The developers of the sprawling Port Covington property on the South Baltimore waterfront say they will soon seek their first sale of city bonds and put the proceeds toward the infrastructure to support two or three mixed-use buildings that will open in 2020.
No office or retail tenants were announced by Weller Development Co. Tuesday during a press event, but the news marks the first significant movement on the $5.5 billion project since the September opening of Rye Street Tavern, the restaurant at the Sagamore Spirit distillery that opened there in April 2017.
There is interest in the 260-acre peninsula, envisioned as a whole new city neighborhood anchored by a new 50-acre Under Armour world headquarters, said Marc Weller, who launched Weller Development Co. last year to spearhead the broader project. The property eventually will offer not just offices and shops, but market-rate and affordable housing and possibly other venues such as a new arena long sought by city officials and promoters.
“We’re looking to get more people into the city, not move people around the city,” said Weller, who co-founded Sagamore Development with Under Armour chairman and CEO Kevin Plank. Sagamore co-owns the site in partnership with Goldman Sachs Urban Investment Group.
Weller said the waterfront site’s proximity to Interstate 95 and pledged public and private investment have brought a lot of attention from companies looking for space.
So far on the site, a former Sam’s Club store was converted into offices for Under Armour and a former city transportation garage was transformed into City Garage, which is home to several ventures including a shared work space and an Under Armour research facility.
The Baltimore Sun Media Group also has a long-term lease on its printing plant there. The building will become the newspaper’s headquarters in coming months.
Port Covington was pitched to Amazon for its second headquarters, but was rejected like many others around the country when the retail giant chose finalists in January.
Developers insist, however, that Port Covington is still on schedule, with greening and infrastructure improvements already underway, though no city bonds have been sold.
The bonds were part of a controversial $660 million tax increment financing deal struck with the city in 2016. They will be repaid with the project’s property taxes deferred from city coffers. Critics derided the deal as corporate welfare, while supporters pushed the deal, the largest in Baltimore’s history, citing thousands of potential new jobs and the importance of retaining Under Armour in Baltimore.
William Cole IV, president of the Baltimore Development Corp., said during Tuesday’s press event that the bonds will be sold in many rounds over years. He didn’t say how much would be raised in the first round.
it’s not clear how fast Under Armour will move to build more space, though it has outgrown its Locust Point headquarters. The Baltimore-based athletic apparel brand has lost a bit of its shine since the deal was struck, seeing its sales struggle, its profitability evaporate and its stock price plunge. It’s reorganizing and cutting jobs. The stock has edged up a bit in 2018 after losing more than half its value since a peak above $51 in the fall of 2015.
Goldman Sachs Urban Investment Group joined Sagamore Development in the project last fall, saying it would invest $233 million. Margaret Anadu, the urban investment group’s managing director, was touring Baltimore on Tuesday and said that the global investment banking firm remains bullish on Port Covington.
She couldn’t say how exactly the Goldman Sachs’ group, which focuses on “impact investing” in underserved areas, plans to evaluate its return on investment. She said that it would not just count square feet of office space leased and jobs created, but would consider how people were prepared for jobs, for example.
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Donald C. Fry, president and CEO of the Greater Baltimore Committee, a group of business and civic leaders that strongly supported Port Covington, said he was pleased to hear that more buildings were getting underway at Port Covington. He said the development holds “great promise” for Baltimore.
Fry said the property was well suited to become a full neighborhood, with a variety of amenities for all kinds of city residents. He said he would welcome a variety of venues on the site, including a new arena, given the cramped space and aging structure of the current Royal Farms Arena facility on downtown’s West Side.
Several parcels have been pitched over time, from a spot near Power Plant Live close to the Inner Harbor to the waterfront at Canton Crossing to a parcel near the convention center. Weller said that operators have approached the Port Covington developers and they are interested, though not actively pursuing a deal.