The headline could have read: "Mayor names first female development chief in Baltimore history."

That would have put a more upbeat spin on the news that Honora M. Freeman, one of Mayor Kurt L. Schmoke's key aides for the past two years, was moving from City Hall to take control of the newly structured City of Baltimore Development Corp.

Instead, Ms. Freeman's appointment was buried beneath accounts of the sudden resignation of her predecessor, David M. Gillece, after an apparent power struggle between Mr. Gillece and mayoral advisers.

But the lack of fanfare, and the buzzing in local development circles about Mr. Gillece's departure, haven't fazed Ms. Freeman, who just completed two weeks in her new, $81,000-a-year job.

"We're going to be working harder than ever," she said. "We have a lot of projects to keep the fire under. But I think we also need to be looking at economic development issues citywide -- neighborhood revitalization and how we can influence some of the initiatives that could produce new technology-based jobs. We have to be more creative in how we go about building an even healthier business community."

Ms. Freeman's rise to the top of the city's development agency is a clear symbol of the mayor's effort to put women and minorities in positions of power. It also marks the latest chapter of the success story of a Philadelphia native who grew up in an Irish Catholic family with 13 brothers and sisters and had to put herself through college and law school.

The agency Ms. Freeman heads was created earlier this month by merging Baltimore Economic Development Corp., which has promoted economic development citywide, and Center City-Inner Harbor Development Inc., which has guided downtown development. The streamlined agency has a staff of 42 and an annual budget of $1.9 million. And it makes Ms. Freeman the mayor's eyes and ears on economic development.

Still, Ms. Freeman, 51, takes office during a miserable time for promoting business and redevelopment in Baltimore.

Recession-related layoffs and restructurings have taken a toll on many city businesses, including the financial, insurance and law firms that populate the downtown's core. Office vacancy rates are the highest in decades, as businesses shrink or leave in search of greener, suburban pastures.

Fortune magazine just lowered Baltimore's ranking in its annual list of "best cities for doing business," placing it 36th out of 50 in "pro-business attitude." And government cutbacks are only beginning to be felt: Ms. Freeman spent much of her first week in office figuring out how to trim her agency's budget for the rest of fiscal 1992 by 5.5 percent.

"It's a time of great challenge, of great challenge," she said during an interview in her office on a recent Saturday. (She can usually be found at work on Saturdays.) Her 16th-floor corner office in Charles Center has a unobstructed view of the new Camden Yards stadium.

"But I'm really enthusiastic about that challenge," she said. "If I could have designed a job that I would want, this is what I would have designed."

Ms. Freeman had just returned to Baltimore from Washington, where she joined Mayor Schmoke and several thousand other Baltimoreans to take part in the "Save Our Cities" march, and the event was still on her mind.

"We really want the business community to be in the forefront, working hand in hand with the mayor, ensuring that the General Assembly is aware of what's happening to cities . . ." she said. "It's in the business community's self-interest to be standing side by side with him and very clearly articulating the impact" of "draconian budget cuts."

"If the city has to make a choice between education and police protection, that affects every employer, every business man and woman in the city, every employee working in the city. And if the mayor has to make a choice between vaccinations for children and sanitation and trash pickup, that effects every employer and every business person in this city."

An engaging, self-confident woman who speaks rapidly and wears her hair in a distinctive, one-way sweep, Ms. Freeman is an attorney and public administrator by training and has nearly 15 years of experience in government, mostly in Baltimore County.

But she is relatively unknown to the Baltimore business community, primarily because she has been a behind-the-scenes player in the Schmoke administration. In her previous job as special assistant to the mayor, she was a liaison between the mayor's office and city development agencies, quietly assessing what was happening at the planning commission, housing department and other offices. Those who know her say she is friendly and accessible and has a sharp mind and a lively, if somewhat dry, sense of humor.

"She is a no-nonsense, bright, articulate woman, and I think her approach will be very much pragmatic," said Florence Beck Kurdle, a vice president of the Constellation Real Estate Group and former Anne Arundel County planning director. She first met Ms. Freeman when both were members of the Regional Planning Council.

Ms. Kurdle acknowledged that some people are uneasy about the transition. "I think there's caution. There was a lot of support for David [Gillece]. She's not a planner and she's not a developer. She's going to have to hire that expertise. But her long experience in land planning will give her a good perspective."

"I can't think of anyone who would be better than her for the job," said Elinor Bacon, head of a local development company. "She's very much a listener, and she has a wonderful ability to cut through to the essence of an issue. . . . She strikes me as a person who is very much a doer, yet she also sees the big picture."

"I'm much more comfortable than if they had picked someone from outside" the government, said John Paterakis, a partner with Gilbane Properties in the $350 million Inner Harbor East community planned for a 20-acre parcel between the Inner Harbor and Fells Point.

"Honora knows the inner circles of the administration, and she's a good administrator herself . . ." he said. "I am very impressed by the way she thinks and the way she reacts to problems. In any working relationship I've had with her, when things had to be done on deadline, she was 100 percent there."

A need for stability

Besides confronting the city's economic woes, Ms. Freeman must bring stability to an area that has seen many leadership changes during Mr. Schmoke's first term.

The roster of former development czars and czarinas includes CC-IH chiefs Walter Sondheim, Al Copp and Mr. Gillece; Market Center Development Corp. heads Richard Stein and Robert Tennenbaum; BEDCO presidents Bernard Berkowitz and Mr. Gillece; and Marsha Schachtel, the mayor's one-time executive assistant for economic development.

Ms. Freeman also faces the unenviable task of replacing one of the city's best-liked and most respected administrators, Mr. Gillece. For many in the business community, he was a reassuring presence, an administrator who understood how government works and who had the ability to move in a number of different circles. His sudden departure left many shocked and chagrined, and Ms. Freeman's appointment was not particularly reassuring to those who did not know her.

Adding to the controversy was the fact that, before she joined the mayor's office, Ms. Freeman worked for two years as a lawyer with Shapiro and Olander. Two lawyers with that firm -- Ronald M. Shapiro and Larry S. Gibson -- have been the principal architects of the mayor's political career, serving as co-chairmen of his past two mayoral campaigns.

That connection, more than anything else, set the business community abuzz about the mayor's new appointee: What is her background? Was anyone else even considered for the job? And perhaps the most important question for Baltimore, where development agencies have been carefully structured to stay at arm's length from politics: Will she, as a City Hall insider, be beholden to the mayor and his advisers?

Ms. Freeman is not fazed by the talk. "I think agency heads should be the mayor's ally, or they shouldn't be in there," she said. "If there are major disagreements with his agenda, I would think that would be a fractured relationship."

She adds that, as a mayoral aide, she became intimately acquainted with Baltimore's wide range of development projects and can "hit the ground running" -- far better, she says, than someone recruited from another city.

That base of knowledge is one of the main reasons the mayor asked Ms. Freeman to head the agency, said the mayor's spokesman, Clinton R. Coleman. The city conducted a nationwide search just last year to find a replacement for Mr. Gillece's predecessor, Al Copp. So the mayor "knew who was out there, and he knew he had a good person right here who was already familiar with development issues in the city," Mr. Coleman said.

To those who would paint her as a fox in the henhouse, a yes-woman who can't say no to the mayor, she has just one response: "Judge me on what I'm doing and how I do my job."

Future tasks

Although she is charged with doing what several people used to do, Mr. Freeman says it may not be so difficult.

Charles Center and the Inner Harbor, she said, have matured considerably. The stadium is practically in place. Planning and fund-raising for the Christopher Columbus Center for Marine Research and Exploration are well under way. The light rail line will open soon. The quasi-public Downtown Partnership is handling many maintenance and public safety matters in renewal areas.

And what she may lack in expertise, Ms. Freeman said, she will make up in effort. She routinely works 12 hours a day. "Nobody will beat me on energy. Nobody will beat me on commitment."

Looking ahead, she wants to make sure current projects, such as the Port Covington business park and Inner Harbor East, stay on track. The mayor also wants the agency to do more to include minorities, women and small businesses in major economic development projects. Ms. Freeman wants to move ahead with crime prevention and job retention, to make sure the stadium opens successfully, and to implement the city's long-range development strategy. And she wants to work for more regional cooperation.

Ms. Freeman also is aware that the mayor has been criticized for being isolated from the business community. Part of her goal, she said, is to "ensure that he's out there a lot more, hearing from the business community."

She added, "In this sort of season of renewal that we're into, I'll be working harder to make sure that economic development is very aggressively handled. I think it's a time when we really have to work more creatively and more in a partnering way with the business community."

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