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Port Covington developers, who envision an influx of new office space, hotels, shopping, residences and restaurants, are banking on the idea that the project will be able to attract educated, white-collar employees to live and work in the area.

A market report, commissioned by Sagamore Development and recently released by the city, predicts just that. It says decades of residents and jobs leaving the city appear to be reversing, and points to a rising employer preference for locating in areas that combine office space with retail and residential options.

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Sagamore, owned by Under Armour CEO Kevin Plank, is planning the $5.5 billion development to house the apparel company's future headquarters in South Baltimore.

"The magnitude of this project makes determining the potential demand for the employment and residential space being developed complex, as no similar project has been undertaken in the region," the study said. "However, the project is consistent with improving residential and employment performance occurring in cities across the country and in Baltimore."

The study, completed by Battelle Technology Partnership Practice in December, was released late last week amid debate over whether the city should borrow $660 million to help pay for roads, sewers, parks and other public infrastructure on the site.

Some observers say they are concerned that city officials have not fully considered what might happen to the city's proposed investment if sunny financial predictions don't pan out.

"It's a gamble," said John Hentschel, founder and CEO of Hentschel Real Estate Services, who worked for the city in economic development in the 1980s before entering the private sector. "What is the alternate universe if that doesn't happen?"

Baltimore has added more than 20,000 jobs since 2010, when employment in the city hit bottom, according to the Labor Department. The population also has climbed by about 900 since then, according to census estimates. That's a turnaround from decades of decline.

But the gains would need to accelerate significantly for the city to make up ground lost since the start of the millennium. Moreover, the growth in jobs and population has continued to lag behind the Baltimore metro area and the state.

Nationwide, big cities have been adding population, a trend that Battelle argued would benefit Baltimore.

But some demographers contend that more recent census estimates suggest that influx may have peaked, at least in some parts of the country, as growth returns to the Sun Belt.

The Maryland Department of Planning predicts that the city's population and employment will grow by less than 1 percent annually through 2030.

Battelle concluded that's a low-ball estimate based on historic patterns, not recent performance, which not only shows new construction picking up, but job and population gains among the so-called creative class, which ranges from legal and business occupations to media, sports and architecture.

"Given both national urban growth trends coupled with the recent performance of the city and ongoing development activity, there is strong reason to expect that Baltimore City can exceed these low projections for population and employment growth and support continued development projects like Port Covington," the report says.

The project is expected to generate $7.6 billion in economic activity statewide and support over 42,000 jobs, including construction. Battelle estimates that will generate $242 million in combined state and local government revenues, before any expenses.

The analysis is based on a proposal for about 10.3 million square feet of development for the roughly 260-acre area. In their application for city financing, Sagamore officials said they anticipate an additional 5 million square feet to be built on the peninsula, located on the waterfront south of Federal Hill and Interstate 95.

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By comparison, Harbor East represents about 3 million square feet on 20 acres.

The Port Covington project has the backing of Mayor Stephanie Rawlings-Blake. Even City Council members who have questioned aspects of the project hail it as a boon for the city.

Economist Richard Clinch, who worked on the study at Battelle and now leads the University of Baltimore's Jacob France Institute, said the project's success depends on continued economic recovery in the near term. While it will draw on the regional economy, it also has the potential to transform that market, helping to reduce the region's reliance on the federal government, he said.

"By supporting the growth of a local, creative, rapidly growing business in the form of Under Armour, Port Covington represents an important investment in both diversifying and strengthening the City and regional economy," he said in a statement.

Under Armour is expected to drive demand for most of the office space in Port Covington, especially during the early years of the project, according to the market study.

Having a committed anchor is critical to making the project work, but the city should be looking for guarantees that the company will stay, Hentschel said. City officials also need to consider how growth in Port Covington might affect other real estate projects in other parts of the region, he said.

"There's only so much demand, and if one project gobbles up that demand, what happens to other projects?" he said. "I haven't seen anybody asking the fundamental questions, and that's really problematic."

Scott Klinger of Washington-based Good Jobs First, which has testified at hearings about the project, said projections based on economic trends in other cities and in Baltimore fail to account for fundamental problems with the project, including the difficulty of accessing the Port Covington site.

It's also worrisome for a project's fortunes to be so closely tied to one company, he added.

"They've had a great track record, but they're in a disruptive industry. Someone could come along and knock them off," he said.

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