Real Estate

After spectacular fall, Struever reappears on the radar

Two years after C. William Struever's real estate empire collapsed and the once-ubiquitous developer dropped off Baltimore's radar, the urban visionary has reappeared as a managing director of a new company, working on the same kinds of projects that helped make his name.

Struever is one of the founders of Cross Street Partners, a real estate venture made up of 28 employees who all once worked for Struever Bros., Eccles & Rouse, the company that changed Baltimore's landscape and that of other East Coast cities before coming apart in the throes of the recession, leaving a trail of lawsuits and unfinished developments.

Struever's re-emergence on the Baltimore development scene is being hailed by civic leaders who hope to see revitalization in Baltimore pick up as the economy improves — and to see Struever play a role.

"He's certainly one of the great citizens of Baltimore and one of the people most dedicated to making the city a better place, and one of the most imaginative," said Robert C. Embry Jr., president of the nonprofit Abell Foundation. "The fact that he is at work and involved with the city is a great plus for Baltimore."

But Struever's resurgence was not welcomed by everyone, as the collapse of Struever Bros. left many contractors and subcontractors, not to mention banks and others, unpaid.

This month, a judge in Providence, R.I., appointed a special master to sell Paragon Mills, a Struever Bros. project left unfinished. Joseph J. Reale Jr., a Providence attorney who represents some of the contractors who filed mechanics liens against Struever for unpaid work, estimated that subcontractors are owed more than $1 million for labor and materials.

Reale said nonpayment by Struever has been "a significant hardship." Told that Struever was part of a new business, Reale said it "didn't seem fair" that projects are moving ahead with Struever's involvement when many contractors and subcontractors are still awaiting payment.

For many years, Struever was a fixture on the local development scene, advocating innovative ways to take advantage of Baltimore's waterfront, investing in the Urbanite magazine and offering ideas in public forums. It was Struever who pushed for the creation of the Downtown Partnership and the Waterfront Partnership. It was Struever and designer Alex Castro who put a winking Mr. Boh sign atop the former National Bohemian brewery. And it is Struever who has tried to save Fort Carroll, the Civil War fortress in the Patapsco River.

During the depths of the recession, in late 2008 and 2009, Struever dropped out of public view. He said at the time that he was keeping a low profile because he was concentrating on paying off debts and not launching any new developments.

But in recent months, Struever has become visible again, participating in such events as a waterfront planning conference in November, where he took part in a session on completing Baltimore's shoreline promenade. And in December, he met with Urban Land Institute experts seeking ways to revitalize downtown's west side.

"We're still throwing out a million ideas, just in a different way," Struever said during a recent interview at the new company's offices, housed in a renovated 1929 industrial structure at Tide Point called the Trestle Building.

He declined to answer questions about the status of Struever Bros. or respond to his critics, preferring instead to discuss Cross Street. The new venture is "all about being of service to others," Struever said.

"I want to be useful in any way I can," he said. "That's my goal in life: to be useful."

Familiar portfolio

Launched quietly last May and just beginning to draw attention, Cross Street is working locally in many of the same areas — and on many of the same projects — where Struever Bros. made its mark, including Canton, Locust Point and Harbor East.

The scope of Cross Street's activities is in many ways similar to that of Struever Bros. — from project planning and general contracting to marketing, property management and tax credit consulting. Cross Street now manages some of the projects Struever originally developed or renovated, including Belvedere Square in North Baltimore, the Can Company in Canton and Tide Point in South Baltimore.

But Cross Street is by no means a clone of Struever's earlier venture. While Struever Bros. owned many of the projects it built, Cross Street Partners does not intend to own real estate, at least initially. Instead, it is using a fee-for-service model, working to manage, develop or reposition properties owned by others.

Cross Street's partners say that instead of creating a portfolio of successful buildings, the company's goal is to create a portfolio of successful clients.

The new arrangement allows Cross Street to stay lean and nimble, assembling teams of experts to work on specific projects. Before the recession hit, Struever Bros., Eccles & Rouse employed as many as 367 people.

The new company already has assembled a range of clients around the country. Projects include a life science and technology park next to the University of Miami Hospital in Florida, the renovation of two large retail properties in St. Louis and construction management for an arts center and a residential community in Harrisburg, Pa.

Locally, Cross Street has worked for Under Armour to convert space at Tide Point to offices. It also is helping the University of Maryland, Baltimore improve the streetscape of its west-side biopark and with Coppin State University to explore possible uses for the former Hebrew Orphan Asylum.

Struever, 58, is the partnership's managing director for "master planning and real estate development." He says the Cross Street venture allows him and his partners to pursue creative, complex projects — urban revitalization efforts, "green" buildings that help preserve energy and natural resources, mixed-use developments that bring together creative people — without the risk or strain of carrying debt.

David Gillece, president of the Cassidy Turley real estate firm, is enthusiastic about the new venture, saying Struever and his team have "probably done more to change the physical landscape of Baltimore City than any other developer, perhaps in its history."

Struever and the partnership's other two managing directors — J. Martin Lastner and Michael Posko — say they have assembled a "dream team" of development experts and can pull in other specialists as needed.

"That's what we want to do, team up with the best and the brightest," said Posko.

Much of the work involves "taking urban settings and making them better places to live and work," Lastner said. "We like bringing people back into the city."

Financial, legal problems

Cross Street Partners was formed more than a year after the recession caused conventional financing to dry up, making it difficult if not impossible for developers around the nation to fund new projects or finish ventures already under way.

Struever Bros. was left with projects that couldn't be completed as originally planned. In some cases, such as the 27-acre Brewers Hill development, Struever Bros.' interest in a project was taken over by other partners. In other cases, the property went to foreclosure or Struever Bros. ended up selling.

One large project that never materialized is the Olmsted, an $83 million, 12-story housing and retail development planned for Charles Village. After the real estate market sagged, the project was shelved and Johns Hopkins University bought the land for $12.5 million.

Struever Bros. also withdrew as lead developer of the $1.5 billion State Center project in midtown Baltimore and was replaced by a company headed by former Struever Bros. executive Caroline Moore.

Unable to complete construction or refinance many properties, Struever Bros. defaulted on loans in Maryland and elsewhere. Because the company was active in many areas of the city, its failure to complete projects was particularly conspicuous, though it was far from the only developer in financial straits.

Dozens of lawsuits were filed against Struever Bros. over loan defaults and other disputes, together seeking millions of dollars in repayment. In many of the cases, the courts have ordered monetary judgments.

Struever Bros. — which never filed for bankruptcy court protection — has settled some of the cases and made at least partial payments to some contractors, but it's unclear how much debt remains.

George P. Mahoney, owner and CEO of Monumental Paving & Excavating in Baltimore, received a judgment of more than $22,000 in February 2010 for work his company did on Struever's Clipper Mill project in Woodberry. But Mahoney said he has not seen any money.

He said his company had worked on Struever projects for years and always had a good experience — until the recession struck.

"We all have problems in life, but at least you pick up the phone and say ... 'I'm not going to pay you, but when I do have the money I will,'" Mahoney said. "There was no communication from Bill Struever to me. I would do work for him if he came to me and said, 'I know I owe you money, and will do my best to pay you back.'"

Other contractors also expressed a willingness to work with Struever again. Even though Environmental Materials LLC, an Orwigsburg, Pa.-based company that installed stone for Struever Bros. projects, won a judgment in March 2010 for more than $30,000 for work at Clipper Mill, it still has an "ongoing working relationship" with Struever, said Thomas Downey, a senior vice president at the firm.

Downey would not say how much the company was paid, but he said any problems with Struever were "water under the bridge." He said: "We worked it out with them."

Downey added that Struever Bros. was by no means the only company that didn't pay its bills in a timely fashion. Many of the hundreds of builders his company works with "negotiated their way out of full payments," he said. "In 2008 and 2009, there were a heck of a lot more negotiations than I would like to talk about. The economy crucified a lot of people."

In the beginning …

Founded in 1974 as a home improvement business, Struever Bros., Eccles and Rouse grew to become the lead developer or contractor in dozens of high-profile local projects. Struever was joined by his brother, Fred; his college roommate, Cobber Eccles; and Ted Rouse, a son of the legendary developer James Rouse. (Fred Struever, Eccles and Rouse are not employees of Cross Street Partners.)

After more than 35 years of development work, the value of its completed projects is nearly $2 billion, according to company records. For its first 26 years, the firm concentrated on Baltimore. Then it began expanding along the East Coast from Massachusetts and Rhode Island, where Struever went to Brown University, south to North Carolina and as far west as Nashville, Tenn.

In Baltimore, Struever Bros. completed some of the most creative and distinctive developments: Brown's Arcade, the old Louie's Bookstore & Cafe and the Park Plaza on North Charles Street; Mill Centre and the Stieff Silver building near Hampden; Tindeco Wharf, Canton Cove and the Can Co. in Canton; and Tide Point in Locust Point.

Many of these were pioneering projects that transformed industrial "brownfields" and sparked additional development. Some triggered revivals of entire neighborhoods. Struever Bros. also was a leader in using tax credits for historic preservation and affordable housing, and finding other creative ways to cobble together money for projects.

When talking about Cross Street Partners, Struever and his associates are not reluctant to discuss overlaps between Struever Bros. and the new company.

Even the name of the new firm, the partners say, is a reference to the roots of Struever Bros., which was founded shortly after Struever left college and began remodeling rowhouses near Cross Street Market in South Baltimore. The name "pays homage" to him, Posko said.

Today, Cross Street Partners is carrying on much of the work Struever started, while also forming new alliances. Its first project was converting 30,000 square feet of space in Tide Point's Cascade Building to a work setting for 150 Under Armour employees.

Scott Plank, executive vice president of Under Armour, said Struever Bros. helped the sportswear firm move to Tide Point in 2002, when it had only 15 employees. It now has about 1,000 in Baltimore.

"Bill's been a huge partner to us," Plank said. "He's been one of the key partners in helping us grow and stay in the city."

Cross Street also is working with Humanim, a nonprofit based in the former American Brewery building, which Struever converted into Humanim's headquarters. Struever and his partners are now focusing on the next phases of development around the brewery, including finding new uses for the former bottle building.

"It's good to see him resurface," said Al Barry, a Baltimore development consultant. "Baltimore needs him."