The city has agreed to pay $2.86 million to buy the food court in Lexington Market, giving it full ownership of the entire Lexington Market complex for the first time since the 1980s.
The agreement, outlined this week for the Board of Estimates, comes as city government pushes for changes at the longtime west-side institution. This month, Mayor Stephanie Rawlings-Blake announced new board members and staff at the Baltimore Public Markets Corp., which manages the city's six public markets.
The lease for the Lexington Market Arcade, located on the southern edge of the complex at 130 N. Eutaw St., was due to expire this year. The landowner, Arcade Limited Partnership, is an affiliate of Alex. Brown Realty, which did not respond to a request for comment.
"While we could have tried to extend the lease and negotiate for that, it's no secret that people want to see changes at Lexington Market," said city spokeswoman Caron Brace. "The city now has all rights to Lexington Market, which is great for future plans and improvements. … At this point, this was the most sensible thing to do."
To help pay for the $11 million, two-story addition, which opened in 1982, the city agreed to a sale-leaseback arrangment in 1984. Since 1992, when the lease was first amended, the city has paid about $1.6 million per year to lease the 20,000-square-foot area, Brace said.
The city already owns the rest of the building, which dates to the 1950s. A public market has been located in the neighborhood since 1782.
Robert Thomas, executive director of the Baltimore Public Markets, said he does not expect the sale to make any immediate differences at the market, where the arcade already functions as if it were city-owned. But it may ease the city's ability to make changes, he said.
"I don't anticipate any material changes," he said. "It's really more getting all the legal ducks in a row."
Lexington Market has struggled with declining foot traffic, as nearby development plans, such as the "Superblock," stalled in litigation. This year, the market estimated that the number of annual visitors has dropped to about 2.2 million from 2.8 million in 2007.
It has also suffered from public safety concerns related to drug sales. Last year, police made 240 arrests at or next to the market, including 170 that were drug-related.
This month, the city said it would seek bids for management of Federal Hill's Cross Street market from private developers.
The mayor's chief of staff, Kaliope Parthemos, said at the time that turning that historic market over to a private developer would free Baltimore Public Markets to focus on Lexington Market. The city does not necessarily plan to follow the same model with Lexington Market, she added.
Lexington Market is "self-sustaining," but it depends primarily on parking revenue, according to Downtown Partnership President Kirby Fowler, the new chair of Baltimore Public Markets's board.
Portland, Maine-based Market Ventures Inc. is expected to present a master plan for Lexington Market next month.
Market Ventures President Ted Spitzer said the design of the current arcade is inefficent, with limited space for vendors. Like the rest of the complex, its infrastructure is also old and in need of investment, he said.
"My understanding was the idea is the city would control the whole property so it could implement the master plan with less constraint," Spitzer said. "Better days are ahead, but it does require that investment."
Baltimore Sun researcher Paul McCardell contributed to this article.