Failed Black Olive Hotel Received Millions in State Subsidies
A Baltimore boutique hotel designed to be “a showplace for cutting edge ideas in green architecture,” scheduled to be sold at auction in June, received millions in state aid since 2005.
According to press reports and data from the Maryland Funding and Accountability website, Black Olive Development LLC, which owns the Inn at the Black Olive “Baltimore’s boutique organic hotel”, scheduled for a June auction, received $1.8 million in loans and grants from The Maryland Energy Administration, Department of Business and Economic Development, the and Department of Housing and Community Development between 2005-2011.
That number a $1 million loan guaranty on a $5 million loan from the Department of Business and Economic Development in 2006.
In 2008 and 2009 the Maryland Energy Administration awarded Black Olive LLC over $262,000 in low interest loans.
A 2011 Solar Energy Services Inc. blog post advocating legislation granting solar water heating systems eligibility state for solar renewable energy credits under Maryland’s Renewable Portfolio Standard (RPS), featured Black Olive Development LLC partner Dimitris Spiliadis and the solar water heating system he installed on the hotel’s rooftop.
The legislation granting solar water heating RPS credit eligibility passed, would have allowed Spiliadis to sell the credits generated by his solar heating system to utilities seeking to meet the state RPS mandate. Studies in several states have shown RPS programs increase utility rates and hamper economic growth.
However, there are no records of Black Olive LLC registering their solar water heating system as a qualified generator according to PJM-EIS the company, which oversees Maryland’s renewable energy credit trading market.
Spiliadis marketed the Inn at the Black Olive as a green hotel. In 2009, Spiliadis told the Baltimore Sun that he wanted his hotel to serve as a “model for environmentally sustainable buildings in the area.” “We don’t want to be an island of green we want to be a sea of green,” he told the Sun. The hotel website boaststhat it is a “beacon for sustainable, high performance, and green building practices in the world, LEEDs Platinum certification, giving our guests the piece of mind that comes with treating the Earth with respect.”
It appears Spiliadis’ business model of relying on taxpayer subsidies to get from government what was elusive to him in the market place turned out to be unsustainable.
First Mariner Bank foreclosed on Black Olive LLC’s $5.4 million loan in January, and Black Olive LLC’s partners filed for Chapter 7 bankruptcy, in an attempt to hold off the auction.
According to the Baltimore Business Journal Black Olive LLC owned by the Spiliadis family listed $0-$50,000 in assets and $1-$10 million in liabilities in it’s bankruptcy filings. The family also owns the adjacent Black Olive restaurant and Olive Grove Catering. A creditors meeting revealed interconnected revenue steams for each entity and that revenue from the catering company was diverted to mortgage payments for Black Olive LLC, which apparently had no income source.