Responding to changing market conditions, developers of the planned $350 million Inner Harbor East community now say their first major real estate venture there is likely to be residential rather than offices or a hotel.
Michael Culbert, a vice president of Gilbane Properties, said the development team plans to begin construction next spring on a 110-unit, five-story apartment complex overlooking the waterfront between the Inner Harbor and Fells Point.
He said the building would represent an investment of more than $8 million by a joint venture of Gilbane and Baltimore businessman John Paterakis that controls nearly 20 acres south of Little Italy.
As approved by Baltimore officials several years ago, the Inner Harbor East master plan calls for a combination of offices, shops, restaurants, a hotel, marina and up to 800 residences.
Gilbane officials had previously indicated that the first major building would be either an office building or an Embassy Suites
hotel. But the hotel's developer has had difficulty obtaining financing, and the joint venture has been unable to lure government offices or corporate tenants. Prospects have included the Ryland Group, the Baltimore Life Insurance Co. and the State Highway Administration.
Mr. Culbert said his team is ready to move ahead with office construction if a tenant can be found. But given current economic conditions, he said, the team believes the market is strongest now for waterfront residences.
Even during the recession, Baltimore has enjoyed fairly strong occupancy rates for upscale apartments, especially on the waterfront, he said.
"We have been saying all along that the site is demand-driven, and we will build whatever the market wants," he said. "We're the next logical site for residential development in Baltimore. It's close to the Inner Harbor and yet it's removed" from the center of downtown.
Mr. Culbert said the residences would take shape on the south side of a block that faces Lancaster Street. He said plans call for apartments that would be rented at current market rates and could eventually be converted to condominiums.
Preliminary plans have been designed by Ehrenkrantz & Eckstut Architects, a New York-based firm that developed the master plan for the community. The plans show a wood frame structure with masonry fronts and elevators. Mr. Culbert said his group would soon select an architect to create the final design.
The city began work last year on site improvements for the waterfront community, including new roads, sidewalks, bulkheading and a waterfront promenade. Mr. Culbert said the public improvements would be well along by spring and that residents could take occupancy by early 1994 under the current timetable.
He added that his group would like to negotiate an agreement with the city that would allow it to defer paying some property taxes in the early years of the project as part of its financing plan.
The Schmoke administration negotiated a similar arrangement to help get work started at Waterloo Place, a 196-unit apartment complex that opened last year on a formerly vacant parcel in the 600 block of St. Paul St.
Peter Cavaluzzi, an associate of Ehrenkrantz & Eckstut, said his firm envisions the project as having some of the residential character of Fells Point, only "in a more modern way." Most of the units could have waterfront views, he said, and off-street parking would be available nearby.
The apartment complex is not the first building that would be constructed as part of the Inner Harbor East development, however.
Mr. Culbert said work is due to begin in the fall on the Marina House, a 6,800-square-foot building that would serve the users of a 204-slip marina that is being constructed as part of the project.
Curved in shape and marked by a clock tower, the building will contain dressing areas and lockers for boaters, offices for the people who will oversee operations of the marina and a restaurant.