Baltimore's new economy meets its old one in Port Covington

Fifteen years after the city approved a plan to build a Wal-Mart in Port Covington, beside deep-water berths and close to Interstate 95, the decision still rankles those who would reserve the waterfront for marine industries.

With its mostly open spaces and industrial zoning, it was one of the few places along Baltimore's harbor that could accommodate new port-related industrial development that might create the kind of blue-collar jobs on which the city was built.

But a new proposal to turn the land into an Under Armour campus and mixed-use neighborhood, privately backed by the company's billionaire CEO, would take the area even further from its industrial roots. This plan, however, is unlikely to provoke upset, many said, because it provides an alternative to the company expanding into port operations near its headquarters in Locust Point.

"Any place that's used only for beauty and not for practical purposes like shipping creates some problems in my mind," said Helen Delich Bentley, a former congresswoman and adviser to the port, which is named for her. "Having said that, if we have to make a choice in the harbor, I would rather have Port Covington be that choice for Under Armour than any other part of the port."

Under Armour CEO Kevin Plank has spent more $90 million piecing together property on both sides of Hanover Street in Port Covington, south of I-95 on the Patapsco River's Middle Branch. His private real estate firm, Sagamore Development Co., now owns more than 120 acres and more purchases are in the works.

His team is working on a master plan for Port Covington, expected to include a distillery, offices, retail, residential and other mixed-use construction. A conversion of a former Sam's Club into offices, expected to open by year's end, could relocate more than 400 employees, largely from the firm's finance and technology departments.

"You need a big engine to light up that side of the city," Plank said in an interview this week. "Under Armour can be a pretty big engine."

Across the country, former urban industrial zones are being transformed by companies that are finding new value in cities, which give them proximity to a professional workforce that seems to prefer urban living, said Bruce Katz, founding director of the Metropolitan Policy Program at the Brookings Institution.

"What we've seen is the gradual and now accelerating revaluing of cities by companies and by a segment of the population. ... Twenty-five years ago, we were really just at the beginning of this trend," he said. "This is sort of almost a generational cycle that is really coming to fruition now."

Such changes can prompt tensions, as valuable waterfront is gobbled up for new uses.

Under Armour's growth had put pressure on the port, which as recently as 2013 was studying a plan to relocate Westway Terminals' steel tanks to Port Covington to allow the sports apparel company to expand its headquarters toward Fort McHenry.

Under Armour's decision to move to Port Covington offers a kind of protection to the marine businesses in Locust Point and other properties in the marine industrial zoning overlay district, currently protected for marine uses, said Rupert Denney, general manager of C. Steinweg Baltimore, the local office of a Dutch freight logistics firm.

The prospect of fewer potential conflicts was part of the draw for Sagamore, Plank said.

"What we liked about over there is, it didn't have a lot of one-off owners, it was mostly industrial space and you're not dealing with a neighborhood association that maybe has a different view," Plank said.

Plank's vision for Port Covington, still only roughly outlined, would transform an area that today is home to a Wal-Mart and some industrial businesses, including The Baltimore Sun's printing complex and NGK-Locke Insulators manufacturing plant.

But the area's open spaces make it easy to forget that it once played a major role in the city's 20th-century industrial and maritime economies.

The site of a fort in the War of 1812 and later a garbage dump, Port Covington came of age at the turn of the century as the terminus of the Western Maryland Railway, from which coal, grain and other goods hauled from Maryland, West Virginia and Pennsylvania were shipped to cities around the world.

The first terminals opened in 1905. Roughly 50 years later, when the Western Maryland Railway commissioned a company history, Port Covington encompassed 190 acres with 75 miles of railroad track and room for 2,000 railroad cars. Piers extended more than 1,000 feet into the water and could handle 23 oceangoing vessels at once.

As the railroad was absorbed into companies that eventually became CSX, the site fell into disuse. Baltimore leaders, intent on keeping The Sun's printing plant in the city, worked with CSX to refashion the area as an industrial office park, an effort dubbed "Hunt Valley by the Sea." Contractors demolished the 18-story grain elevator in 1989.

The Sun purchased 60 acres and spent more than $100 million to open a new printing plant in 1992. The city completed millions of dollars in infrastructure improvements in the area. But much of the other anticipated development — close to 2 million square feet of Class A office space, a 450-room hotel and conference center, shops, restaurants, a health club and an 800-slip marina over the next 10 years — never materialized.

In 2000, CSX sold about 45 acres to Starwood Ceruzzi, which opened a Wal-Mart and Sam's Club after the city signed off on a zoning change.

When the economy floundered, plans stalled. The Sam's Club closed in 2008. Proposals for residential and commercial building by subsequent owners did not move forward.

Bentley said she did not agree with the decision to approve the building of stores at the site.

"I was shocked and frankly very angry about it," she said. "Deep water is like gold in the maritime world. ... To put two department stores there that could go anywhere, I felt was insane."

But James White, the Maryland Port Administration's executive director, said the location of The Sun's printing presses at Port Covington made the rest of the tract too small to make sense for large investment. The port is now looking to expand at Sparrows Point in Baltimore County, where 3,000 acres that were once home to a huge steel mill awaits redevelopment.

"If there's a deep-water property, it always has interest for us," White said. "If we have to maintain the channel to get to a marine terminal that's got 66 acres of land, as opposed to maintaining a channel that's got 3,000 acres of land, that's a no-brainer."

White praised Under Armour's potential as a major job creator and said there's no tension between the sports brand and the port.

"We can coexist," he said. "We would like to attract Under Armour as it grows to move more of its overseas cargo, the imports, through our marine facilities."

With Plank's interest in the property for Under Armour, the city finally might have found the company to make its Port Covington vision a reality, said David Gillece, who headed the city's former economic development agency when plans for the office park were being developed and is now regional managing principal at the commercial real estate firm DTZ.

"It didn't happen then because the anchor tenant never materialized, and a project of that scale demands that first mover who's big enough to launch the project," Gillece said. "Roll the clock forward 20 years and the ultimate anchor has arrived on the scene, which I think is great news for Baltimore and a great project for Under Armour."

For his part, Plank said he embraces Baltimore's gritty industrial past. To this day, trains rolling along Key Highway pass by the company's headquarters all the time.

"We can't lose that. It's what makes us Baltimore," he said. "It's what makes us real."

Baltimore Sun researcher Paul McCardell contributed to this article.

nsherman@baltsun.com