Port Covington developers, state officials celebrate start of vertical construction in South Baltimore

“This is a big deal,” Maryland Gov. Larry Hogan said at Wednesday’s event during in-person remarks. “A vibrant Maryland depends on a strong Baltimore City. This is a shining example of the potential, and positive growth, that the city of Baltimore needs.”

Wednesday’s event follows more than four years of work on Port Covington by its current development team led by Weller Development Company and backed by Under Armour founder Kevin Plank’s Sagamore Ventures and the Goldman Sachs Urban Investment Group.

Supporters of the redevelopment have long held that investment in Port Covington will activate the largely fallow swath of land along East Cromwell Street site, creating jobs, public parks and economic stimulation. Already, several potential tenants have proposed laying the groundwork there for a cybersecurity hub dubbed “Cyber Town USA.”

Maryland Department of Commerce Secretary Kelly M. Schulz said in recorded remarks that the redevelopment would create tens of thousands of jobs, many of them permanent, and would add an estimated $300 million in new tax revenue over the next decade.

City officials in 2016 approved a controversial tax increment financing deal, Baltimore’s largest ever, in which the city will float $660 million in bonds to build infrastructure over the course of the project’s construction and the developer will repay the bonds through future taxes. In 2017, New York investment bank Goldman Sachs invested $233 million and became a partner in the development.

In January, financing closed on the project’s second phase in a venture totaling more than $650 million, including approximately $137 million in tax increment financing bonds.

Speakers at the groundbreaking event said Port Covington’s strengths lie in its commitment to surrounding neighborhoods, six of which — Brooklyn, Cherry Hill, Curtis Bay, Lakeland, Mt. Winans and Westport — have formed a coalition that will receive more than $100 million from the development team to fund workforce development, education, affordable housing and other priorities. Already, the neighborhoods have received a collective $19 million in funding, according to the developers.

The state included the 235-acre project in the new federal Opportunity Zone program that offers tax breaks to investors for rolling their money into distressed neighborhoods, a move that some criticized as contradictory of the program’s intent.

Some regard it as overly ambitious given its size and the space that will have to be filled to pay off the financing. The project also could face challenges as the workforce shifts in a post-pandemic landscape, with fewer people projected to work in offices.

Still, those heading the undertaking described themselves as “all in.”

Plank, the self-described “steward” of the project and whose Sagamore Ventures development firm is a lead investor in Port Covington, said the project would “kick start” growth in the South Baltimore region and “redefine what winning looks like.”

The sports apparel brand had planned to relocate its headquarters from Locust Point to Port Covington, where it has offices and a small manufacturing facility, but those plans are on hold as it struggles to regain its footing and restructure.

“We have to ensure that Port Covington benefits as many people, and as many parts of this city, as possible,” Plank said. “All communities have to have some level of access to Port Covington.”

Renderings of the future neighborhood show foot traffic bustling around the parks, shops and eateries. Central to the design is Rye Street Market, a large, mixed-use office building and food hub designed with Baltimore’s rich legacy of open-air markets. Designs also feature breweries, “extended stay” units, wide sidewalks and entertainment venues.

The neighborhood is currently home to Plank’s Sagamore Spirit whiskey distillery and tavern, Nick’s Fish House, City Garage, Impact Village — a complimentary office space for startup businesses — and The Baltimore Sun, which has a long-term lease with the developer for its newsroom, business offices and printing plant.

Whiting-Turning Contracting Co. began construction in late 2019 on the project’s $500 million first phase. The team suspended work on the once-industrial South Baltimore riverfront site in April to protect worker safety during the coronavirus pandemic.

Now, project leaders say parts of the project could be completed and ready for move-in by late 2022.