Construction officially began Monday on the new community of Port Covington in South Baltimore, with city and state leaders joining developers to shovel some ceremonial dirt on a spot expected to become offices, shops and apartments over the next two and a half years.
The first phase of the 235-acre, $5.5 billion redevelopment of a largely empty waterfront expanse will start immediately with land grading and then roadwork in the fall, according to Marc Weller of Weller Development, which is overseeing the project for owners Sagamore Development and New York investment bank Goldman Sachs.
“The project is real and we’re open for business,” said Weller at the groundbreaking event held under a tent in the rain. “We’re not just changing the narrative of Baltimore, we’re changing the trajectory.”
Weller was joined by Baltimore Mayor Bernard C. “Jack” Young, several council members, Lt. Gov. Boyd Rutherford, Maryland Rep. C.A. Dutch Ruppersberger and community members who got behind the project because of its expected job creation and economic spinoff.
The developers overcame some initial City Council and community opposition to gain approval in 2016 for a $660 million tax increment financing deal. In such deals, municipal bonds issued to pay for infrastructure work like roads and water and sewer lines will be repaid with the project’s property taxes deferred from city coffers.
Weller said developers will foot the initial bill for that work so the project can get under way, and seek reimbursement after the first set of bonds are sold, likely at the beginning of 2020.
The first phase of the development carries a $600 million to $700 million price tag, and several businesses already have committed to close to half the space in the first two office buildings. Three anchor tenants, all with a cybersecurity focus, have been announced. They are DataTribe, AllegisCyber and Evergreen Advisors.
A four-building development called Rye Street Market will include restaurants, shops, an open-air market and food hall and a rooftop event space.
“Port Covington is exactly the type of smart, thoughtful redevelopment we need to put South Baltimore back on the map,” Ruppersberger said. “This project will add thousands of new jobs, create park land and open space where an environmental wasteland once stood, and provide affordable housing for more families. And it’s going to create a domino-effect of economic wins for the entire city and region.”
Community leaders, too, say that this project will be good for the city because the developer is required to involve local minority firms in its construction and to hire city residents to work there.
“Baltimore needed a grand vision,” said Terrell Williams, an organizer for the community improvement group Baltimoreans United In Leadership Development, or BUILD, and co-director of Turnaround Tuesday, a job-training organization. Port Covington developers “had that vision and are an example of how to use tax increment financing for the community.”
The initial phase of the development will include 1.3 million square feet of offices, 337,450 square feet of retail, 976,667 square feet of residential and 285,000 square feet of hotel space. The entire project is expected to take 25 years to complete.
The property now contains an Under Armour office building, with plans delayed to develop a headquarters campus. The Baltimore-based athletic brand’s founder and CEO, Kevin Plank, assembled the Port Covington property and founded Sagamore Development along with Weller.
The property also includes the Sagamore Spirit distillery, owned by Plank, and Rye Street Tavern. The Baltimore Sun has a long-term lease on its facility there, which contains the news, business and printing operations of the newspaper and other publications.
Developers plan to continue holding events on the property, including a Fourth of July festival with fireworks. Now separated from the rest of South Baltimore by rail lines, Interstate 95 and other roadways, the property eventually will have an extensive pedestrian and bike circuit to better connect it.
The developers also said they are working on a partnership with the ride-sharing company Lyft to provide $2 rides anywhere in the greater South Baltimore area as a means of helping residents more easily access groceries and meet other transportation needs.
“As lieutenant governor, and as a Marylander, it is truly wonderful to see how the Port Covington development has grown and progressed over time,” Rutherford said. “As a public/private partnership, this community serves as an excellent example of what can be accomplished when the public and private sectors work together.”