H&S Bakery freeing up Harbor East site with new distribution center

H&S Bakery is moving its Harbor East distribution center to an East Baltimore business park, freeing up prime real estate that the breadmaker-turned-developer has eyed for development for more than a decade.

The facility, bounded by South Central Avenue and South Eden, Fleet and Aliceanna streets, lies on the edge of the fast-growing shopping, hotel and business district. Its future home, meanwhile, is a development that was once in bankruptcy and has struggled to attract tenants. City officials lauded H&S for keeping the move within city limits.

For neighbors of the H&S facility, in an area where huge bread trucks now share roads with luxury cars, the possibility of further growth leaping eastward across Central Avenue is one they welcome, albeit with trepidation.

The city has a lofty vision for the corridor, particularly given plans to extend the roadway southward with a bridge connecting to a planned development for Exelon Corp. at Harbor Point.

But the possibilities come with worries about traffic congestion and overdevelopment, given other planned projects that could add to growth in the neighborhood.

"Obviously, Harbor East seems to be at maximum density, and they need more space to increase that, but you wonder," said Nicholas Johnson, owner of Fells Point furniture store Su Casa, which rents warehouse space next door to the H&S center. "There's so much to get going, you wonder if it can all happen at the same time."

City planning officials approved site plans Thursday for the new H&S facility at the Hollander 95 business park. The bakery, known for manufacturing McDonald's hamburger buns, plans to build a new distribution center and maintenance building.

H&S officials did not reveal specific plans for the Harbor East distribution site and could not be reached for comment Friday. But the company has said it planned to move the facility and free the area for development as early as 2002.

City Councilwoman Rochelle "Rikki" Spector, a member of the city planning commission that approved H&S' plans, said she didn't know what was in store for the Harbor East site. But she said she was pleased nonetheless.

"What I was excited to hear is they were staying in the city," Spector said.

Hollander 95 falls just within the city's eastern boundary, overlooking Interstate 895.

Developer Hollander Rock LLC had planned several buildings on the 51-acre site for which it paid $5.1 million, but had completed just one before M&T Bank foreclosed on the property in 2010. FRP Development Corp., a Sparks-based real estate development company, bought the building and vacant land for $7.45 million at a foreclosure auction later that year.

H&S' decision to finally pursue the new facility comes as other development in the area northeast of Harbor East is stirring. While projects such as the Marriott Waterfront, Four Seasons hotel and Legg Mason office tower in the heart of Harbor East have anchored the rebirth of the neighborhood, further development has trickled eastward.

Across Fleet Street from the H&S distribution center, Bethesda developer Ken Finkelstein is behind a planned 208-room Hyatt Place hotel. Construction could start this summer, and Finkelstein welcomed the possibility of more activity nearby.

"It's been thought about and talked about by everybody for a while, and it seemed to make sense," Finkelstein said of H&S' move. "Folks are kind of poking around in that neighborhood to see what other development opportunities they might be able to come up with."

Another block farther north, at Eastern and Central avenues, one local entrepreneur plans to move his company to a downtrodden building decorated with a banner declaring it the future world headquarters of Groove Commerce. The e-commerce company, whose clients have included Mitt Romney's presidential campaign and local sports retailer Lax World, plans to move its 25 employees there this summer.

"It's always disappointing to see manufacturers and those types of things move," said Ethan Giffin, the company's CEO. "But the overall impact to redevelop that area could be pretty significant."

City transportation and planning officials are envisioning a bustling corridor around Central Avenue, which will connect with the Harbor Point development planned for the site of a former Allied Signal chromium plant between Fells Point and Harbor East.

Harbor Point, an H&S Development project, is home to a Morgan Stanley-anchored office complex. Work is expected to start this summer on a 23-story skyscraper to house energy giant Exelon's regional headquarters, a $1 billion mixed-use project on 28 acres.

City economic development officials are urging city approval of H&S Properties' request for $107 million in tax increment financing to pay for roads, utilities and parks at the project.

Not all in the neighborhood welcome the added traffic and development, said Johnson, who lives in Fells Point.

"From a resident standpoint, I worry about the traffic," the Su Casa owner said. "But as a business owner, obviously I want as much traffic as possible."



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