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URBAN SAVIOR LOOKS HOMEWARD Cordish plans bid for Power Plant

THE BALTIMORE SUN

The summer of 1983 was a desperate one for Charleston, S.C., Mayor Joseph P. Riley Jr.

His revitalization plan for Charleston's genteel but run-down shopping district had stalled after a local real estate developer was unable to secure financing for a linchpin project on a four-acre lot beset by strip joints and boarded-up retail stores.

The crisis endangered not only a proposed eight-story hotel and retail hub but also the entire renaissance of the historic Southern city.

Desperate, Mr. Riley turned to one of the few people who he knew could complete the key piece in his strategy, David S. Cordish, the 55-year-old chairman of Baltimore-based Cordish Co., a development business specializing in urban redevelopment projects.

"David's a problem-solver, an innovator," Mr. Riley said, explaining why he called Mr. Cordish. "Understand, we critically needed a quality development to occur at that location. And what we wanted was a project that was not only visionary but could turn a profit."

Today, that once-dilapidated property contains a $70 million, award-winning shopping mall that includes Polo/Ralph Lauren, Gucci and Godiva; a 500-room, four-star Omni hotel that is averaging an 85 percent occupancy rate; and the largest conference facilities in the Carolinas.

In addition, Mr. Cordish's 495,000-square-foot Charleston Place created 800 jobs.

"We've got one of the greatest success stories in urban America," the mayor said. "It's achieved everything we had hoped for, and it wouldn't have happened without the involvement of David Cordish."

Charleston Place, a joint venture between Cordish and the Taubman Co. Inc., a Michigan-based mall developer, also has been partially responsible for spurring $500 million worth of new investment downtown, including a new Saks Fifth Avenue department store and a Class A office building under construction across the street.

"Saks would not be coming here were it not for those stores," said Frank W. Norvell, a brokerage and development manager for the Beach Cos. of Charleston, which is developing the $25 million Saks project. "The city's financial center wouldn't be where it is today without Charleston Place."

Mr. Cordish's experience in Charleston isn't unique, nor is he a stranger to urban redevelopment. Since its founding in 1968, the Cordish Co. has undertaken similar rescues of nearly defeated city projects in Houston, Detroit, Salt Lake City, New Haven, Conn., and Niagara Falls, N.Y.

But not in Baltimore.

That could change, however. Next month, Mr. Cordish intends to submit to the city a plan to redevelop the derelict Power Plant at Pier 4 in the Inner Harbor. The $45 million Six Flags Corp. indoor amusement park once housed there closed in 1990.

The city recently reopened bidding for the 106,200-square-foot Power Plant because a group known as Sports Center USA Inc., which had planned a $32 million sports-oriented theme park along Pier 4, was unable to obtain financing for the venture.

Under Mr. Cordish's plan, the 94-year-old Power Plant would be transformed into an entertainment complex with restaurants, nightclubs and other activities, similar to his $30 million Bayou Place project in Houston.

There, Mr. Cordish's company is transforming a vacant convention center in the heart of the city's cultural district into a 150,000-square-foot entertainment destination, Texas' largest.

The 13-club project is set to open next August.

"Downtown Baltimore needs an adult night life and more family entertainment during the day," Mr. Cordish said. "And a Bayou Place-type of project would absolutely be the best complement to the Inner Harbor. We have the contacts. I just can't see us failing. The harbor is a tremendous success, and we'd just be capitalizing on it. We've done tougher."

By tougher, Mr. Cordish may be referring to his work in New Haven, Conn., where his company purchased the grand but bankrupt Park Plaza Hotel in July 1994.

After nine months of intense haggling with city and state officials over back taxes and financial assistance, the Cordish Co. is in the design stage of a $20 million renovation scheduled to open in late summer of 1996.

What made the negotiations so contentious has become a Cordish hallmark for the company's urban endeavors: financial assistance.

Government funding

As part of the deal, Mr. Cordish requested a $10 million grant toward the renovation, a 50 percent break on $1.6 million in taxes accrued before his involvement and a small tax cut through 2001.

In March, Mr. Cordish got what he asked for.

In return, Park Plaza will create 250 jobs and generate $270,000 annually in taxes.

"He's definitely tough, he knows what he's doing, and he's very thorough in his negotiations," said G. J. Tollett, director of Houston's convention and entertainment department. "But he's also been very honest and fair. I've been dealing with him for four years, and he's a man of his word."

In Houston, Mr. Cordish's deal includes paying the city $3 million in rent through 2056 and providing it with 25 percent of Bayou Place's profits in exchange for the rights to the convention center. It is projected that Bayou Place will create 300 jobs initially.

"He's a tough-minded, no-nonsense businessman," said Charleston's Mayor Riley. "David Cordish is not going to make a bad deal."

As in Houston, New Haven and other cities, Mr. Cordish was able to use the need of the local government as leverage to help create the project.

In Charleston, he agreed to develop the mall and hotel only after receiving $60 million in federal loans and grants.

The city also pledged to construct a $12 million parking garage adjacent to the project.

"I was asked to change the whole atmosphere there," Mr. Cordish said in defense of the government assistance. "That's a risky proposition, so 10 or 15 percent participation makes a big difference. In New Haven, for instance, the room rates can change, the occupancy that can be achieved may go down, but the project still costs $20 million."

His Niagara Falls project had similar backing, thanks to $9 million in federal and local financing.

"He's the smartest and most energetic person I know," said John A. Luetkemeyer Jr., president of Continental Realty Corp., a Towson-based real estate development company, and a former Equitable Bank N.A. executive who financed many of Mr. Cordish's early deals. "And he's always been able to put together layers of debt and equity."

Surprisingly, Mr. Cordish doesn't plan to take a tough negotiating stance with Mayor Kurt L. Schmoke if presented with the Power Plant.

"I don't expect I'd want any money from them," Mr. Cordish said. "For a deal like this, I think what's fair is that if we get the building, they deserve to get a piece of the profits. It's analogous to Harborplace. And I'd do it because I'd love to help Baltimore."

Thwarted Baltimore efforts

Not that he hasn't tried in the past.

In the mid-1980s, Mr. Cordish proposed developing a combination hotel and Bloomingdale's department store on a key piece of city property across from Harborplace, but he lost to the Rouse Co., which developed the Gallery at Harborplace and 28-story Legg Mason Tower on the site.

Mr. Cordish's Baltimore ambitions also were thwarted early last year when he teamed up with former Fishmarket owner Frank H. McCourt Jr. to redevelop the shuttered entertainment complex.

But Mr. McCourt lost control of the $25 million project for failing to make good on more than $1 million in back taxes. The city ultimately bought the 89-year-old Fishmarket, which it plans to convert to a children's museum by 1997.

Beyond financial assistance, there are other, striking links between Mr. Cordish's past efforts and the possibility of undertaking the Power Plant.

In every case, Mr. Cordish's company has become involved at the behest of government officials, and only after seemingly qualified teams bowed out or were forced out.

Bayou Place became a Cordish project after Skywalker Development Co., a company headed by "Star Wars" creator George Lucas, balked. Charleston Place happened because Mayor Riley picked up the phone. Rainbow Centre in Niagara Falls and Trapper's Alley in Detroit followed similar paths, and Sports Center USA had its shot at the Power Plant.

"It's not our style to seek out projects like that," Mr. Cordish said. "We don't have to. We have them coming to us, and we have to turn down four out of five. But I do them because it's an intellectual challenge."

Mr. Cordish's love of cities was cemented in the late 1970s when he ran the U.S. Department of Housing and Urban Development's Urban Development Action Grant (UDAG) program.

The program, which provided loans and grants to cities to finance new development, was killed when President Jimmy Carter left office in 1981.

Urban contacts from HUD

It was at HUD where Mr. Cordish developed many of his urban contacts, from Mr. Riley in Charleston to officials in upstate New York.

Mr. Cordish was tapped to direct the UDAG program by Robert C. Embry, a former Baltimore housing commissioner and a boyhood friend of the developer, who was in charge of HUD at the time.

"We were looking for someone with experience as a developer who would know what was reasonable, and at the same time for someone with a public service bent," Mr. Embry said. "It was impossible to find. So I mentioned it to him over dinner one night, and he said he'd be interested."

The duo worked so well together that Mr. Embry joined the Cordish organization after his stint in Washington.

In 1987, he left to become president of the Baltimore-based Abell Foundation, which is devoted to improving the city.

Although most of his acclaim has come from urban projects -- he is the only Baltimore developer to win three prestigious Urban Land Institute awards -- Mr. Cordish hasn't spent all of his time resurrecting failed urban projects.

In fact, most of his 30-project portfolio, which contains roughly 6 million square feet of space and has an estimated value of more than $400 million, is in the suburbs.

Other Maryland projects

Most recently, Mr. Cordish entered into a joint venture to invest $23 million to redevelop the Tollgate Mall in Bel Air into a "power" center with discount-oriented tenants. The 440,000-square-foot center now includes Best Products, Staples and T. J. Maxx.

A new $10 million factory outlet mall in Ocean City will also open around the Labor Day holiday weekend.

Mr. Cordish expects the 165,000-square-foot retail center to thrive because of the more than 8 million annual visitors to the Eastern Shore resort town.

Cordish Co. also owns shopping centers in Joppatowne, Kent Island and Rehoboth, Del.

David Cordish's love of cities may have been fashioned at HUD, but his competitive spirit was sparked on the lacrosse field when he played at the Johns Hopkins University.

To this day, despite all the successful projects, graduating from law school and other professional accomplishments, the sport is the thing he is most proud of.

Competitive spirit

To successfully redevelop the imposing Power Plant, Mr. Cordish will need all the competitive spirit he can muster.

"David is the ideal developer for the Power Plant," said Abraham Rosenthal, chief executive of Baltimore-based outlet mall developer Prime Retail Inc. and a former Cordish Co. executive. "He's been involved in projects of similar scope and complexity, and he's got the temperament to stick with it. If anyone in this city has the expertise needed for it, it'd be David."

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