Holiday Inn

A Holiday Inn is already located next to the Horseshoe Casino on Russell Street. (Christopher T. Assaf, Baltimore Sun / February 19, 2014)

The gleaming new Horseshoe Casino Baltimore that greets visitors entering the city on Russell Street rises from gritty surroundings, flanked by a Holiday Inn Express and a concrete bunker-like block of storage units.

Those two neighboring properties tell different stories about the possibility of a casino-powered transformation of the gas station-lined corridor, which links the Baltimore-Washington Parkway and Interstate 95 with M&T Bank Stadium, Camden Yards and downtown.

The hotel owners and others say the $442 million casino will put the Carroll Camden section of South Baltimore on the map and hope it will bring spillover development to the largely industrial area. The owner of the storage business, content with a profitable operation in a convenient location, could not care less.

"There's a lot of potential in the area, and it could go in a few different directions," said Tom Stosur, director of the city's Planning Department, which is developing a master plan for the corridor that won't be ready until later this year. "We're very concerned and aware of keeping the existing job base there in the general vicinity and building on that."

To date only one project that plays off the casino has been announced: a plan to revive the music club Hammerjacks. But even that project is closer to the Ravens stadium than to the casino.

Casinos typically have a mixed effect on nearby businesses, a reflection of a business model that works to lure customers inside and keep them there.

M.J. "Jay" Brodie, who retired as head of the Baltimore Development Corp. in 2012, said the area has potential as an entertainment district, but he would not be surprised if the transformation takes time.

"Baltimore is not a right-away city. It's not where people rush in and say 'Oh, God, there's a casino. We've got $5 million, we're going to buy up all the property around it,'" he said. "That's not an ordinary Baltimore reaction."

Greenbelt-based Baywood Hotels spent about $6 million to buy and renovate the Holiday Inn Express Baltimore at the Stadiums several years before casino gambling was legalized in the state. It draws on customers headed to sports games or preparing to leave on a cruise, too far from the Inner Harbor to charge the top-tier rates commanded by the city's other hotels.

"For the longest time … we'd get feedback from guests saying there's really nothing around," said Beau Athia, Baywood's vice president of capital investments. "I think that with the casino being right next door, we're not going to be considered a second option, if you will. … Hopefully some residential goes in and some better retail, and we'll be considered part of the Inner Harbor landscape."

Baywood is sprucing up the hotel, adding fresh paint and landscaping the property.

It's not clear whether the casino will draw customers from out of town or have a primarily local base, Athia said, but if demand ticks up, the hotel, traditionally an inexpensive option, will raise its rates.

"Being right next door is helpful," he said.

Visit Baltimore President Tom Noonan was less hesitant about the hotel's prospects, and predicted the casino will spur creation of another hotel as well.

"I'm sure it's a dream scenario for them," he said. "They're going to do just great, and I think another hotel could survive there as well."

To the north of the casino, however, the owner of the three-story Public Storage said the casino next door will not affect its plans.

"Our strategy is once we build it, we own it forever," said Clemente Teng, vice president of investor relations for Public Storage, a real estate investment trust that owns and runs about 2,200 storage facilities across the country and in Europe.

The company "never" sheds property, unless it is taken by eminent domain, Teng said. "Everybody always says 'highest and best use,' but we never sell our facilities because nobody wants to pay the clearing price."

The operator of the other nearby storage facility is more open.

"If an offer comes along that sounds very attractive, I'm sure they'd be willing to listen, but at this point it's kind of a wait-and-see," said Michael Belanger, general manager of the privately owned U-Store Management. "Pretty much we're happy the way things are going."