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Residents of Perkins Homes hold a press conference demanding repairs in their housing development. (Lloyd Fox, Baltimore Sun video)

A deal to redevelop the 74-year-old Perkins Homes public housing complex near Fells Point has fallen apart, leaving the fate of 17 acres of prime real estate in limbo.

Housing Authority of Baltimore City officials say they are in discussions with another developer to take over plans to turn the site into as many as 1,100 low- and moderate-income and market-rate homes over the next decade.

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Some community members worry that the decision by Virginia-based CRC Partners to withdraw after many months of planning signals trouble for the project's future. About 1,400 people live in the declining complex's 629 heavily subsidized apartments.

State Sen. Bill Ferguson, a Baltimore Democrat, said city officials need to improve their strategy to entice a new developer and should add adjoining properties to the deal to make more room for affordable and market-rate units. He said there is underused city school land adjacent to Perkins that officials should consider making part of the redevelopment.

"The breakdown of this deal is proof that development is not inevitable, and it takes all parties being thoughtful and engaged in how to create a thriving community," Ferguson said. "The risks involved in all of these deals are high. As we think about development in the city of Baltimore, this should be a case study in where we failed and how we need to have a different approach."

Housing spokeswoman Tania Baker said efforts to salvage the roughly $200 million plan are continuing. The authority could seek approval from its Board of Commissioners as early as August to enter negotiations with another firm. She said CRC Partners did not accept the authority's terms and the two "parted ways amicably."

"We are exploring options," Baker said.

Neither the Housing Authority nor the developer would say why the deal collapsed.

Many see the Perkins property as a critical link between the planned transformation of the long-distressed Old Town Mall in East Baltimore, the $1 billion waterfront Harbor Point development and the revitalization effort surrounding Johns Hopkins Hospital.

Meanwhile, housing advocates, such as John Comer of Maryland Communities United, say they are watching to make sure that the low-income families who live in Perkins Homes are not squeezed out.

"We agree the housing project should be demolished," Comer said. "What matters most to us is fair, affordable housing. It's a process of guarding against the displacement of the residents in Perkins Homes."

Maria Brown, a six-year resident of Perkins, said she is not disappointed that the developer backed out. But she is concerned that the Housing Authority will decide to do business with a company more interested in making a profit than providing quality housing to low-income residents.

"There is probably another developer waiting in line," said Brown, 57.

Ferguson said providing housing for families at various income levels is critical.

"Concentrating families with the highest need is not only bad for those families, it's bad for the city as a whole," he said. "We cannot settle for the haphazard neighborhood development we've had over the years. We need economic diversity that creates neighborhoods where all families can thrive."

A disinvestment by the federal government in maintenance of public housing has local authorities, including Baltimore's, turning to private developers to rehabilitate the complexes, often into mixed-income developments.

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Under federal guidelines, public housing authorities are required to replace each heavily subsidized unit as part of any redevelopment.

Baltimore Housing Commissioner Paul T. Graziano recently described the deal with CRC Partners as a public-private partnership. The company was the lead on a team selected in February 2015 that included Washington-based Northern Real Estate Urban Ventures and the Baltimore architectural firm Hord Coplan Macht.

"We are just in the very preliminary discussion stages," Graziano said last month.

Joy Lutes, a CRC spokeswoman, said the company was invested in the project but could not agree on a deal with the city.

"We shared the goal of transforming Perkins into a model, innovative mixed-income community that could improve the residential quality of life and enhance neighborhood vitality," Lutes said. "While we were unable to reach mutually agreeable business terms for the development efforts, we wish only the best for the future of this project, and the residents who live there."

The authority won approval in June of a zoning change that allows taller buildings than the current two- and three-story structures at Perkins Homes. The change was seen as a key to the city's plan with CRC.

The developer wanted the area rezoned before it would agree to commit about $3 million to refine the master plan.

Housing officials have said they are looking for nearby parcels to make part of the project.

City schools officials have been in talks with housing officials about the now-closed Baltimore Freedom Academy next to City Springs Elementary/Middle School and want to help find a solution, according to Alison Perkins-Cohen, chief of staff for Sonja B. Santelises, the chief executive for Baltimore public schools.

The school system faces its own challenges, and they must be considered, Perkins-Cohen said. It does not have money to renovate the old school but faces overcrowding in Southeast Baltimore and is reluctant to give up the building.

Upper Fells Point resident Jeff May said the more land that becomes part of the deal, the more attractive the project could become to a developer. The Perkins tract limits how many market-rate units could be built while also finding space to construct the low- and moderate-income homes.

"A lot is at stake," May said. "If it's done right, it would really be great. If it's not done right, does it become a derelict site that doesn't bring in the residents at the other price points?"

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