A city-backed hotel near Johns Hopkins missed $21 million loan repayment
A lender is threatening to take control of a city-backed hotel that is part of an ambitious redevelopment of an East Baltimore neighborhood, court records show.
The owner of the 15-story Residence Inn Baltimore at the Johns Hopkins Medical Campus missed a July deadline to repay a $21 million loan. The lender is now asking a judge to put the entire complex — which includes several commercial and restaurant spaces — in the hands of another operator while its finances are sorted out.
Despite its name, the hotel is not owned by the Johns Hopkins University. However, it was originally developed as part of the East Baltimore Development Inc., or EBDI, which is supported by the university.
The EBDI was founded in 2003 and funded by a mix of private donations and taxpayer money to oversee the redevelopment of 88 acres of land near the medical campus of Johns Hopkins. Those redevelopment efforts have displaced and relocated more than 700 Black families from a neighborhood called Middle East, according to Marisela Gomez , an academic who wrote a book about urban renewal in East Baltimore.
After years of demolition, delays and revisions to the masterplan, much of Middle East has been rebuilt and is known today as Eager Park. That includes 800 N. Wolfe St., the site of the 194-room Residence Inn, which is a brand of extended-stay hotels by Marriott.
In 2015, EBDI sold what was then a vacant block to a team of developers for $10 . Their hotel project cost about $84 million to build and opened in October 2017, The Baltimore Business Journal reported .
The city then steered $1.4 million from the Baltimore Regional Neighborhood Initiative program to build out retail and restaurant spaces on its first and second floors, according to The Baltimore Brew .
A few years after the hotel opened, the hospital industry was decimated by the coronavirus pandemic. Like many hotel owners, the developers of the Residence Inn Baltimore received $1.4 million in pandemic-era loans from the federal government. Those loans have since been forgiven.
But there's an older, much larger loan that has not been repaid — and the bank is not forgiving this one.
In 2017, the developers, through a limited liability company called LSH GE Gateway, borrowed $21 million from a bank now owned by First National Bank of Pennsylvania. The LLC pledged the hotel block as collateral.
After multiple revisions to its repayment agreement, LSH GE Gateway 2 was supposed to repay the $21 million loan by July 31.
That deadline came and went.
Last month, a trustee appointed by the lender sued LSH GE Gateway 2, claiming that more than $18.4 million was still owed.
Court records give little insight into the finances of the hotel complex — and why it failed to pay back its loan.
One of the partners behind the deal was Greenebaum Enterprises, a Baltimore County-based real estate firm. Greenebaum Enterprises still lists the hotel property on its website and shares an address with LSH GE Gateway 2. The company's vice president of land development and construction, Mark Bennett Sr., said Greenebaum holds a "minority interest" in the project.
"Despite the current debt issues, the hotel and retail have been an excellent addition to the East Baltimore community," Bennett said in a statement.
Property records show that developer Ronald Lipscomb is the general manager of LSH GE Gateway 2. Attempts to reach him were unsuccessful.
Pyramid Global Hospitality, the Boston-based company that manages the hotel, did not respond to multiple requests for comment. An attorney hired by First National Bank of Pennsylvania to pursue the debt did not respond to a request for comment.
Cheryl Washington, the CEO and president of the EBDI, said in an email that she was not aware the property had defaulted on its loan and was at risk of foreclosure.
Baltimore's hotel market has almost recovered to pre-pandemic levels, data from the real estate analytics firm CoStar show. Guests have largely returned to the city's hotels, though the average occupancy rate still lags behind 2019. When adjusted for inflation, the revenue generated by the average Baltimore hotel room is lower today than it was five years ago.
Today, the Residence Inn Baltimore appears to be operating normally. The commercial spaces on its ground floor are mostly occupied. A large space for a restaurant on its second floor sits vacant.
