More than six months after the developer shut down construction work on the Port Covington project due to the coronavirus, the expansive South Baltimore development’s timeline continues to be delayed. But two potential tenants of the mixed-use waterfront project said they remain committed to moving there despite the uncertainty.
DataTribe, AllegisCyber and Evergreen Advisors announced plans to relocate there about two years ago, with the intent of laying the groundwork for a cybersecurity hub dubbed “Cyber Town USA.” Both DataTribe and AllegisCyber said the pandemic has added some variability to their plans in terms of timing and space needs, but have not altered the overall intent to relocate.
Weller Development, overseeing the project partly owned by Under Armour founder Kevin Plank and New York investment bank Goldman Sachs, suspended work on the project in April. On Thursday, Marc Weller, the firm’s founding partner, said through spokesman John Maroon that the firm anticipates starting vertical construction in the first quarter of 2021, a year later than initially planned.
Meanwhile, the first round of bonds, approved in December, have yet to be sold to finance the elaborate tax increment financing deal first approved by Baltimore officials in 2016. Some $148 million of the $660 million in bonds meant to build the infrastructure for the project — to be repaid by the developer through future taxes — were scheduled to be sold in February.
Weller said he expects the sale to take place “very soon,” and would be followed by the closing of the deal financing, including the TIF, approximately six weeks later.
“Large-scale developments of this magnitude require significant effort including master planning, development, community engagement, financing, and much more,” Weller said in a statement. “Accomplishing these final steps will allow us to begin constructing 1.1 million square feet of mixed-use waterfront development, and continue bringing investment, jobs, economic impact, and community benefits to Baltimore.”
Representatives from the Maryland Economic Development Corp., which is handling the bond deal, did not respond Thursday to requests for comment.
More clarity on the project may be delayed until financial markets stabilize and the virus abates.
Mike Janke, co-founder of DataTribe, said the public health crisis has forced the venture capital and advisory company to reevaluate how much space it will need as people shift to more remote work indefinitely and await COVID-19 vaccinations. But the “Cyber Town” vision has not changed, he said.
“We’re committed to it, but COVID changes a lot of things,” Janke said. “It’s just how much, how big, when, and what is the construction timeline?”
Janke said the Port Covington development team has not required DataTribe to sign a lease yet, which usually follows a construction timeline being finalized. He said he expects to sign an agreement once construction resumes.
“It’s not an emergency for us,” he said about signing a lease. “It doesn’t have to be done today. A post-COVID world gives you clarity."
Bob Ackerman, founder and managing director of AllegisCyber, another cyber-focused venture capital firm, echoed Janke’s commitment to “Cyber Town.”
“Nothing has changed and we are just waiting to see when COVID ends and what the landscape looks like,” Ackerman said in a statement.
Evergreen Advisors, a Columbia-based middle-market investment bank and advisory firm, did not respond to requests for comment.
Scooter Monroe, vice president and head of office leasing at Weller Development, said interest from prospective tenants in Port Covington remains high.
“Naturally, throughout the industry, companies are continuing to assess their needs post COVID,” he said in a statement. "That said, interest in Port Covington is very strong and, as with all new projects, is expected to increase further once vertical construction begins in January.”
Weller has also entered into an agreement with Alexandria Real Estate, a firm that invests in offices and laboratories leased to tenants in the life science and technology industries, further opening up leasing opportunities in Port Covington, Maroon said.
The first part of the project was scheduled to start opening by the end of 2020. Work had begun late last year on the $500 million first phase of building on the once-industrial East Cromwell Street site along the Patapsco River’s Middle Branch. Plans in the first phase include buildings for offices, apartments and a market, as well as parks, and construction had begun to prepare for the first five buildings.
Plank, who became Under Armour’s executive chairman and brand chief in January after stepping down as CEO, launched the project. Plank’s Sagamore Development company began assembling land at least five years ago for the “mini-city,” to be anchored by a new corporate campus for Under Armour. The sports apparel brand has its headquarters in Locust Point but has offices and a small manufacturing facility in Port Covington.
The neighborhood also is home to Plank’s Sagamore Spirit whiskey distillery and tavern and The Baltimore Sun, which has a long-term lease with the developer for its newsroom, business offices and printing plant.
Plank brought in Weller to oversee Port Covington’s development. Goldman Sachs invested $233 million in 2017, becoming a partner on the project. But plans for Under Armour’s new headquarters have been put on hold as the brand worked through a turnaround plan to boost slumping sales in the United States.
On Wednesday, Plank announced he would be shutting down his horse racing operation at Baltimore County’s historic Sagamore Farm after running one final entrant in the Breeders' Cup on Saturday. The Sagamore Development owner said his decision to shutter the racing operation at Sagamore was not related to the state of Under Armour.
Latest Real Estate
Work on other projects around Baltimore has continued, despite the pandemic, including the demolition of part of Lexington Market and a 32-bed addition to the 17th floor of Mercy Medical Center in downtown Baltimore being done by The Whiting-Turner Contracting Co., Port Covington’s builder.