying that she was trying to convince the State’s Department of Housing and Community Development to agree to release the lien.  I spoke with Delegate Maggie Macintosh on Monday and I believe she was trying to help as well.

Once the City owns the Theater, it will put out a request for proposals to own and/or run the Theater as an entertainment venue; specifics on the RFP process will be announced as they’re developed.

Feel free to check in with me at my work address if you’re interested; if I know something new, I’ll be happy to share.

Thanks!

– Bill
Bill.Henry@baltimorecity.gov

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So, from where I’m sitting, it looks like the plan still seems to hinge on:

• Board of Estimates approval to pay the 1st Mariner mortgage
• State of Maryland’s debt being erased (in this scenario by the city’s own foreclosure auction)
• The City not being outbid at their own foreclosure auction.
  As unlikely as it sounds, it remains a possibility

I would suspect that if  this plan does not continue to proceed, we could expect to see 1st Mariner’s auction reinstated.

I would, therefore, like to suggest that supporters contact state officials including those mentioned by Councilman Henry (State Senator Joan Carter Conway & Delegate Maggie MacIntosh) and encourage them to ensure that the plan proceeds, but moreover, to emphasize that the community should have a voice (individually or via the SCT) when it comes time for the city to resell or leasing The Senator Theatre.

-T. Harris