The city's spending board approved a deal Wednesday to sell the former site of the Chesapeake Restaurant and an adjacent lot in Station North to a team of developers, clearing the way for two large developments in the arts district.
The restaurant site, which has been vacant for two decades, and a small lot on Lanvale Street just east of Charles Street were sold to developers Michael Schecter and Ernst Valery for $2.5 million, under the deal approved by the Board of Estimates.
M.J. "Jay" Brodie, president of the Baltimore Development Corp., the city's quasi-public economic development arm, which negotiated the deal, praised the plans as a sign of "lively activity" in the neighborhood.
"For many people, this is the gateway to [Station] North," said Brodie. "The renaissance of the Chesapeake Restaurant is a signal that better days are ahead for the area."
The developers, acting as the Station North Development Partners, pledged a $1 million renovation of the restaurant, including building a modern facade and constructing artist studios and offices above it.
Restaurateur Qayum Karzai, who owns the Helmand, B, and Tapas Teatro, which sits next to the Chesapeake, will run the new location, Valery said. Plans for the Chesapeake site have not been finalized, but will include either an expansion of the tapas restaurant or a European market-style eatery, he said.
The developers plan to build an apartment building with 6,000 square feet of retail area on the Lanvale property and a couple of adjacent plots owned by the Schecter family, Valery said.
They are considering constructing either a four- or 10-story apartment building geared to college students, commuters who wish to live near Pennsylvania Station and "people who want to live in a vibrant artists' community," he said.
The building will likely have the word "Chesapeake" in its name, a nod to the restaurant that anchored the block for much of the past century, Valery said.
"People have so many memories of going out to eat there, of going there as children with their parents," said Valery, who oversaw the redevelopment of Mount Vernon's old Professional Arts Building into upscale apartments.
Schecter, who owns many recently renovated properties in the Station North area, could not be reached for comment Wednesday.
The neighborhood, enlivened by by students and alumni from the nearby Maryland Institute College of Art, has slowly been transformed in the past decade as bars and restaurants have opened in once-blighted properties.
The restaurant and lot were valued at $1.5 million in a 2007 appraisal. A new appraisal was not requested because the land is not believed to have supassed the $2.5 million selling price, according to documents provided by the Baltimore Development Corporation.
Under the deal approved by the spending board, the development team will pay the city $500,000 up front and submit 5 percent of gross receipts to the city until an additional $1 million has been paid. The developers will then pay 2.5 percent of gross receipts to the city until the full $2.5 million has been paid.
Valery said he expects work to begin on the Chesapeake within the next month and the restaurant to open in the next two years.