August 19, 2009 - The corporation that just opened the $65 million, 202-room Hotel Monaco inside Baltimore's historic B&O Building is in danger of losing the property at a public auction next month for not paying a Millersville lumber supplier $184,000 for doors, wood trim and other materials used in the project.

A Baltimore circuit judge issued a final order this month establishing a mechanic's lien and directing the sale to move forward on the premises unless the building owner pays the J.F. Johnson Lumber Co. $184,000 plus interest and attorneys' fees by Aug. 31.

Johnson had sued Baltimore and Charles Associates LLC, owner of the building at 2 N. Charles St., and general contractor James M. Jost & Co. of Columbia, claiming it is owed more than $230,000 for lumber products used in the construction.

The order, by Judge Evelyn Omega Cannon, clears the way for an auction to be held to satisfy the complaint, according to Johnson's attorney, Michael Darrow of Hillman, Brown & Darrow P.A. of Annapolis. Darrow, who specializes in mechanic's liens, said he is prepared to proceed with an auction by mid-September.

Robert Ferguson of Ferguson, Schetelich and Ballew P.A. in Baltimore, the attorney for Baltimore and Charles Associates, said his clients intend to appeal the judge's decision and post a bond. Such an action would result in cancellation of the auction.

Ferguson said he has not filed an appeal of Cannon's decision, but he has 30 days from the date of her Aug. 5 ruling to do so. "We disagree with the judge's ruling and we're going to take that up with the appellate court," Ferguson said.

If an appeal is filed and the auction is canceled, the case would be heard in Maryland's Court of Special Appeals. In the meantime, the Hotel Monaco Baltimore remains open for business. The 13-story building also has a two-level restaurant called the B&O American Brasserie and several floors of office space that remain open.

The judge's decision came less than a week after the hotel's opening July 30. Kimpton Hotels & Restaurants of San Francisco is managing the hotel. ARC Wheeler, a Philadelphia-based developer, has controlling interest in Baltimore and Charles Associates, the entity listed in state land records as the property's owner. The building opened in 1906 as headquarters for the Baltimore & Ohio Railroad.

The Hotel Monaco Baltimore is the most expensive of half a dozen hotels opening in Baltimore this year. Its completion resulted in the creation of 135 to 140 jobs. Todd Unger, director of sales and marketing, said neither the hotel nor Kimpton are parties to Johnson's suit. He said the hotel has had a strong first month and the suit has not adversely affected business.

John Voneiff, a partner with ARC Wheeler, said the case "doesn't really have an effect" on the building's operation. He said the case involves a dispute over the price of materials and that he expects the owners to prevail in the Court of Special Appeals.

Darrow, Johnson's attorney, said the lumber company was founded in 1921 and has worked for a wide range of prestigious commercial and residential clients. "Johnson Lumber has been around for 88 years," he said. "They have work in the U.S. Capitol. They don't rip people off."

The lumber company's president, Robert W. Johnson, said his firm has had a difficult year as a result of the recession and Baltimore and Charles Associates was one of its biggest accounts in 2009.

A representative for a painting subcontractor, NLP Enterprises of Owings Mills, said he calculates his firm is owed $235,000 for work it completed at the Hotel Monaco. Mark McDaniel, NLP's vice president, said his company so far has refrained from taking legal action because it has always had a good working relationship with the general contractor, Jost, and found it to be a highly reputable company At the same time, he said, his company hasn't received any payment since July 14.

"We did a good job" on the hotel, he said. "We want to get paid. It's just frustrating."

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