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Creating the market dynamics for Baltimore redevelopment

The best way to revitalize Baltimore is to create market dynamics that encourage everything to be redeveloped.

Within days following the 2002 murders of the Dawson family, who were killed in retaliation for one member's testimony against area drug dealers, 400 people from Baltimoreans United in Leadership (BUILD) and the city's Oliver community stood in front of the Dawsons' firebombed home and vowed to not let those seven deaths be in vain. The group organized and made a strong commitment to changing the neighborhood. The result of that long process is now becoming evident and is highlighted in the current public debate over the impact of the mayor's Vacants to Value program, which uses the East Baltimore transformation as its blueprint.

Spearheaded by BUILD, local churches and residents partnered with city leaders and Reinvestment Fund, a community development organization with an approach to neighborhood revitalization that marries capital with data for strategic investment, to change Oliver. The joint effort was formalized as "TRF Development Partners" (DP), and focused on developing solutions to improve social mobility.

DP and BUILD worked with hundreds of East Baltimore residents to craft a revitalization plan for the community, which encompasses an area stretching from Penn Station in the northwest to Johns Hopkins Medical Center in the southeast. This work identified two initial investment areas, Oliver and Greenmount West; these areas are seen as catalysts for broader market growth.

Seventeen mission investors, including faith-based institutions and philanthropy, have invested $10 million to support DP's work in East Baltimore. The capital is currently fully invested and leverages public subsidy sources and private market rate debt. It has been an unusual partnership that has focused on repairing market dynamics as the most effective way to renew the community.

When DP started its redevelopment work, Oliver was clearly one of the most troubled neighborhoods in the city. At the height of the real estate market, there was virtually no investment activity in Oliver, but last year over 100 building permits were issued. Since 2008, DP's work accounts for half of the vacant properties that were redeveloped in Oliver and a third of the vacant properties redeveloped in the Greenmount West neighborhood. These investments led the restoration of a previously stagnant market where others now feel confident enough to also invest.

From the start of its work, DP suggested that the most effective approach to Baltimore's redevelopment is not to redevelop everything but rather to create market dynamics that encourage everything to be redeveloped. This is sound public policy that recognizes the limitations of public funding and that the problem of urban disinvestment is many times greater than the public funding available to combat it in Baltimore and across the nation.

DP's work attracts other investors, who in turn use private capital to lower vacancy rates. DP identifies specific locations that when redeveloped become catalysts for additional investments. In doing so, DP's development is limited to a small but strategic segment of the larger distressed area. Once DP investments take hold, private investors follow, leveraging the activity and greatly expanding the redevelopment investment in the area.

Simply walking the streets of East Baltimore one can see a visible difference; however, this redevelopment is not complete. The Oliver and Greenmount markets are stronger, and many new families are settling there, but the economic conditions remain fragile and continued investment is necessary to secure the gains that have been made. This is a complex process involving many actors; Baltimore Housing Commissioner Paul Graziano and the Vacants to Value (V2V) program are integral to economic activity in East Baltimore. Using V2V citywide is logical, but as noted in a recent Abell Foundation report, financial capital and redevelopment infrastructure — including private developers and broad community support — are necessary if similar outcomes are to be achieved elsewhere in the city.

The need for citywide urban revitalization is not unique to Baltimore; it has been an intractable national issue for decades. And the total effort in East Baltimore may be small relative to the scale of the city's problem, but given the complexities of the challenges and Gov. Larry Hogan's renewed commitment to addressing vacancy, the success there offers a much-needed template for neighborhoods like this across the city.

Sean Closkey (Sean.Closkey@reinvestment.com) is president of TRF Development Partners. Calvin Keene (Pastor_ck@comcast.net) is pastor of Memorial Baptist Church and a member of BUILD's strategy team.

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