Shadowed by fraud allegations, Harborview Marina went from Inner Harbor gem to eyesore

The sailors are gone, and so are their boats. Beyond the locked gate, the pier’s mostly empty.

The finger docks branch out into the Inner Harbor with only a few birds atop the pilings.

Harborview Marina was once an inviting gem of the South Baltimore waterfront, a place to stroll and sit for drinks on the water. Now it’s a skeleton of itself.

“It’s an eyesore. The docks are falling apart. There are no boats,” said Steve Schenkel, a neighbor, taking in the gloomy view from DiPasquale’s Italian Market last week.

The 278-slip marina ordered all the boats out and closed abruptly a year and a half ago, citing the unstable condition of the concrete pier. Since then, the pier has seen no activity and has become shabbier by the day.

“When I walk by, it kind of makes me sad,” Karen McGee said on a walk with her dog, Jasper. “It’s people putting money above community.”

Two rich men owned the marina — a doctor and a builder — and their yearslong feud looms over its derelict state today. In court papers, the late Richard Swirnow, the builder and minority owner, accused his partner of deliberately neglecting maintenance on the pier and missing the mortgage payments as part of a scheme to depress the value and grab control.

The property went into foreclosure, and the doctor, Selvin Passen, bought it at auction last year. His was the only bid. Swirnow immediately filed a legal challenge.

Now Maryland’s appeals court is left to sort out the mess. The judges could stamp their approval on the auction, and Harborview would belong to Passen. Or they could throw out the sale and send the fight back to the lower court. Swirnow had accused Passen of fraud, and the lower court could hear evidence on those allegations.

The appeals court may take several months to issue its opinion.

“This was an intentional, knowing, rather sophisticated, minority-oppression squeeze-out,” Swirnow’s attorney, Ramsay Whitworth, told appellate judges during a hearing Friday in Annapolis. “The design of which was to use the court as the final instrument of this fraud.”

An ownership company led by Passen defaulted on the marina debt to trigger the auction. His attorney, Bob Van Galoubandi, argued that the court is limited to a narrow view of the right to foreclose. That right, he said, simply depends on whether the bank debt was valid.

“The real problem here is they don’t like who is foreclosing,” Galoubandi told the judges. If it was the bank, he said, “there would be no case. They’re upset because they have a longstanding dispute with their partner.”

Indeed, the two Baltimore business titans had been locked in a power struggle over the marina for years.

Swirnow was the visionary builder who transformed the shuttered Bethlehem Steel shipyard off Key Highway into the glittering Harborview development with a high-rise condominium tower, marina and floating pier homes, some of the city’s most exclusive real estate. He died in October at 91.

Passen co-founded a lucrative chain of medical testing labs in the late 1960s then embarked on a second career as a waterfront developer and marina owner. By the late 1990s, he was buying up parcels of the 60-acre Fort Lauderdale Marine Center, the largest yacht repair yard and marina in the U.S.

They teamed up in 2009 to form a new company to own and operate Harborview Marina. Court documents describe an entity for Passen as holding a 60% interest in the Harborview Marina company. A Swirnow entity held a 40% interest. The corporate structure required both sides to approve any sale. That requirement would frustrate Passen years later when he decided to sell off his empire. Swirnow wouldn’t budge.

Court records lay out details of the dispute: dueling lawsuits, allegations of fraud, bullying and bad-faith negotiations. Passen’s attorneys accused Swirnow of being unreasonable and blocking the sale of the marina over old grievances.

More recently, Passen and his partners bought the mortgages on the marina from Orrstown Bank and missed the monthly payments, pushing the marina to a foreclosure auction. In court records, Swirnow alleged that this was a deliberate scheme to wrest control.

He sued and asked the court to reverse the sale or hold a hearing to consider whether Passen violated his financial responsibilities to their partnership. David Swirnow has continued the case after his father’s death.

While they wait for an appeals court decision, Harborview Marina falls into worse shape, the Inner Harbor eyesore framed by the familiar sights of the Domino Sugar plant and T. Rowe Price headquarters. It’s anyone’s guess what happens to the marina next.

There’s been no communication from the owners, said Jeff Dewberry, president of the Riverside Neighborhood Association. With no one watching, he added, Harborview has become a dumping ground for abandoned boats.

“We’d love to know if there is an actual plan here,” he said.