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Selling baltimore after the rioting

City and state officials aim to ease worries about Baltimore at real estate conference

As thousands of people head to Las Vegas this week for one of the real estate industry's premier events, Baltimore's political and business leaders said they plan to court national retailers and investment prospects with the same playbook they use every year.

It just might be more important this time.

April's protests placed the spotlight on long-impoverished communities in Baltimore, focusing attention on the need for investment, even as riots and looting raised real questions about security risks.

This week's International Council of Shopping Centers conference, which draws thousands of national chains, developers and economic development officials for mingling, deal-making and intelligence gathering on new markets, offers local participants a chance to address questions, reassure people of the city's wider stability and remind them of its assets and purchasing power.

"It's very important to not let what CNN showed … that that picture be applied to the entire city," said Doug Schmidt, a principal at WorkShop Development, who worked on Canton Crossing and is developing a BJ's Wholesale Club and scouting for street-level store tenants for a proposed apartment building on the site of the former Della Notte. "That's our real challenge."

More than 660 people from Maryland's public and private sectors are slated to attend. Gov. Larry Hogan, R. Michael Gill, the secretary of the Department of Business and Economic Development, and Howard County Executive Allan Kittleman are all confirmed.

Baltimore has sent a delegation for years, trying to woo grocery stores to the city's food deserts and dispel concerns that people here do not have enough spending power to make an investment profitable.

Mayor Stephanie Rawlings-Blake, who has attended the conference for at least the past three years, canceled her trip to remain in Baltimore and lead rebuilding efforts after the unrest, in which 113 officers were injured, 61 buildings caught fire, more than 350 stores sustained damage and nearly 500 people were arrested.

But the city's delegation is still set to number about eight, including City Council President Bernard C. "Jack" Young and Baltimore Development Corp. President William H. Cole IV.

Young spokesman Lester Davis said the council president wants to go to address questions and make the city's case.

"Now really is a time that Baltimore City [must have a] heavy presence, just to have a lot of those conversations with retailers and make sure there are people there that can speak to the need that's still there for some of our communities," Davis said.

In recent years, the case appeared to be getting easier to make, as officials could point to the success of developments such as Canton Crossing. It also was considered a big win when a ShopRite opened in Howard Park last year — the first foray by owner and operator Klein's Family Markets into the city.

Rawlings-Blake spokesman Kevin Harris said the success of those projects demonstrates Baltimore's viability as a market. The administration's strategy, which was working to lure investment to neighborhoods, hasn't changed, he said.

"It's going to take more than a few hours of rioting to deter people from doing business in Baltimore," he said. "The city is growing, it continues to grow, there are a number of policies at work that are continuing that growth. … People know that this is a market that they definitely want to tap into, and this administration is working aggressively to secure those opportunities."

The BDC's Cole said the business community has been supportive.

"I'm not hearing the type of negative commentary that you would anticipate," Cole said.

When Aris Melissaratos, interim dean of Stevenson University's School of Business and Leadership and secretary of business and economic development under former Gov. Robert L. Ehrlich Jr., watched the riots unfold on television, he said he was convinced they would "set us back 10 years."

Since then, though, he's been impressed by the city's relatively quick return to normalcy, as well as by the additional steps being taken to address the underlying issues, such as the appointment of longtime Baltimore civic leader Michael Cryor to lead the One Baltimore effort.

"I'm sure that it will come up because it's the most recent news that the national media has shown about Baltimore," Melissaratos said. "I think there's great hope here, and I think our message ought to be for the delegation that goes to really hold their heads up and be positive and tell them what they're doing and the leadership we've put in place to overcome this little blip."

Economist Anirban Basu, CEO of the Sage Policy Group, said he thinks the impact of the riots will be more than a blip, even if no one cancels previously scheduled meetings at the conference.

"If I was a retailer, the last thing I would be saying is 'We are turning our backs on Baltimore,'" he said. "I don't think you're going to hear that message from anybody, but actions speak louder than words."

Basu said the riots, and the needs they exposed on national television, reinforced the impression that the city lacks spending power. That may make retailers interested in investing in the region look to downtown Towson or Columbia, rather than to Baltimore, he said.

"All the focus over the last few weeks has been upon the grinding effects of poverty, how difficult it has been for Baltimore to deal with poverty," he said. "If that's the message a retailer hears day after day, one has to ask how much time they will take studying the actual demographics."

Hogan said he already has heard people say they're reluctant to go back into the city, or move, invest or spend money there. Overcoming that reluctance will be hard, he said.

"We've got so many assets and such much strength, but there's no question that it's a tougher sell now," he said.

Schmidt, the developer, said investors and lenders haven't backed away but they are expressing anxiety and uncertainty that wasn't there before.

He wants to see leaders make the case that the problems in Baltimore are common to many U.S. cities, explain what they're doing to address them and reassure people that a similar violent outbreak won't happen again.

"The biggest question for outsiders is, 'Is this a one-time event or is this the beginning of a continuous problem?'" he said.

David Warnock, the new board chair of the Greater Baltimore Committee and a founder of the Camden Partners private equity firm, said he is convinced one effect will be a renewed sense of civic pride that will help him make the case to businesses about the need to work on efforts like adopting and reopening recreation centers.

For outsiders and others, Warnock said, he can promote the high-quality workforce and the strength of universities such as Johns Hopkins and University of Maryland and put the events in context.

"You have to explain the fact that our great resources — the Inner Harbor, our hospitals — weren't at risk, that Baltimore is a safe place to live and work," he said.

The riots haven't appeared to make tickets for the Maryland Party — one of the ICSC's biggest parties — any less coveted. Some 1,500 people are expected for the bash, which will feature a brass band and some kind of parade in keeping with a Mardi Gras theme this year, said organizer Howard Perlow, executive vice president of Commercial Settlement Services.

"I think the question will be asked because Baltimore's part of the state of Maryland, but I think Maryland has been very successful over the last 10 years in increasing our retail environment," Perlow said. "The city is an area that I think will be affected short-term, but not long-term."

Retailers take months — sometimes years — to make location decisions and are guided primarily by data, looking at demographic information such as income and education level, said Thomas Maddux, a Towson-based principal at KLNB Retail, who has represented tenants such as Old Navy and Pier 1. Maddux said that could mean the riots will have less of an impact on the retail sector than some fear.

"We want to continue to put our best foot forward … but at the end of the day, retail site selection decisions are made scientifically," he said. "Perception is important. No doubt people will talk about it for a long time, but I think the business side of things will get over it more quickly."

nsherman@baltsun.com

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